General Obligation bonds (GO Bonds) are municipal bonds that provide a way for governments to raise money for projects that may not directly generate revenue, such as public spaces (parks, plazas, trails, etc.), street improvements, and construction of community facilities (city halls, recreation centers, schools, etc.). Because they are backed by the government's ability to tax and raise taxes, GO Bonds typically offer the lowest possible interest rates for funding these types of public capital projects. They are also required to be voted on by the general public during annual elections.

If approved, the GO Bond will provide upfront funding to assist in the costs of the public open spaces and plazas, public infrastructure (pedestrian improvements, roadways, utilities, grading, etc.), and public parking. It will also be used to pay off the existing, higher-interest loan used to purchase the property - saving the City an estimated $1.1 million annually in General Fund expenditures.

The proposed Town Center is a mixed-use project on 10 acres located on the corner of 2300 East and Fort Union Blvd. The project includes a central open space plaza and courtyards, retail, dining, community amenities, and limited residential.

If Cottonwood Heights residents approve the Town Center bond, the city portion of property taxes for a median-priced home ($770,100 in Cottonwood Heights) will increase by approximately $11.43 per month or about $137.16 annually for the life of the Bond (up to 30 years). A business or secondary residence of the same value would see an estimated increase of $226.98 per year.

Below is a chart showing the estimated property tax increase for homes of different values.

Residential Property Tax Impact

Commercial Property Tax Impact

The City uses funding from its General Fund budget to support numerous city projects and costs; however, the upfront cost needed to fund the community-focused elements proposed in the Town Center are higher than the amount typically available in the General Fund at any given time.

A GO Bond can provide the city with this upfront investment to move forward with the project within the necessary timeframe and at the lowest possible cost. Like a home mortgage, GO Bonds spread out the payments over time and allow current and future residents to share the benefits and cost of the project.

The proposed amount for the GO Bond is $30 million for up to 30 years. These are maximums, and if approved, the city could issue bonds for a lower amount and for a lower term, but cannot exceed these amounts.

Two concepts for the town center are presented to show residents variations of a concept that achieve the same result. The final design and the final project are anticipated to implement this vision, possibly with elements presented in both concepts based on resident feedback and feasibility. Both concepts have the same amenities, open space/plaza area, building sizes and densities, and parking.

If approved, the Bond will have several positive financial implications for the City:

- It will allow the City to pay off the existing loan used to purchase the property - saving the City $1.1 million annually in general fund expenditures and opening up that funding for other city needs/projects.

- By retaining ownership of the property, the City can generate new revenue from land leases to a development partner, approximately $2 million a year after project completion, as well as new sales and property taxes from the site.

These financial benefits will help delay the City's need for property tax increase in the near future.

The City's preferred option for funding the project is a public-private partnership as it provides the most balanced approach. If voters don't approve the Bond, the City will need to reevaluate development options for the property. Other options include:

- Pursuing a market-driven design that would need more commercial and residential development to be financially feasible. This would likely result in less open space and a more dense project.

- Sell the property as is and allow the City's current development ordinances to guide development like any other city project. This would reduce the level of control/influence that the City has over the project and open the project up for continued use as a strip mall.

- Rezone the property to establish general parameters for its development and then sell. This would reduce the level of control/influence that the City has over the project.

If voters approve the Bond, the City plans to begin vetting development partners that can help implement the city's vision for the town center and intend to begin construction as soon as possible.

Bond funding typically has the lowest interest rate of city funding mechanisms. By using funds from the Bond to pay off the existing loan, the City will save roughly $1.1 million a year in the General Fund (the City's primary budget that funds essential services and long-term projects).

A public-private partnership provides the most balanced approach - maintaining city control to ensure a community-focused design emphasizing public open space while incorporating the commercial and housing needed to make it financially sustainable and activate the area.

A public-private funding solution will enable Cottonwood Heights to maintain ownership of the property and lead the vision and design of the project - giving us control of elements like density, aesthetics, and building height. We would retain ownership of the land and lease it to a selected development partner who would build out the revenue-driven elements (retail, dining, housing, etc.). This land lease will also create a long-term revenue source for the City that will delay needed property tax increases in the future.

No. If the Bond is approved, the City plans to begin vetting development partners and intends to start construction as soon as possible.

The city's goal with the new Town Center is to design and build it with the community as the priority. In addition to bringing in new sales tax and property tax revenue, the project will enable the City to bring features and amenities that the community desires, such as public open spaces for a variety of new city events, including farmer's markets, holiday fairs, movies in the park, and small community concerts. It will also offer more options for locally focused dining and shopping within the City.

Cottonwood Heights' property taxes are among the lowest in Salt Lake County. The City is ranked the 4th lowest of the County's 16 municipalities and has only raised property taxes one time (in 2018) since incorporation.

Cottonwood Heights has only raised property taxes one time since incorporation. Property taxes were increased through a Truth in Taxation process in 2018.

The Town Center bond will appear on the 2024 election ballot, which will be mailed out to residents on or near October 15. Please see Elections | Salt Lake County Clerk (slco.org) for more information about elections and voting in Salt Lake County.

The bond will not directly impact renters, however, it would impact property owners/landlords who may choose to pass the cost of the increase onto renters.

The city has never proposed or issued a General Obligation bond, although it has issued sales tax bonds on several occasions.

To ensure that the town center includes public, community-driven elements, the bond funds would be used to provide an upfront investment to help cover the cost of public improvements to the site. This public investment will assist with the costs of public open space, pedestrian improvements and infrastructure, and public parking. These types of desirable public amenities are not typically seen in private developments that are privately funded and purely market driven. The city will then partner with a private development group, via a public-private partnership, and that developer (in partnership with the city) will fund, develop, and manage the market-driven elements for the project, including a mix of retail businesses, local restaurants, and possibly housing. These are critical pieces that make the town center vibrant and active and represent a total estimated investment of more than $100 million.

While the private development market fluctuates and is not entirely predictable, the city has consulted with real estate brokers and development professionals to ensure that there is market demand and support for the town center project and has received very positive feedback. Further, even if approved via the election, the full $30 million in bonds is not automatically issued immediately, and the city may issue those bonds in multiple phases. It is the city’s intention to ensure that an agreement with a private development partner is in place before issuing the portion of bonds that will pay for public improvements on the site, ensuring that the project is constructed in a timely manner and that any risk due to construction and market factors is mitigated.