When Hideout surveyed its residents about what kind of development they’d like to see on the Ross Creek land, they overwhelmingly asked for no more residential or hotel development.
Instead, locals requested mixed-use or recreational areas, like a grocery or general store, restaurants, outdoor gathering spaces or trails.
Town leaders said they’re still working on plans for the land while they consider funding mechanisms to make the future development happen.
At the Hideout Town Council meeting Thursday, March 13, councilmembers heard from Kyle Fielding, an attorney who specializes in land use and tax increment funding. Fielding said Hideout could use a community reinvestment agency, or CRA, to finance the Ross Creek development.
That’s the same financing plan Heber City is using for its downtown revitalization project. As Fielding explained, a CRA sets aside certain tax dollars for new development. It does so by determining a tax increment with partnering government entities.
“It has no taxing authority, so the only way it gets funding is by agreement with other taxing entities, including the city, county, school districts, special service districts – anyone that levies a tax on property within a project area,” he said.
Everyone who opts in to the plan would make an agreement for how much tax revenue would be dedicated to the CRA and for how long. Fielding said the timeline is typically around 15 years, although it can vary.
Governments don’t lend the CRA money from their existing tax base – only a share of the tax revenue from new development or higher property values. Fielding said that means the financing plan has “no risk.”
“If there’s no growth, then nothing happens – no one’s paying anything,” he said. “It’s just if there’s growth, and if there’s an increase in tax revenues, then there’s some money available.”
Hideout Mayor Phil Rubin asked why entities would agree to forgo some of their tax revenue for a CRA.
“What's the value for them?” he asked. “We know what the value is for the community, but I don't know what the value is, necessarily, for those that are passing up their tax increment for some period of time.”
Fielding said CRAs typically argue that without incentivizing development, those same taxing entities might not see increased tax revenue so quickly or at all.
He said it’s most important to get local school districts’ buy-in, since their share of property taxes is highest. But it can be a tough sell if a CRA’s goal is residential development, since the district would delay seeing higher tax revenue but also take on the higher cost of more students.
The Wasatch County School District declined to participate in Heber’s CRA.
The Hideout Town Council didn’t make any decisions Thursday about whether to form a CRA. First, councilmembers said they’re trying to cement plans for the Ross Creek land and find a development partner.
