SALT LAKE CITY -- A decision by Sundance Film Festival organizers to move their headquarters from Salt Lake City to Park City could cost the arts organization several hundred thousand dollars in county support next year.

The Salt Lake County Council has recommended that the Robert Redford-founded Sundance Institute no longer be considered eligible for top-tier zoo, arts and parks funding unless the organization maintains its headquarters in the county. The organization plans to move its headquarters to Park City in August.

Last year, the Sundance Institute received $555,000 in funds. The council said Tuesday that organizations not based in the county should only be eligible for second-tier arts funding, at a maximum of about $100,000.

Sundance is not acting as a "Salt Lake County-centric" group, said Councilman Joe Hatch, who supported the change. "They are doing it as a Park City, Hollywood-centric group. What we want is a direct benefit."

In 2005, 25 of the county's largest groups competed for about $9.2 million in county funding, which is supported by a local option sales tax. More than 100 lower-tier groups competed for about $874,000.

Vicki Bourns, the county's program director for zoo, arts and parks funding, said Wednesday the council is expected to give final approval to the headquarters requirement for top-tier groups in several weeks.

Institute director Jill Miller said her organization realized before the decision was made to move to Park City that it might lose some county arts funding. Miller said she is not worried about losing part of that money because Park City has promised $220,000 a year, and both private donors and the city's chamber of commerce are increasing their contributions.

"The lion's share of our planning for the film festival happens in Park City. It makes sense for us to relocate our office up there," Miller said.

Councilman Randy Horiuchi, who voted to maintain the group's top-tier eligibility, said the festival brings considerable exposure to Salt Lake County.

"They are such a massive, massive presence in Salt Lake County," Horiuchi said. "For us not to help them because their headquarters is not here is specious."

Miller said the organization wants to move its office to Summit County, where Park City is located, for long-term visibility.

This year there were 500 screenings in Summit County and 120 screenings in Salt Lake County, said Sundance Institute spokeswoman Irene Cho.

Miller said Sundance brought more than 1,000 additional moviegoers to Salt Lake County for the 2006 festival.

This year, a festival district was created in downtown Salt Lake City. Ticket sales at Salt Lake screenings were up 12,000 this year, and Sundance officials said they will expand the festival's downtown presence next year.

In 2005, almost 47,000 people attended the independent film festival in Park City and surrounding Sundance sites, according to a University of Utah Bureau of Economic and Business Research. Numbers for this year's festival aren't available yet, Cho said.

This story appeared in The Daily Herald on page C3.