A unique community is coming to Utah. A 57-acre site in the historic tradition of downtown Holladay. Cottonwood’s tree-lined neighborhoods feature condominiums, town homes, cottages and single-family homes. From boutiques to department store, offices to cinema, this will be a place to call home.

Click here for more information on the Cottonwood community.

The Cottonwood Project – What You Need to Know

The Cottonwood project is the redevelopment of the 57.37 acre Cottonwood Mall site, located at Highland Drive and Murray-Holladay Road in Holladay, Utah, as a mixed-use (retail, office and residential) project. The currently proposed Cottonwood redevelopment project consists of a total estimated cost of over $550 million by the developer, with construction occurring over an estimated four year period. The first phase of the project is anticipated to be completed by Fall 2010. Of the 57.37 acres of property, the completed project will include 24 acres of commercial and residential structures, 20 acres of parking and streets and 13 acres of plazas, parks and public green space. A range of 454 to 614 residential housing units (inclusive of townhomes, single family lots, cottages, condominiums and apartments) and approximately 579,000 to 772,000 square feet of commercial retail and office will be constructed on the site.

Why the Cottonwood Project is Using Tax Increment Financing

Tax Increment Financing or (TIF) is the most popular form of public finance for economic redevelopment projects on State and local levels that governments have established in order to create dynamic economic changes in communities that have lost their economic competitive edge. Each new development eventually generates an increase in sales and property tax revenues. Those new revenues thus increase the amount of income that goes into the taxing entities such as city, county and school districts. A portion of incremental increase that is created by the development of the project is then used for a period of time to subsidize infrastructure costs (such as roads, utilities, etc.). The estimated $550 Million Investment by General Growth Properties for the Cottonwood Project, is expected to generate over $4 million dollars per year in new taxes which will be shared by the city, county, school district, and development for the next 20 years.

Who gets to Vote on the Cottonwood Redevelopment Project?

Granite School District, along with the City of Holladay, Salt Lake County, and Specialty Taxing Districts together comprise of a Taxing Entity Committee which will vote in January 2008 on the approval of the Redevelopment Area and TIF Budget for the Cottonwood Mall Redevelopment. Although all taxing entities are represented on this Taxing Committee, Granite School District controls the majority of the Budget that will be used for TIF on the Cottonwood Redevelopment. As such, the decision of Granite School District and its Board ultimately control the fate of the Cottonwood Redevelopment Project.

Why is Tax Increment Financing Necessary for Cottonwood Redevelopment?

The Cottonwood Mall exists today as one of the oldest malls “West of the Mississippi.” Built in 1962, the mall site did not have the building and land code requirements that are enforced by today’s building code specifications. As a result, the entire mall today lies in the flood plain and sits on top of a high water table. In order to meet required codes, new bridges, site elevations, and building foundations will be required in order to build any type of project on the existing site. In addition to the federal and state requirements for the land improvements at the site, underground utilities, replacement of antiquated utilities, and overall infrastructure enhancements will be required, totaling over $100 Million in infrastructure costs alone. Any type of development on the Cottonwood Site for any developer will require this upfront investment before any buildings or development can proceed.

The FACTS Of Tax Increment Financing and The Results…

If Cottonwood Development is Approved by The Taxing Entities:

• An example of one of the taxing entities would be that Granite School District Receives $171,000 today. The proposed budget that allows the Cottonwood Redevelopment to move forward would increase the existing $171,000 to an average of $900,000 per year for 20 years, which is over a 500% increase which goes directly to the school children.
• Beginning in 2031, Granite School District will receive an estimated $4+ million per year.
• Students district-wide will benefit from this tax revenue, not just those on the east side.
• Development of the Cottonwood Mall property will increase the value of the land and existing mall from $30 million to over $550 million by 2014.
• Improving the property will result in an increase in property values in surrounding neighborhoods while sustaining the historic image of the community.
• The project will represent an economic boom to the economy keeping local spending local, expanding the tax base, increasing tax revenue streams, creating new jobs and strengthening the economy.
• The dollars from a TIF district are CREATED without raising taxes and without dipping into the present tax value.

 

If Cottonwood Development is NOT Approved by The Taxing Entities:

• All Taxing Entities Granite School District could receive much less than they are receiving today, based on the mall demolition moving forward.
• In a best case, the Cottonwood Mall will remain vacant for at least several more years as General Growth Properties designs a new project type.
• Regardless of the outcome of the VOTE, the Mall Buildings will be demolished, thus taking away the tax previously generated from the former structures.
• Income tax, property tax and sales tax revenues would also be significantly impacted, resulting in fewer dollars for education, transportation and commercial services.
• Property taxes for all Holladay Residences would naturally increase substantially to make up the difference in lost tax revenues from the now vacant mall property.
• Without infrastructure funding, any project constructed on this site will have the same associated infrastructure costs (flood plain, high water table, bridges, underground electrical transmission lines, replacement of antiquated utilities and updated building and Seismic codes).
• Alternative plans could include Big Box development which would only provide minimal tax and revenue streams, similar to the current levels, and would still require assistance for infrastructure costs.
• General Growth Properties’ $500 million will be invested in another community where a more acceptable return can be generated.

 

Who is Supporting This Project?

Economic growth is important to the community, the city, state and county. A vibrant Cottonwood project will be a key driver of that economic growth. Mayor Webb and the Holladay City Council, Holladay City Planners, state and local elected officials, including Senate and Representative Officials as well as the Holladay Chamber of Commerce and an overwhelming support from the Holladay Community in general support this development project.

If General Growth Properties doesn’t develop the site, Will Another developer?

Speculation that this project will proceed regardless of whether the TIF money is approved is false. Without infrastructure funding, General Growth Properties cannot feasibly or reasonably build the proposed project. Without funding, General Growth Properties’ $550 million will be invested in another community where a more acceptable return can be generated for General Growth Properties. Any project constructed on this site (whether Big Box, Mall, Residential) will have the same associated infrastructure costs (flood plain, high water table, bridges, underground utilities, replacement of antiquated utilities and updated building and Seismic codes), regardless of the developer or project scope.

How is Funding being Proposed?

Funding for the project will come from General Growth Properties’ investment. The Budget results are as follows:

Value of Cottonwood Mall Property Today:	$30 Million
Value of FUTURE Cottonwood Property (if GGP invests $550 Million):	$550 Million
Property Tax Contribution of Cottonwood Today (All Taxing Entities):	$330,921
Property Tax Contribution of Cottonwood FUTURE (All Taxing Entities):	$6,045,010
Taxing Entities Receive 22% of Total Increment Per Year	$1.3 Million
Infrastructure Receives 78% of Costs per Year	$4.4 Million
After 20 years, Taxing Entities Receive Full Increment per Year	$5.7 Million

All Taxing Entities Receive a 500% increase in Property taxes during 20 year period, and receive a 2500% increase after the 20 year period, thus resulting in an economic benefit for all taxing entities and the development. This represents NO risk to any of the taxing entities and secures the redevelopment of the Cottonwood Mall by one of the world’s most financially stable developers.

Why do local governments Use Tax Increment Funding (TIF)?

TIF is popular with local governments and residents because it effectively promotes neighborhood stability and inspires economic development without increasing taxes or reducing the current levels of income required for schools and city services. The process is transparent with a high level of accountability. TIF lets local governments invest in infrastructure and other improvements by paying for them with future increases in property tax revenues directly generated by the project/property enhancements and overall development.

Who Uses TIF?

California has used the TIF tool since 1952 and today, 49 states and the District of Columbia have TIF enabling legislation. While TIF is used as an economic staple in cities like Chicago and San Diego, smaller and mid-sized communities such as Salt Lake City are also using TIF as a financing tool to advance economic development priorities.

What Are Appropriate Uses of TIF?

TIF is attractive to governments and residents because TIF-generated funds can only be used to improve elements within the TIF district. TIF can be used to finance costs and improvements pertaining to public infrastructure, land acquisition, demolition, utilities, sewer expansion, storm drainage, street construction, water supply, landscaping, parking structures, schools, emergency services, etc. TIF cannot be used to subsidize development project costs or for commercial improvements.

Find Out More

To find out more about this project contact:

Contact the City of Holladay
4580 S 2300 E
Holladay UT 84117
801-272-9450
Office Hours: Monday through Friday 8:00am - 5:00pm

General Growth Properties

Contact: Spencer Angerbauer
801-486-3911
Office Hours: Monday through Friday 8:00am - 5:00pm

E-mail questions to:
spencer.angerbauer@ggp.com