The years-long struggle over how the old Geneva Steel Mill property will be developed is taking on a new dimension thanks to a law passed during the recent legislative session. Using Senate Bill 205, Anderson Development LLC is asking Utah County to create a redevelopment agency to expedite their plans for 1,700 acres on the eastern shore of Utah Lake. The RDA would be an end run around a similar proposal by the town of Vineyard where the property is located. (An RDA is a property tax increment financing incentive to attract businesses and jobs to the area.)

The Sandy-based developer and town leaders each argue the other side has been unwilling to move forward for a variety of reasons.

Two sides

On Tuesday, Anderson will meet with Utah County commissioners to discuss the creation of the RDA it hopes to use to remediate part of the former steel plant site, build infrastructure and incentivize businesses to locate to the project. No decisions will be made by commissioners at the meeting.

Because it is a performance-based tax incentive, Anderson may have to invest as much as $100 million in building out the project and securing retail, commercial and industrial tenants, or it won't receive the incentive, said Michael Hutchings, a partner with Anderson.¬  ¬ 

Anderson is now petitioning for the RDA through Utah County instead of Vineyard because of the "difficulties" the company has encountered in its discussions with the city over the past two years, Hutchings said.

"We've made numerous presentations to the city about the RDA since January 2006. But for various reasons, they've not been willing to move forward," he said.

Vineyard Mayor Randy Farnworth said it is the town waiting on Anderson for several key pieces of information including geographical parameters and dates required for an RDA.

"My staff is just as frustrated as I'm sure their staff is," he said, though Hutchings contends Vineyard was the roadblock to geographical boundaries.

"Now that the new legislation has passed, Vineyard now wants to move forward with the RDA," Hutchings said. "Last week, they agreed to define the geographical parameters of the RDA, something they've not been willing to do before."

The law

SB-205 was pitched by Anderson, said Sen. Curt Bramble, R-Provo, who sponsored the bill. It allows Utah County government to create an RDA on Vineyard's land, bypassing the town's authority.

Bramble said he doesn't see it that way. The law, he said, is important because that area is also going to be the focus of significant state dollars for transportation projects, and the Anderson project plays an integral role.

"There's more ramifications with that project than just the city of Vineyard," Bramble said.

Farnworth said the bill was written and pushed through a legislative committee before the town was even aware of its existence. That appears to be true, though Bramble counters that the town leaders were given a chance to respond before it was voted on by either house of the Legislature. Orem leaders, for example, got some changes made before final passage, he said.

Despite recent movement regarding Vineyard's RDA, Hutchings said he feels that it's more appropriate for the county to handle the RDA project.

"You have to get a government entity that's properly staffed and funded and motivated to do the work associated with setting up and administrating the RDA," he said. "Vineyard doesn't have an economic development director, but Utah County does. It also has seasoned county commissioners that would be willing to take on the project. Because of its size and its economic development track record, Utah County will be a better government body to handle [one of the] largest RDAs in Utah."

Farnworth said even if the county creates an RDA, the town will still be at the table and plans on being heard.

"You're going to have to deal with us one way or the other," he said.

Slowed progress

Hutchings blamed the economic downturn for difficulties the company is experiencing with paying for remediation of the rest of the former steel plant site. So far, Anderson has already spent about $5 million remediating half of the property.

The entire project is expected to be completely remediated over the next three to four years. ¬ 

"U.S. Steel, the former owner, is responsible for covering about 75 percent of costs of remediation. But the economy has hit the company hard and the amount of money we're spending on remediation has slowed," Hutchings said.

"It will depend on whether we keep some of the impacted material on part of the site and seal it, or completely remove all of it, which would be very expensive to remediate. Impacted materials tend to have more metal concentrations than would be allowed in residential subdivisions," he said.

The RDA would give the company a financing mechanism to remediate the rest of the property; build storm drains, water and sewer lines; have a new UTA transit stop and parking lot for a commuter rail station at 800 North, west of Geneva Road; and also provide tax incentives for large retail and office tenants to locate to the area, he said.

Hutchings said the proposed mixed-use development, which was first announced in 2005, has been delayed in part because of difficulties working with Vineyard, but to a larger extent, the economic downturn and the credit crunch, which is affecting the company's ability to finance property development.

"All this has retarded Geneva's development by about a year, maybe two," he said.

And because of the difficulty in getting bank financing for real estate projects, Anderson hopes to obtain loans from the U.S. Department of Housing and Urban Development to fund the building of apartment complexes, as well as funding from private investors for retail and office developments.

The company sold about 125 acres of remediated property to various industrial builders as well as to government entities, including the Central Utah Water Conservancy District, UTA and the cities of Lindon and Orem.

"We sold about $35 million worth of property despite the recession last year," Hutchings said. "But our sales in the first part of 2009 have slowed because demand for land has diminished along with businesses' ability to finance land purchases. We have some pending sales from industrial builders in the second quarter, and we're hoping things will pick up by the third and fourth quarter."

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