No one can blame Orem for wanting to have its own version of retail development that is proving to have a positive impact in Salt Lake City. But unlike the City Creek project in Salt Lake City, Orem officials think the best way to attract a similar development is to provide significant tax breaks for one specific developer. The majority of this tax break will come by way of revenue that is supposed to go to all of the Alpine School District students, including students from Alpine, American Fork, Cedar Hills, Eagle Mountain, Highland, Lehi, Lindon, Orem, Pleasant Grove, Saratgoa Springs and Vineyard.

Orem’s Community Development Project Area Plan (CDA) calls for Woodbury Corporation, the owner of the University Mall, to receive a 75 percent tax break for 20 years on all new property tax revenues that come as a result of the mall property being renovated. Estimates are that Woodbury could see a $63 million tax break, $44 million of which will be taken away from the Alpine School District throughout the life of the CDA.

This CDA is a misguided project because it focuses on attracting retail activity to Orem that is already occurring in Utah. Much of this retail activity may already be occurring within the Alpine School District without a subsidy. With only a few exceptions, Tax Increment Financing, such as RDAs and CDAs, only redistribute where retail sales occur rather than increasing overall retail activity. Rebuilding a shopping mall in Orem won’t create demand. It will only shift where that demand is met.

In other words, rebuilding the University Mall and building a new office building may attract businesses from other local areas to locate in Orem, but it won’t attract significant amounts of new economic activity to the larger community. Instead, we can expect to see existing Utah County retail stores boarded up as people spend their money in the new shopping center.

In the past, if RDA/CDAs are located in brownfields, which have negative value requiring a developer to pay for cleanup or demolition before the property can be developed, then such assistance might be appropriate. That is not the case for the University Mall.

After studying Orem’s proposal, the Utah Taxpayers Association has concluded that almost all of the economic activity that would occur on the redeveloped property would otherwise occur in the greater community without a subsidy.

Consequently, the Utah Taxpayers Association opposes the CDA for the University Mall, and hopes the remaining taxing entities that are involved with this issue, Utah County, Alpine School District, Orem Metropolitan Water District and the Central Utah Water Conservancy District will join us in opposing it.

Amazingly, there are only three of the seven members of the Alpine School board who are definitely opposed to the project. They are Paula Hill, Wendy Hart, and Brian Halladay. The other four, Deborah Taylor, JoDee Sundberg, John Burton, and Scott Carlson are actually considering supporting the proposal to give $44 million of the school district’s property taxes for the University Mall subsidy!

These school board members are quick to complain that Alpine is one of the lowest school districts in spending per student in Utah. Despite this, these school board members are actually considering this boondoggle that will further limit revenue for the district.

It is the duty of those living in the Alpine School District to call their local school board members and demand they reject the Orem CDA proposal. This project takes funding away from needy students only to redistribute the location of retail activity.