When the new stores and restaurants at North Park open their doors, they will represent more than just more shopping and dining opportunities for Spanish Fork residents. It will be a financial windfall for the city as well.
An independent study commissioned by the city projects that the commercial development at North Park will generate $3 million to $6 million in sales tax revenues over its first 10 years, according to city finance director Kent Clark. The city budgeted for $3.4 million in sales tax revenue for the current fiscal year, and North Park is expected to bring in another $300,000 to $600,000 per year.
Clark said the numbers in the study are based on two big box stores and several outlying stores and restaurants expected at North Park, which is near the Interstate 15 and U.S. Highway 6 interchange. Westfield Properties, which is developing the site, has said it will be similar to The Meadows in American Fork, another Westfield development. That commercial park includes Wal-Mart, Kohl's and Chili's.
The extra money should be a boon to the city because Spanish Fork's steadily increasing population is creating a greater demand for public services, and the city has been feeling the pinch.
"Our budgets have been continually increasing because of the ... demand on city services," Clark said.
Assistant city manager Seth Perrins said new residents are creating a need for more city employees, such as police officers. And roads that are built for new subdivisions require more public works employees.
On top of that, new roads cost money, as do parks and sewer system upgrades.
"It will go toward certainly some personnel, but also maybe toward some capital projects, allowing us to do some things where before we would have put it off or we would have had to bond for it," Perrins said.
Spanish Fork's population has grown by about 2,000 people a year for the past few years, Perrins said. In the next decade, the city's population of 30,000 could jump to more than 40,000.
Mayor Joe Thomas emphasized that the increased revenue stream is not just a win for the city, but for its residents as well. Without that extra sales tax revenue, the city would have to find other ways to generate money for needed improvements, such as raising property taxes.
"Citizens only pay about 85 percent of what they cost the city, between the roads and snow removal and electric and sewer and parks, recreation -- all the things the city provides," Thomas said. "The balance of that is made up by businesses through sales tax revenue."
North Park may be just the beginning. City officials said they are hoping that once the retailers and restaurants open up near the I-15 and Highway 6 interchange, they will be a catalyst, encouraging other businesses to set up shop nearby.
"You get the right stores in here and other stores tend to follow them, and then more stores come and more retail comes," Perrins said.
Westfield has said it will likely announce in May which businesses will make up the 36-acre shopping complex. Construction is expected to be completed in spring or summer of 2008.
This story appeared in The Daily Herald on page D1.
Posted in Local on Thursday, March 15, 2007 11:00 pm
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