After the master development agreement was finalized, the city council unanimously approved a commercial business development called the Commons at Herriman Towne Center at in December. 

The development will be located along the west side of Mountain View Corridor and the north side of 13400 South and will feature a variety of businesses, including restaurants, a bank or credit union, apartments, a big box store anchor and other retail stores. An average of 1.25 parking stalls per residential unit is planned.

“The Commons [is a project] we’re grateful and excited for,” City Communications Manager Jon LaFollette said.

Patrons will access the commercial space from Herriman Rose Blvd., Fort Herriman Parkway and 13400 South.

The developer, Elevated Acquisitions, anticipates the first businesses will open by the end of next year. The total area for the Commons at Herriman Towne Center will be approximately 32 acres.

Herriman is providing an incentive package to the developer to entice desirable businesses and to bolster the project in general. The total package value may not exceed $36,900,466 and expires in 2035, whichever comes first. It will use three methods: a sales tax incentive, credits to offset development fees and tax-increment financing. 

“The council and developer… agreed to property tax and sales tax incentives… These incentives are designed to enable the project to proceed immediately and attract high-value commercial tenants,” Director of Community Development Blake Thomas said. “These funds… allow expedited development… It enables the developer to seek and negotiate with highly desirable tenants, enticing them to come to Herriman.”

Sales Tax Incentive

Generally, Herriman receives 0.5% of the 7.25% sales tax charged on purchases within the city. As part of the incentive package, however, the city will allow the Commons to keep half of the 0.5% until the total value of the incentive package is reached.

“The only thing the city has to really bargain with is the thing that we want most, which is sales tax,” City Councilman Jared Henderson said. 

Offset of Development Fees

When any new developments are built, developers pay impact fees to cities to compensate for infrastructure, utility and service costs, including water, roads, parks, storm drains, fire and police. 

“For this commercial project, the city will not collect impact fees for transportation, water, storm drainage and parks,” LaFollette said. “Instead, the amount that would have been collected will be credited toward the overall incentive amount. The city will still collect impact fees for fire and police services.”

Tax-Increment Financing 

Tax-increment financing reallocates future property tax revenue from a specific geographical area toward funding infrastructure improvements or incentivizing development. 

This method of financing requires an interlocal agreement, which is an arrangement between government entities enabling them to collaborate and coordinate on projects to benefit the public, including managing common resources and sharing responsibilities.

“In the case of the Commons at Herriman Towne Center, the interlocal agreements involve the various taxing entities,” LaFollette said.

Under the tax-increment financing agreement, a percentage of the property tax revenue that normally would have been paid to civic taxing entities, such as Herriman City, Salt Lake County and Jordan School District, will instead be paid toward infrastructure within the geographical area called the Herriman Towne Center Community Development and Renewal Area. This area was created in 2010 to help subsidize infrastructure construction surrounding the Towne Center. 

These funds will reimburse Elevations for infrastructure projects, including improvements to 13400 South and 13200 South. 

“A key perk was the construction of median landscaping on 13200 South, which was just finished,” Thomas said in December. The signal at 13400 South and Mountain View Corridor will allow a three-quarter intersection at the entrance to the site, and patrons will be able to turn left and right into the area.

“[Taxing entities] agree to redirect a portion of property tax revenue within the Herriman Towne Center [project] to fund infrastructure improvements or provide incentives for the project,” LaFollette said. “This collaboration helps the project move forward while still benefiting all participating entities in the long term through increased economic activity.”

“When this was put in place years ago, the city had to get those major property tax entities, mainly the school district and Salt Lake County, to agree to give up their portion of that property tax to give to the businesses coming in to help put in the roads, the water, the sewer, etc.,” Thomas said. “The Commons project will increase the amount of tax increment revenue coming into the city substantially by raising property values in that area.” 

These three arrangements will be in effect until the total incentive ceiling is reached, at which point all incentives will end, and standard taxes and fees will then apply to the project. “Though [this is] not Herriman City’s [project], we’re grateful for… Elevated Property Company’s partnership and cooperation,” LaFollette said. “[This is] greatly needed in our community.” λ