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Consultant outlines Housing and Transit Reinvestment Zone option for Provo Town Center Mall and BRT stations
Summary
A municipal bond underwriter briefed the council on Housing and Transit Reinvestment Zones (HTRZs), describing state requirements, affordability thresholds, density targets, and the potential to capture up to 80% of property-tax increment for long periods to finance transformative redevelopment near transit.
Sam Hartman of DA Davidson described the Housing and Transit Reinvestment Zone (HTRZ) program and how the tool could be used around Provo's FrontRunner and BRT transit stations, including the Provo Town Center Mall area.
Hartman summarized the statute (effective in 2021) and recent amendments under consideration at the state legislature. He said the program’s core objective is to promote dense, mixed-use housing near transit by providing tax-increment financing at enhanced capture rates and durations for qualifying applications that the governor’s office of economic opportunity (GOEO) approves. For commuter rail locations, Hartman said, GOEO approvals can allow up to 80% capture of property-tax increment for 25 consecutive years (with an option to delay the start), and applicants must meet density and affordability thresholds. Under the current code, 12% of the new housing in an approved HTRZ must be affordable: 9% at 80% of county median income and 3% at 60% of county median income. Hartman noted BRT-specific thresholds that permit a lower density (39 dwelling units per acre) in exchange for a 60% capture rate over a shorter period.
He described eligibility and application mechanics: an applicant (often the city or an RDA) files an HTRZ package with GOEO that documents the project, the public benefits, a "but-for" financing gap analysis and a redevelopment plan. The GOEO application process convenes a review committee that includes representatives of the governor’s office, state transportation officials, the state treasurer, legislators and the local school district; committee approval can substitute for separate agreement with each taxing entity. Hartman said the committee favors transformative, transit-oriented proposals, and that the committee has approved zones described as catalytic in other jurisdictions.
Hartman advised that Provo could choose parcels within the station radius (commuter rail radius may expand from one-third to one-half mile under a pending amendment) and that the city could include noncontiguous parcels in a single application. He also emphasized that HTRZ revenue can be applied to project costs (e.g., structured parking) or to developer incentives and that jurisdictions sometimes reserve portions of the captured increment for public improvements within the zone.
Councilors asked procedural questions: whether it is better to submit a single comprehensive application that covers multiple parcels around a station or separate applications for separate stations, how the 25-acre minimum/maximum rules apply, and whether the city would be required to pass a local agreement with every taxing entity. Hartman said single, larger applications are often more efficient and noted that GOEO committee approval can substitute for individual taxing-entity negotiations.
Hartman closed by offering DA Davidson’s assistance on application preparation and the gap analysis. The council did not vote on the matter at the session.
