City Council discusses tax incentives for Exit 13 development, addresses conflict of interest issue

Rendering of the Grapevine Crossing commercial development set to be built off Interstate 15's Exit 13 in Washington City, Utah. | Image courtesy of Troy Belliston, St. George News

WASHINGTON CITY – A tax-incentive zone is proposed for 160 acres near Exit 13 of Interstate 15 and the Grapevine Crossing project that city officials believe will spur economic development.

However, some Washington City residents are asking questions about a conflict of interest involving City Councilman Troy Belliston, who is involved with Grapevine Crossing, a commercial development proposed for the northeast side of I-15’s Washington Parkway/Exit 13 interchange.

Read more: ‘Grapevine Crossing’ to bring large commercial development to Exit 13

Belliston sat in the gallery of the council chambers as the rest of the City Council met in its capacity as the Washington City Redevelopment Agency Monday afternoon. He had recused himself from the discussion because Belliston Construction is the developer of Grapevine Crossing.

Rendering of the Grapevince Crossing commercial development set to be built off Interstate 15’s Exit 13 in Washington City, Utah. | Image courtesy of Troy Belliston, St. George News

The development, which will initially cover 40 acres, is a part of 160 acres on either side of Exit 13 that is owned by the Utah School and Institutional Trust Land Administration, or SITLA.

The purpose of the meeting was to educate newer members of the City Council on how the tax-incentive zone is created and how it functions.

Community reinvestment area

SITLA officials are requesting the Redevelopment Agency vote to begin the process of creating the tax-incentive zone encompassing the 160 acres.

Officially called a community reinvestment area, or CRA, it is an area in which property taxes can be frozen at a certain rate for a number of years. Revenue generated above that rate can be put back into the CRA for developers to use on improvements.

Also known as tax-increment financing, such deals can last up to 15 years.

We want to spend this money into the infrastructure of the area as much as possible,” Kyle Pasley, SITLA’s deputy assistant director, told the council.

A purpose of a CRA is to help improve the land within it via infrastructure improvements, sparking economic development or helping to redevelop a blighted area. Through that development, the CRA’s ultimate purpose is to provide an increased tax base to the city.

The CRA would be the first of its kind for Washington City.

The city has used tax incentives involving sales tax in regard to Walmart and the Home Depot, City Manager Roger Carter said.

Kyle Pasley, SITLA’s deputy assistant director, addresses the Washington City Council in its role as the city’s Redevelopment Agency, Washington City, Utah, April 23, 2018 | Photo by Mori Kessler, St. George News

While an argument could be made that Walmart and Home Depot may have moved into Washington City regardless due to growth, Carter said, the tax incentives certainly didn’t hurt. He credited the presence of those businesses with attracting additional commercial development to that part of town.

Kress Staheli, a former City Council member, raised concerns over the city moving on the CRA. While he agreed growing the city’s tax base makes sense, he said city residents and pre-existing businesses would be covering the cost of the tax incentives until they expire.

However, the bulk of Staheli’s objections dealt with the potential conflict of interest involving Belliston.

Part-time councilman, full-time developer

Belliston said he’s answered those questions by being open about working on the project and recusing himself when the project is on the City Council agenda.

“It doesn’t bother me,” Belliston said of the accusations, adding that as long as he’s going to bed knowing he’s doing the right thing, there’s really no issue.

There’s (sic) been a lot of innuendo and accusations,” he said, “but no one can prove anything.”

Staheli said it is strange that the pending commercial development at Exit 13, a spot eyed by developers for years, really didn’t get off the ground until after Belliston was elected in 2016, and now he’s now asking for tax incentives to benefit his development.

“So?” Councilwoman Kolene Granger said, adding that she believes there is no substance to what Staheli was implying.

Belliston, a part-time councilman and full-time developer, should be able to practice his profession, Granger said, noting that the process surrounding Grapevine Crossing and the CRA has also all been “very above board.”

I can speak to the integrity of what had been done so far,” Councilman Daniel Cluff said.

The rest of the City Council appeared to share the same opinion.

“I am asking the questions that needs to be asked,” Staheli said, adding he believes there is the appearance of conflict of interest. “Where does the City Council hat end and the developer hat begin?”

SITLA’s response

When asked by Granger if he had felt any political pressure or had been put in a compromising situation while working with Belliston, Pasley said he had not.

“No, I don’t feel compromised,” he said, adding he wouldn’t risk the reputation of SITLA as a state agency over political pressure.

Washington City Councilman Daniel Cluff discusses the proposed tax-incentive zone for Exit 13, Washington City, Utah, April 23, 2018 | Photo by Mori Kessler, St. George News

SITLA’s first priority, Pasley said, is to its trustees, those being Utah’s children via the public school system. SITLA uses the state lands it oversees to provide funding to the public schools through revenue it receives selling or leasing land.

The agency’s primary goal is to harness the best use of the land for the most benefit to public education funding.

Because of that, Pasley said, SITLA is picky about who it partners with.

Over 30 developers with various proposals for Exit 13 have approached SITLA, Pasley said, and each has been shot down because it didn’t meet the agency’s criteria.

“Nothing has moved there because there wasn’t a project to move it forward,” he said.

That changed when Belliston and his partners approached SITLA with the concept of Grapevine Crossing. The project has been described as a resort-commercial project that takes an “experience-based approach” to retail.

“They have a vision for the property that will make it viable,” Pasley said. He also said Belliston Construction is on a short leash.

This has nothing to do with (Belliston) being on the City Council,” he said.

While Belliston will build Grapevine Crossing, SITLA will remain the landowner and master developer over the entire 160 acres. The goal for the area is to bring in various types of commercial businesses to serve residents of nearby Sienna Hills and Green Springs. SITLA is particularly involved in the Sienna Hills development.

To Washington City residents who see a pending tax-incentive zone as an abuse of public funds, Pasley said they should look at it as an investment in the community and in education.

The property does not currently generate property taxes because it is undeveloped

The City Council will again meet in its capacity as the Redevelopment Agency Tuesday at 5:30 p.m. at Washington City Hall, 111 N. 100 East, to decide whether to look into the feasibility and potential financial impact of the proposed tax-incentive zone.

Ed. Note: A statement attributed to Washington City Councilwoman Kolene Granger about the City Council “not looking good” in relation to the conflict of interest issue was misquoted and has been removed.

Email: mkessler@stgnews.com

Twitter: @MoriKessler

Copyright St. George News, SaintGeorgeUtah.com LLC, 2018, all rights reserved.

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6 Comments

  • Dusty April 24, 2018 at 8:13 am

    Pasley, of SITLA, said: “Over 30 developers with various proposals for Exit 13 have approached SITLA, Pasley said, and each has been shot down because it didn’t meet the agency’s criteria.”
    That is quite a statement. I wonder if it is true. I wonder if that information could be shared. It would help justify and clarify.

  • tazzman April 24, 2018 at 3:00 pm

    Let us see all of those 30 development proposals.

  • Scott April 24, 2018 at 4:09 pm

    Hopefully any development will not increase traffic and include bike lanes.

  • utahdiablo April 24, 2018 at 10:13 pm

    Seems now that SITLA is a “Pay for play” operation…..everyone in Washington City is being sold to the higest bidder…..enjoy your future folks, as SITLA and the Washington City Council could care less what happens to you and yours as long as they get their “Payola”

  • asianspa April 25, 2018 at 8:31 am

    I see a lot of arguments only pointing to the tax revenue generation side of things… Why does nobody ever look at actual and projected long term costs and actually do a model on if the taxes or benefit justify the revenue? So you incentivized wal mart and home depot , why? Why incentivize multi billion dollar corporations that don’t pay a living wage and Wal Mart with all the police calls fall under what is most often defined as as “nuisance” business. So we as a city are happy to incentivize those that A)don’t need an incentive B)promote crime that impacts our local police and causes the need to RAISE taxes and C) Doesn’t even have a livable wage for employees so we now have a business attracting employees that are low skilled, government dependent, and have little to offer the area economically other than predatory businesses like those that take advantage of these paycheck to paycheck working poor workers… check cashing high interest pay day loans and buy here pay here car lots… hmmmmmmm GREAT JOB !! GREAT WORK!! Washington City more MENSA level leadership.

  • Walter1 April 25, 2018 at 9:30 pm

    The good old boy city government has been doing things the same way so long that they think poor ethics is the normal way to do things. There is so much conflict of interest in Dixie that the product it has produced is so poor that even the blind are beginning to see through all the smoke. Vote these self serving officials out! They are not looking out for you the citizen.

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