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Provo staff brief council on four sales tax-increment payments; East Bay figure flagged for follow-up
Summary
Economic development director Cody Hill presented four contractual sales tax-increment post-performance payments (Days Market, East Bay Shopping Center, Parkway Village, Riverwoods), explained how base amounts and increments work, and said staff will investigate an apparent drop in East Bay receipts before returning findings to the council.
Cody Hill, economic development division director, presented a grouped staff briefing to the Provo City Council on four contractual sales tax-increment post-performance payments and the background of the agreements, which date to 2016–2019.
Hill described two typical uses for sales-tax-increment agreements: incentives to attract new large retailers or assistance to existing outlets to remodel or expand. He explained that the state no longer permits creating new agreements of this type and that existing arrangements were executed through redevelopment agencies. "They're not allowed by the state under... we're not allowed to do new ones," Hill said, adding that earlier agreements were a tool used to preserve or boost local sales tax revenue.
Hill listed the payments under consideration and the amounts shown in the staff packet: Days Market — approximately $13,509; East Bay Shopping Center — approximately $57,765.50; Parkway Village — approximately $83,851; and the Shop at Riverwoods — approximately $31,003. He noted the cap amounts in the underlying agreements can be substantially larger (examples Hill cited included six- and seven-figure caps) and that current payments do not necessarily indicate the agreements will reach their cap amounts.
Hill told the council that East Bay’s payment showed a decline from the previous year (from about $65,000 to roughly $57,000) and that he had asked finance staff and representatives at East Bay to double-check the sales-tax receipts. "That was the only one that really had a drop from 65,000 last year to 57 this year," Hill said; he added that Daniel Fala in finance is assisting with the reconciliation.
Council members asked clarifying questions about what properties are included in the Parkway Village increment area (for example, whether it covers the Walmart and attached out pads but not all outlying buildings). Hill confirmed inclusion typically covers the primary site, attached out pads and specific parcels identified in the original agreement rather than the entire commercial corridor.
A councilor asked how the increment is calculated; Hill explained the concept of a base year (the baseline sales-tax amount) and that increments are the portion of sales tax revenue in excess of that base year; typically a share of the incremental revenue is remitted per the agreement. He also agreed to provide a consistent report format including historical comparisons and inflation adjustments to help the council assess performance over time.
The resolution language was presented on the agenda as an appropriation in the general fund for the four contractual post-performance payments; the transcript records the presentation and council discussion but does not record a formal council vote on the appropriations in the public portion of the meeting.
Separately, the council moved into a closed session later in the meeting for a permissible purpose under statute (strategy session for the sale of real property). A motion to close the meeting was made and seconded; councilors recorded as voting "Yes" during the roll call on the closed-session motion included Councilor Bogdan, Councilor Whitmore, Councilor Christian, Councilor McKay and Councilor Garrett. The council recessed to the closed meeting.
