CEDAR CITY — Cedar City forged ahead with plans to reinvest in its Historic Downtown in an ongoing effort to revitalize the “heart of the community.”

Last Wednesday, the Cedar City Council approved a resolution adopting an interlocal agreement between the city and its redevelopment agency to fund the Downtown Community Reinvestment Project Area.

Cedar City Economic Development Director Danny Stewart told Cedar City News that the project area is one of several strategies to revitalize the city’s downtown.

“We believe that downtown is the heart of the community – the character,” he said. “We love development on the north and south interchanges, but we want to keep something special here.”

Iron County and the Central Iron County Water Conservancy District also signed agreements with the redevelopment agency, giving the agency authority to use a new property tax increment, resulting from increased property values, to fund incentives for local businesses in the downtown area.

Discussions with the Iron County School District are ongoing, Stewart said. Should they not approve an agreement, the agency could receive a smaller percentage of funding or “move more slowly.”

The council unanimously approved the project area, which encompasses approximately 92 acres between 200 North and 200 South, including Center and Main streets, on Dec. 7, 2022. The project area was recommended by the Historic Downtown Economic Committee.

The project area would not be Cedar City’s first. The trees and flower baskets along Main Street, the parking garage and the Heritage Center Theatre all resulted from a similar undertaking, Stewart said.

The interlocal agreement would not raise taxes or impact a property owner’s rights, Stewart said.

A building’s owner is charged a base property tax based on the property’s value. If, for instance, the owner renovated the building, the value and thus their property tax would increase, Stewart said. The tax increment is the resulting tax revenue generated by such projects.

The redevelopment agency will use 85% of the tax property tax increase in the project area to encourage development, improve or maintain infrastructure, offer incentives or reimbursements to developers, or pay the agency’s expenses over a 25-year period, Stewart said. The taxing entities would still receive 100% of the base tax.

If one of two projects are in the works simultaneously, investing $27 million, Stewart estimated that $5.3 million in new taxes would be generated over 15 years, with $1 million collected.

“That’s dollars they’re not getting right now that would be divided among the taxing entities,” he said, adding that this number is in addition to 2022’s valuation of property tax revenue equaling $420,000.

“And we’re only asking the taxing entities for that 25 years,” he added. “So — say a project came in at year 24, we can only use one year’s increment off of that project. So we’d like to get a few things done upfront, but we also want our taxing entities to know that they’re not stuck here forever, that they’re going to be able to benefit from that investment.”

The agency hopes to incentivize developers by offsetting costs, Stewart said.

“You come in,” he said. “You do something that costs a bunch of money and your property taxes go up and you pay it. But you can qualify for a refund on a portion of that or we can use a portion to pay for new water, sewer, or whatever infrastructure is needed.”

The costs associated with renovating in a historic district are often high, said Stewart, adding that it can be more expensive to renovate older buildings than to tear them down and build something new.

“And we don’t want our downtown torn down,” he said. “We like its character. We like that feel of it … . We want to maintain the look and the feel and the character of the downtown and that happens by keeping and renovating old buildings. Or when new buildings are built, we ask them to architecturally fit.”

Stewart said the agency would like to avoid developers constructing “futuristic George Jetson things,” or buildings without character.

“Now, we can’t stop people from doing that, but we can say, ‘If you’re going to take advantage of this program, and some sort of incentive, then we’d like to work with you to maintain the look and feel of the downtown,’” he said.

The project is one of several “tools” the city’s Economic Department is using to promote investment and new jobs in downtown Cedar City, Stewart said.

“What we’re looking for is things that fit the downtown and make it a nice destination for our residents and for visitors to the community,” he said.

Services the department is encouraging, include restaurants, retail outlets or housing, but the redevelopment agency will consider each project on a case-by-case basis, Stewart said. Several investors have expressed an interest in participating but no projects have been approved yet.

Because the project area is limited to eight phases, approved projects are likely to be larger in scale. For instance, if a developer wants to purchase an old building that requires foundation repair or other major renovations to “bring it up to code” the effort is more likely to be approved than someone who would be making minor alterations.

Additionally, each phase is limited to 15 years total and wouldn’t benefit from the incentives passed that point, Stewart said.

How to participate

A developer who completes a project in 2023 and pays the resulting increased property taxes could theoretically begin to benefit from the program as early as 2024, Stewart said.

Those interested in applying will need to complete an application. However, Stewart said the documents are not yet available, as they are waiting to conclude discussions with the Iron County School District.

Potential candidates should watch Cedar City’s social media, the Department of Economic Development’s website and the mayor’s newsletter for the upcoming announcement, Stewart said.

In the meantime, there are currently two grant programs available to businesses in Cedar City’s downtown area: the Historic Downtown Facade and the Tenant Improvement Program, for updating or renovating historic building facades, and the Historic Downtown Sign Improvement Grant, for improving the look of signs and ensuring they conform with city ordinances.

Those interested in viewing the discussion of the Downtown Community Reinvestment Project Area can do so on Cedar City’s YouTube channel. To view the discussion of the interlocal agreement on Feb. 1, click here.

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