Hooper council hears fiscal-impact briefing on proposed Smith’s Plaza, CRA and sewer lift station

A consultant presented the findings of an economic and fiscal impact analysis of the proposed Smith’s Plaza development during Hooper City’s Aug. 7 work meeting, saying commercial retail would generate net tax revenue for the city while the sewer lift station required for the project creates a financing barrier.

Jason (consultant) told the council that “commercial development will never, at least in terms of how the current tax code is set up in the state of Utah…commercial development will never cost the city money.” He urged the council to treat the retail component as the project’s primary fiscal benefit and to secure assurances that the commercial portion will be built alongside residential development.

The consultant said his model projects about $13.5 million in cumulative sales-tax revenue to Hooper across the study period and showed property-tax revenue to the city of roughly $363,000 (total) and an energy tax item of about $30,000 (total) over the same horizon. He described the study’s baseline assumptions: a 2.5% annual sales-tax growth rate and a 4% discount rate for net-present-value calculations; the model assumes commercial activity begins several years into the project and that the full analysis covers roughly 21–22 years.

Why it matters: Council members and residents asked whether the city would bear risk for off-site infrastructure. Jason said the sewer lift station (the consultant used an engineering estimate inflated to about $2.5 million) is a regional-scale cost that could prevent the project from “penciling” for lenders unless some portion is financed through public mechanisms. He described several approaches to fund that gap: a community-reinvestment-agency (CRA) tax-increment capture, impact fees credited against future increments, a public-infrastructure district that issues its own bonds and special assessments, or a development agreement that requires upfront developer financing with subsequent reimbursement.

Council members pressed on the timing and incidence of costs. Jason said the model straight-lines incremental service costs and intentionally includes placeholders for hires and other expenses so the long-run picture is accurate, but that those incremental costs are unlikely to trigger new hires in the project’s first two–three years. He also said the model assumes the rooftops (residential units) and commercial retail “serve each other” — the commercial is unlikely to be feasible without nearby rooftops, and building residential first without commercial would worsen the city’s fiscal position.

Several residents told the council they oppose using a CRA or tax increment to fund the lift station or to divert tax revenue from school and county coffers. Public commenters cited recent county-level controversies over CRAs and argued that developer Stewart (Stuart) Adams should fully fund on-site and obvious off-site costs. Other residents said a Smith’s Marketplace would draw customers from multiple nearby cities and that the projected retail sales the consultant used are feasible.

On alternatives and risk: Jason said property-tax–based tax increment is relatively stable revenue and that, if the sewer lift station were financed by property-tax increment and structured so the city did not take direct credit risk, the city’s exposure would be limited. Sales-tax benefits, he said, are more exposed to market shifts and competition — the consultant modeled some cannibalization from nearby grocers and used conservative growth assumptions to reflect that uncertainty.

Next steps: Council members asked for more detailed follow-up and recommended additional, smaller-group conversations with the consultant and with potential financing partners (county, school district, lenders). Multiple council members said they were not ready to vote on the project at this meeting and asked staff and the developer to provide written responses to planning-commission conditions and financing options before any formal decision.

Votes at a glance: This work session included discussion but no formal vote on the Smith’s Plaza/CRA motion. Formal votes at the Aug. 7 regular meeting (see companion article) covered unrelated procedural items and a separate rezoning request.

Ending: The study and public comment left clear trade-offs: the consultant concluded the retail component produces the largest fiscal benefit but that a roughly $2.5 million sewer lift-station funding gap must be addressed through one or a combination of developer contributions, tax increment, impact fees, or a public-infrastructure district before many council members said they would be prepared to approve a final development agreement.