“Rail Line Drives Utah Development” trumpets an article in Sunday’s New York Times. The article tells of a $140 million mixed-use development being built along a Salt Lake City-area light-rail line.
It took me less than five minutes to find what was really driving this development. If you’ve been reading this blog for long, you should be able to guess it: tax-increment financing. Specifically, $24.6 million in infrastructure subsidies and $7.8 million in housing subsidies.
The budget also includes nearly $2 million in “administrative costs” and $4.7 million of “education mitigation.” That last part is intended to placate the school district that would lose revenues due to the tax-increment financing. In other words, instead of sharing the pain of tax-increment financing with fire, police, library, and other services, the local schools had enough political muscle to demand funds that the others will not get.
In any case, the developers themselves effectively get $32.4 million of their $140 million project paid by the city. I suspect that, with that kind of subsidy, they would have been glad to do the project even without light rail. But “Subsidy drives Utah development” is not likely to make the New York Times.