Why Salt Lake leaders support this Utah Inland Port bill despite losing voting power

SALT LAKE CITY — Utah's anti-inland port activists aren't happy with it, but Salt Lake City leaders are — for the most part.

A heavily negotiated bill to again make changes to the governance structure of the controversial Utah Inland Port Authority, the entity tasked with building a global trade hub in Utah's capital city, cleared its first legislative hurdle on Wednesday. It was unanimously endorsed by the House Transportation Committee, and now goes to the House floor for consideration.

The bill, HB443, would dissolve Salt Lake City's voting membership on the Utah Inland Port Authority Board in exchange for a 25-year contract and a larger share of future tax increment within the port's 16,000-acre jurisdiction, which makes up about 1/3 of Salt Lake City's remaining developable land.

The bill has the blessing of Salt Lake City Mayor Mendenhall and the Salt Lake City Council. While they acknowledge the legislation isn't perfect, it would result in better equilibrium between the city and the state in what's been a yearslong battle over the port authority, what the mayor called a perennial "can of worms" that's opened each legislative session.

"You've got a real honest broker here," Mendenhall told lawmakers on the House Transportation Committee, giving a nod to the bill's sponsor, House Majority Leader Mike Schultz, R-Hooper.

"What we've negotiated here I think is a final closure to the worm can," Mendenhall said, "and gives us a great amount of security on both sides, which is something we both desperately need."

Before presenting the bill alongside Mendenhall, Schultz joked that if he looked "a little beat up, it's because I am a little beat up" from running into a "buzzsaw" three weeks ago in a meeting with the mayor, Salt Lake City Council members, and Salt Lake City Democratic lawmakers including Rep. Sandra Hollins, Rep. Angela Romero and Sen. Luz Escamilla.

While they didn't "appreciate" an earlier version of the bill, Schultz said those negotiations have resulted in a compromise that's "extremely beneficial to the surrounding communities ... and accomplishes the statewide goal of the inland port."

What did Salt Lake City negotiate?

Here's what Salt Lake City gave up: HB443 would whittle the port board's 11 members down to five voting members and three nonvoting appointees. The Salt Lake City and Salt Lake County mayors would no longer have a voting member on the board. Neither would a member of the Salt Lake City Council, or representatives from West Valley City or Magna.

Instead, legislative leaders would have the most control over the board's makeup. The Senate president and House speaker would each have appointees, as well as an additional voting member they'd jointly appoint "with relevant business expertise." The governor would keep two appointees who are not government officials, one with economic development expertise and one from the business community.

Of the three nonvoting members, the bill would require one to be a member of the Salt Lake City Council whose district falls within the port authority's jurisdiction. The board would choose the other two with "expertise in transportation and logistics," according to the bill.

Now, here's what Salt Lake City negotiated in return. In exchange, the bill would require the city and the port authority to enter into a 25-year contract beginning Jan 1, 2023. Under that contract, Salt Lake City would be required to give up 65% of the project area's tax increment, in other words, future tax dollars from development. That figure would shrink by 2% for the first seven years. From years eight to 14, the share would stay at 35%, then in years 15 to 25 it would stay at 33%.

That starting 65% is less than the 75% Salt Lake City is currently required to give up to the port authority, and it would also come with a stipulation that the port authority spend 40% of that money on environmental mitigation projects, 40% on community mitigation projects and 20% on economic development.

"This agreement will provide direct, long-term financial support for the next generation of Salt Lake City residents, particularly those who live on our west side communities," Mendenhall said.

"Yes, this is a win for Salt Lake City," Mendenhall said, though she added: "No, it does not alleviate all the concerns that I have, and it still underscores the need for a decision from the Supreme Court in the pending case on this matter."

So no, the legislation does not render moot the case that's now sitting in front of the Utah Supreme Court, in which Salt Lake City contends the Utah Legislature's creation of the port authority violated the Utah Constitution.

While Mendenhall said she's "disheartened" that other municipalities have "lost their voice as a voting member" on the board, "I am certainly pleased that the state recognizes the need for environmental protections and trusts us to be a partner in making that happen."

"With an inland port invariably coming to Salt Lake City, our desire is to make this the greenest and the cleanest inland port in the world, and Salt Lake City will now have an integral role in the administration and the oversight and, frankly, the spending on these operations," she said. "This bill creates skin in the game."

Schultz, acknowledging that other cities like Magna aren't happy to see their seats on the board disappear, said "not everybody sees it as perfect." But he said the size of the port's current 11-member board "has not suited the inland port and its statewide mission as a whole."

The board's new members and their expertise in business, transportation and logistics will be "really important to help the board move forward in a productive manner," Schultz said.

Community pushback

Deeda Seed, a campaigner with the Center for Biological Diversity and a lead activist with the group Stop the Polluting Port, spoke against the bill, opposed to stripping elected officials as voting members of the port authority board.

Noting the Utah Inland Port Authority has accrued $150 million in bonds that will need to be paid back using property tax revenue, "the stakes are now very, very high for local taxpayers, yet this bill eliminates local government representatives from decision-making roles on the body that will spend the money."

Seed said the contract between Salt Lake City and the port authority "does not resolve that problem."

"Not only is this an abandonment of good governance, but it is also a violation of the Utah State Constitution under the Ripper Clause, and a further example of the same illegal behavior that caused Salt Lake City to file suit against the port authority and the state in 2019," Seed said.

Katie Pappas, a resident of Salt Lake City, also spoke against the bill, calling the board's restructuring an "unconstitutional power grab."

"The Legislature would have complete control over the Inland Port Authority Board," she said, adding that she's also concerned the port authority would still end up with most of Salt Lake City's tax increment and "use it to incentivize private businesses and developers."

"There is no bill or amendment," she continued, "that would make an inland port in the Salt Lake Valley a good thing."

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