ST. GEORGE – Washington city officials have approved the creation of a tax incentive zone for the pending Sienna Hills auto mall. The tax incentives are seen as a way to attract dealers to the auto mall while paving the way for a potential $ 75 million in sales taxes for the city over a 10-year period.
At a meeting on Wednesday of the city’s redevelopment agency – which is made up of the mayor and city council – an interlocal agreement was approved, paving the way for the creation of a community reinvestment zone of more than 42 acres along Interstate 15 through Exit 13 where the Sienna Hills Auto Mall is to be built.
Wednesday’s vote concludes a long process that began earlier in the year as city officials began exploring various tax incentive options for proposed projects in the city.
As for the Sienna Hill Automotive Mall, a sales tax-based incentive zone option was presented to the city’s redevelopment agency in September. Approval has been given to go ahead in finalizing details with the automotive mall group.
Mall developers plan to use the tax incentive as a vehicle to recruit auto dealers in what is billed as a high-end, high-tech auto sales hub designed to showcase several ‘highline’ auto brands like Tesla, Bugatti, BMW, Bentley, Volvo and others in the area.
Dealers entering the mall will be under the aegis of the project’s agreement with the city and will not have to enter into their own tax incentive agreements, said Rusty Hughes, the city’s director of economic development.
Unlike similar tax incentive zones in the region which are based on property taxes, the Automotive Mall’s CRA is based on sales tax.
While much of the sales tax collected by Utah cities goes to the state and is redistributed to cities accordingly, 0.5% of the sales tax collected goes directly to cities.
The city of Washington will use half of what is produced by the auto mall as a tax incentive. The revenue will come from the city’s new point-of-sale sales taxes generated by sales generated by the automotive mall.
Incentives are also 100% proportional to the performance of the project and will be granted after completion in the form of a refundable tax credit.
The agreement between the city and the auto mall group is scheduled for a period of 10 years.
A breakdown of the numbers provided by Hughes puts the capital investment in the auto mall – or the value of the overall infrastructure to be built for the auto mall – at around $ 80 million.
“This will have property tax implications for all tax entities, including the city of Washington,” she said.
About 750 jobs are also expected to be created with an annual salary of up to $ 75,000, 204% above the county average, according to data shared by Hughes.
On the tax revenue front, over a 10-year period, property tax revenue from the Sienna Hills Auto Mall is estimated to be around $ 680,000, while tax revenue is expected to reach over $ 75 million.
Hughes previously said the auto mall could become the city’s fourth largest sales tax generator.
Wednesday’s vote to approve the deal between the city and the automotive group was unanimous and is expected to go into effect in January 2023. The reason is that the developers want to have some time to put the infrastructure in place before it starts. ‘bring potential. car dealerships.
“This will be the last step and the incentive will be in place and the next step will be building the dealerships,” said Jeremy Redd, city manager of Washington.
Copyright St. George News, SaintGeorgeUtah.com LLC, 2021, all rights reserved.
Comments are closed.