Between Heber City, Smith’s Grocery and developer Valley Hills, LLC, a final agreement to bring a 115,000-square-foot food and department store has proven elusive. The parties have negotiated details since before last October, when the city council passed a memorandum of understanding that it intended to reach an agreement.
According to City Planning Director Tony Kohler, it would become Wasatch County’s second-largest building, behind the 182,000-square-foot recreation center and ahead of WalMart, which is just shy of 100,000 square feet.
After the city council voted on Tuesday to allow final negotiations to proceed, City Manager Matt Brower said construction could begin as early as September.
The city council voted 3 to 1 to allow city staff to finalize a cost-sharing plan with the other parties. That’s the last step before the building can break ground.
“We will drill down all those numbers and bring back factual numbers to you for approval,” Brower said, adding that it could take about a month to get the final agreement ready.
The sticking points the parties will iron out in the meantime include alterations to existing roadways and water drainage plans. The city expects to cover a little over $2 million toward the roughly $11 million total included in the cost sharing.
Councilmembers Scott Phillips and Mike Johnston said they supported the project, as well as the city contributing to it. They said its economic benefit as a major component of Heber City’s community reinvestment area economic development project was a primary driver for their support. The CRA allocates new property tax revenue to be reinvested in the downtown area.
Councilmember Rachel Kahler voted against moving forward because she said the developer’s requests for city contribution weren’t well enough aligned with a 2015 annexation agreement with Valley Hills.
“If we continue to let a second developer bring costs back to the city, I just am worried that this is setting a bad precedent, especially as we move to the North Village,” she said. “I recognize that Smith’s Marketplace is a huge commercial entity for us, but to me, it still goes back to the annexation agreements.”
The costs she referenced include widening Highway 40 at the intersection with the future road called 900 North. A new traffic light is also planned there.
Kahler was the only council member to vote against continuing negotiations. Although Councilmember Yvonne Barney and Johnston voted yes to negotiating, they said they would wait to see final numbers before deciding to approve the participation agreement.
Brower said some of the costs the city may ultimately agree to cover are “above and beyond” what Valley Hills agreed to back in 2015. He also said Heber City’s support could help complete the road and store sooner, which would kickstart tax-increment benefits of the CRA initiative sooner.
Before the Smith’s can be built, the council has to approve the final terms of the cost-sharing agreement.
As part of the agreement with the city, Smith’s would pledge to finish construction by the end of 2023, according to a city staff report.
The project is planned in the New London Development off U.S. Highway 40 between downtown Heber City and the Utah Valley University Wasatch Campus. Plans there also call for new housing and 50,000 square feet of other commercial space.
