CRDA projects have fostered Mt. Pleasant economic growth
‘Let’s keep a good thing going,’ official suggests to board
MT PLEASANT—The Mt. Pleasant Community Development and Renewal Agency (CRDA), a local agency set up in 1983 to encourage economic growth, has been a good deal for the city, according to the CRDA executive director.
In fact, Monte Bona says, it’s been a good enough deal that the city might want to seek the support of the North Sanpete School District, and other taxing entities, to extend the life of agency 5-10 years.
Doing so could enable the CRDA to get involved in at least one more project, a condominium development on the site of the old Mt. Pleasant Elementary School.
“The mission of an CRDA,” Bona says, “is to go into areas where there’s blight, where there’s underdevelopment, and enter into partnerships between the public and private sector to bring new buildings to the area, so that when you’re finished and the CRDA goes out of business, you’ve added value into the city.” The Mt. Pleasant CRDA has done that, he says.
A CDRA is an agency defined under state law that works to bring new development into a community. Mt. Pleasant is the only city in Sanpete County with such an agency.
Under the same state law, the board of directors of a CDRA consists of the mayor and city council of the city in question.
At the January meeting of the Mt. Pleasant CDRA, Bona made a report to the board covering where the agency started, where it’s at now and what it might do in the future.
The primary future focus, Bona suggested, might be entering into a public-private partnership to development moderate-priced condominiums on the old school site. Such a project, he said, would significantly increase the Mt. Pleasant City tax base, which is one of the main reasons for setting up an CRDA in the first place.
However, support from the school district and other taxing entities would be needed because the CRDA, like other CRDAs in Utah, uses a funding mechanism called “tax increment financing.”
When a CRDA starts out, it figures out how much property tax is being collected within defined redevelopment area boundaries. Then it goes to work to bring more development to the defined area. As development comes in, tax collections within the boundaries increase. That “increment,” or additional revenue, goes back to the CRDA to help it initiate more projects.
The downside is that the city, school district and other taxing entities forego the additional tax revenue for a number of years, although theoretically, because of the additional development, they get more revenue in the long run.
One measure of the success of the Mt. Pleasant CRDA is that when it went started out, the assessed valuation within its boundaries was $6 million. Today, the valuation is approaching $20 million, Bona said.
When the agency started out, the tax increment was $20,000. In recent years, the increment has been about $108,000, he said.
Even though the CRDA was designated in 1983, it was dormant until 1997, when the first funding was secured. That was also when Bona came on the city council and started pushing projects.
In 1997, the agency outlined plans to develop an industrial park in two phases, with the first phase starting in 1997 and the second phase in 2004. The U.S. Economic Development Administration, an agency of the U.S. Department of Commerce, provided $825,000 for both phases.
The CDRA was originally set to expire in 2008. But thanks to a law passed by the Utah Legislature, a redevelopment agency was allowed to extend its existence for seven years if the agency was developing an event center or an airport (Bona explained this was primarily designed to benefit the Rio Tinto Stadium project in Sandy).
The Mt. Pleasant CDRA took advantage of the extension to develop the ConToy Arena. That project started in 2009.
Then, because of some calculation errors in how much tax increment money was due to the agency, the Mt. Pleasant CRDA was able to get approval to continue for three additional years while shortfalls were being made up. Therefore, the CDRA is now set to expire in 2018.
The ConToy project started out with a $565,000 grant and a $1 million loan from the Utah Community Impact Board (CIB). The CDRA was able to gain additional grants from the George S. and Dolores Dore Eccles Foundation for $305,000, $125,000 from the ConToy Foundation, and approximately $20,000 from a variety of other contributors. And the city is using $48,000 per year from tax increment funds for payments on the CIB loan.
Meanwhile, Sanpete Eventing, the entity that operates the arena, has made more than $125,000 in monetary contributions and improvements to the equestrian center. Bona estimated that the arena is now worth $3.5 million.
The latest project for the CDRA is the aquatic center, set to open this coming summer next to the splash pad. The aquatic center was funded with a $1 million grant and $1 million loan, both from the CIB.
The CDRA also secured a commitment from Wasatch Academy and North Sanpete School District to provide $35,000 per year for operational expenses or debt service. A ballot initiative that approved new fees on local utility bills completed the revenue needed for operating costs.
Bona noted that the CIB funding will pay for pool construction but won’t cover site improvements that will also be required.
Sunrise Engineering has submitted an estimate of $206,000 to finish those improvements, and Bona has submitted an application to the Eccles Foundations for $80,000. Bona said he was “optimistic that they might find it attractive.”
In his briefing for the CRDA board, Bona talked the fact that the North Sanpete School District has received an offer from a California developer to buy the old Mt. Pleasant Elementary School, which borders the aquatic center, and build condominium units there, Bona said.
The developer is a private entity, but is interested in getting tax credits to help with financing. Bona suggested that the CDRA could help with that. Redevelopment agencies were created to eradicate blight, he said, and such a project would fit squarely within such an objective.
Bona informed the board that the developer had recently visited the site, and was still interested. Bona said the site was very attractive, since within only a few blocks are a pool, a bank and a church. Bona cautioned that the developer had still not made a formal offer, so the project was still “up in the air.”