Utah Inland Port Authority approves $150M in bonds, creates body to oversee it

The area at I-80 near 7200 West where the Utah Inland Port is planned to be built in Salt Lake City is pictured on Jan. 27, 2020 The Utah Inland Port Authority voted Monday to approve $150 million in bonds meant to increase production of the growing inland port.

The area at I-80 near 7200 West where the Utah Inland Port is planned to be built in Salt Lake City is pictured on Jan. 27, 2020 The Utah Inland Port Authority voted Monday to approve $150 million in bonds meant to increase production of the growing inland port. (Steve Griffin, Deseret News)



Estimated read time: 6-7 minutes

SALT LAKE CITY — The Utah Inland Port Authority voted Monday to approve $150 million in bonds meant to increase production of the growing inland port, prompting outcry from opponents who say the move creates an "enormous slush fund" for the authority at taxpayers' expense.

The decision marks the latest episode in the ongoing saga involving the Utah Inland Port, which state leaders proposed to maximize Utah's position in the global economy, using about 16,000 acres in Salt Lake City. The area makes up about one-third of the city's last remaining developable lands.

The bonds will go toward a public infrastructure district — a relatively new idea in Utah. The creation of such districts, referred to as PIDs, was first allowed through a 2019 bill passed by the Utah Legislature, leaders of the port authority said earlier this month.

The vote came after a group that's been opposed to the Utah Inland Port attempted to deliver a petition voicing opposition to the bond earlier Monday. But Stop the Polluting Port Coalition was blocked from delivering the petition that received more than 2,000 signatures, said Deeda Seed, the group's organizer.

Petition rejected

When the group arrived at the Utah Inland Port Authority office, the members were asked by security guards to leave the building before they could speak to authority members and pass along the petition, according to Seed. The Utah Port Authority office is housed in a private office building in downtown Salt Lake City.

The move was another show of authority, she said.

"This has not happened before, although, to be fair, we haven't (previously) tried to deliver a petition. Usually, we're delivering petitions to the Legislature, and the last time that we did that, they were accepted by the governor's staff and by legislative leadership," Seed said.

"This was a very unfortunate thing that we can't deliver these to the office of the Utah Inland Port Authority. We may try to mail them," she said.

Seed expressed concern that the Utah Inland Port Authority planned to take a vote later the same day in a virtual meeting.

Among the group's main concerns is what Seed described as the public's exclusion from a process that could lead to "huge chunks" of public money being spent on a project that hasn't yet been fully explained.

Utah Inland Port Authority leaders said earlier this month that public infrastructure districts allow cities, counties and developmental authorities the ability to finance new infrastructure that's used for public use. That can be upgrades to roads, water and wastewater systems, utilities, public transportation or parks. The same concept exists in other states under terms such as "metropolitan districts" in Colorado and "general improvement districts" in Nevada.

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One of the proposed projects is a transloading facility that would be located just south of the Union Pacific Intermodal facility near Salt Lake City's Glendale neighborhood. The 43-acre facility would be located in the area of 5600 West and 1100 South and used as a "cost-effective and more efficient" transportation between the railroad hub and trucks importing and exporting items to and from the hub, leaders said earlier in October.

The Utah Inland Port Authority first announced plans for the bond on Sept. 8. Leaders had planned to vote on it on Sept. 20 but the meeting was postponed after the agency received a letter from Salt Lake City leaders asking for a pause on the vote to allow them more time to research the proposal and as Stop the Polluting Port Coalition protested outside of the authority's office building.

City leaders and Stop the Polluting Port coalition were also concerned because property tax would go into repaying the bonds, which could end up at an 8.5% interest rate — meaning it would cost taxpayers $255 million in total over a 35-year term of the loan.

Although the authority held a webinar to explain the bonding to the public, Seed said few details have been provided other than what is being "contemplated."

Resolutions pass

During the virtual meeting Monday, debate focused largely on the makeup of the proposed PID and representation rather than how the money will be spent.

Randy Larsen, a municipal bond attorney for Gilmore Bell, explained that the PID would be a separate entity from the port authority, but the port authority would oversee it. He said the separation of the PID will add "flexibility" in how revenues and bond projects can be financed and managed.

Dennis Faris, Utah Inland Port Authority board member, asked if elected representatives could have representation on the PID board, as he said those slated to be appointed don't represent Salt Lake City.

"I wonder what kind of voter accountability we could tweak this to include?" Faris questioned.

Larsen said that could be done, but the only revenues that will be generated by the bonds will be "within the Port Authority's project area as created by the Legislature, so they can't increase any taxes, any funding, any abilities on Salt Lake City or any of the other project entities."

He said the intent now is to "keep it to a more narrow board because of its limited purpose" in dealing with bonds alone.

Jack Hedge, executive director of the Utah Inland Port Authority, said the purpose of the PID is to "encapsulate any future risk" with the bonds instead of "encumbering and burdening the entity of Utah's Port Authority."

Larsen said the $150 million in bonds will carry a 35-year term with interest rates not to exceed 8.5%. He said it's anticipated the interest rates will be "much less" than 8.5%, but he did not provide an expected figure.

Before the vote, Faris proposed waiting to approve the bonding until Salt Lake City's challenge to the Utah Inland Port makes its way through the court system. The Utah Supreme Court has yet to announce a decision about whether the Utah Legislature's creation of the Utah Inland Port Authority in northwest Salt Lake City violated the Utah Constitution.

Faris' proposal was rejected by the authority.

Before taking a vote, the authority opened the meeting to an approximately 10-minute public comment session.

Teri Durfee, a Tooele County resident, called the PID "absolutely unnecessary," saying cities could handle development costs themselves. She contended the proposal is meant to take the community "out of the equation."

"One of the major expenses would be for an intermodal rail facility," she said, noting that "we already have this" with Union Pacific Railroad.

Katie Pappas said Monday's discussion ahead of the vote made the PID "sound even worse than I imagined."

She said the PID board would be "policed by themselves," contending it would be corrupt and provide funding "for the sole benefit of the port authority and the developers."

She pointed to the Stop the Polluting Port Coalition petition being rejected by the authority as a symbol of the Inland Port Authority not listening to the public.

"Something has to change. The things that make this place special are being sacrificed in the name of economic development," Pappas said.

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