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Advisor outlines Housing and Transit Reinvestment Zone (HTRZ) tool for Provo Town Center Mall
Summary
DA Davidson presenter Sam Hartman summarized how the Housing and Transit Reinvestment Zone (HTRZ) program works, eligibility and requirements (including a 12% affordable set‑aside), and how Provo might configure an application around commuter‑rail or BRT stations to capture tax increment for transformative redevelopment.
Sam Hartman of DA Davidson presented an overview to the Provo City Council of Housing and Transit Reinvestment Zones (HTRZs), a state program created in 2021 to encourage high‑density housing near transit by capturing property tax increment to close financing gaps on transformational projects.
Hartman explained the core objectives the state looks for: build new housing that is affordable, and site it near public transit. He said a successful HTRZ application must demonstrate a “but‑for” financing gap — that the proposed development would not proceed at the desired density, mix or affordability without the HTRZ tax increment support — and noted that the governor’s review committee favors projects that are clearly transformative.
Key statutory mechanics Hartman described include a minimum 12% affordable housing requirement (9% of units at 80% of county median income and 3% at 60% of county median income under current code language) and density thresholds that affect the share and duration of captured increment. For commuter rail stations, up to 125 non‑contiguous acres can be included (BRT has lower limits). For a typical commuter‑rail HTRZ that meets the higher density test, local agencies can retain 80% of property tax increment for up to 25 years (with potential sequencing that can extend collections across phases), while the remaining increment flows back to other taxing entities in the statutory split. Hartman also described a separate sales tax increment program (T‑TIF) that can provide limited sales‑tax grant support to projects, and noted that the HTRZ program’s TIF and property tax capture rules differ.
Council members asked practical questions about how to draw zone boundaries (single vs. multiple stations), the advantage of selecting a larger radius around commuter‑rail stations (a pending legislative amendment could expand commuter‑rail radius from one‑third mile to one‑half mile for certain cities), and whether it is strategically better to include non‑contiguous parcels around the Town Center Mall within a single application. Hartman advised that putting planned parcels for a given station into one application is typically more efficient and that phase‑by‑phase triggers can allow separate portions to start their 25‑year capture window later.
Hartman also described the GOED (Governor’s Office of Economic Opportunity) review process and the committee’s makeup — affected taxing entities, state officials and legislators — which determines approval; if approved, jurisdictions do not need separate unanimous approval from every local taxing entity in the same way a traditional CRA would require.
Ending: Hartman offered the city follow‑up help drafting an application and gap analysis if the council decides to pursue an HTRZ anchored on the Provo Town Center Mall or nearby BRT/front‑runner stations. The council requested time to study the density, parcel selection and affordability trade‑offs before deciding whether to pursue an application.
