News | Office Space: Private development at Hill Air Force Base could dwarf Downtown Rising 

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While Salt Lake City officials were wringing their hands over a sky bridge for the LDS Church’s City Creek development, an office park 25 times as large was being readied up the road in Davis County with little public debate.

The first phase of the 25-year project is set to bring 20,000 jobs. When finished, the private office park, dubbed Falcon Hill, could add a total of 60,000 jobs to bedroom communities in Davis and Weber counties. The first phase alone will add the equivalent of all the office space currently available in Salt Lake City.

Planned hotels and offices slated to run for 4-miles along Interstate 15 frontage are to be constructed partly on contaminated ground. The property beneath the buildings stretching from Clearfield to Riverdale is exempt from taxes. Neither state, nor county, nor city governments have an official say in the development.

The usual rules don’t apply because the office park is being built on Hill Air Force Base, part of a Bush administration initiative to help pay for the armed forces by leasing little-used parts of military bases to the private sector. Similar projects are taking place throughout the country, but the Hill privatization is the largest ever attempted.

“It’s potentially a huge development,” says Wilf Sommerkorn, director of community and economic development for Davis County, where the development blueprint for years has called for adding local jobs to keep residents from driving to Salt Lake City. “This is exactly what we were hoping for,” he says.

All politicians in Davis and Weber counties are signed on, as is Utah’s Legislature. But Salt Lake City business leaders are just now receiving briefings on the project. And a local watchdog group is urging caution.

Steve Erickson of Citizens Education Project read about Falcon Hill in a small public notice in the newspaper. When he requested the Air Force’s environmental assessment and discovered the project’s massive scale, he couldn’t believe there hadn’t been more debate.

In its April project assessment, the Air Force wrote the I-15 frontage development would have “no significant impact” and, therefore, did not need a full-fledged environmental study before construction.

“This is going to have significant impact and they are treating it as a simple matter of filing a notice. Where is the public involvement?” Erickson asks. “It smells like an insider deal.”

The state of Utah is quietly readying to pump $50 million of tax dollars into the development. Hill officials say they have tentative commitments from state transportation officials for a new freeway interchange and TRAX extensions.

The Hill project was awarded last summer to a consortium of three companies, including Salt Lake City’s Woodbury Corporation. If final negotiations are successful, the group will lease around 500 acres of Hill for 50 years. In exchange for the land, the development group will cut the Air Force in on a percentage of office park rent, worth an estimated $150 million to the Air Force, says Bruce Evans, manager of the Hill office that’s overseeing the development. That money will first be used to construct new on-base military buildings to replace aging Hill structures.

Hill has a backlog of more than $300 million of unfunded base needs, Evans says. “If we went to Congress and said, ‘Build us these buildings,’ they would never approve it. The budget is so thin.”

When a similar privatization project was proposed in Los Angeles, Sen. Dianne Feinstein, D-Calif., moved to block it, charging the lease deal was a first step toward selling land intended to benefit veterans. But Utah’s politicians see the Hill privatization as a boon, not only for local economies but for the base.

The state hopes the project will secure Hill against future rounds of congressionally mandated base closing. The Utah Legislature has already kicked in $5 million of seed money. Evans says Utah has pleged up to $20 million more. Additional state help could come through the Military Installation Development Authority, an agency created by the Legislature last year with the power to tap taxes coming off the Hill research park and pump money back into the project. As much as $25 million of such tax funding may go to the project.

Development plans remain sketchy: two hotels, lots of office space and some retail for new workers. The project is being dubbed an aerospace research park marketed to defense contractors.

Stuart Adams, chairman of Utah’s Military Installation Development Authority, says the hope is the research park will attract out-of-state military contractors, bringing new jobs to Utah and increasing Hill’s national importance.

Hill’s Evans says the Air Force is going out of its way to include state and local planners, despite the fact that state and federal law exempt the base from local zoning. “We recognize this has a significant impact to the state for all kinds of things, from transportation to utilities to the housing market,” he says.

The plan is to lump four neighboring cities and two counties together for a development review process that will mimic typical city and county permitting activities, Evans says. Contaminated area groundwater on construction sites shouldn’t be a problem since pollution is deep underground, he says. But to be safe Hill has alerted environmental regulators it may need urgent clean-up funds if construction hits something surprising.

Still, with construction slated to begin in fall, many questions remain unanswered. Which city will provide water, sewer or police services? How, exactly, will local governments tax businesses on federal property? The state’s Military Installation Development Authority is hashing together agreements between the cities to find answers, Adams says, but negotiations are a long way from completion.

But Adams is upbeat on Falcon Hill’s potential to create jobs and even alleviate freeway congestion. Currently half of Davis County drives into Salt Lake City for work, he notes.

“This may be one of the biggest economic development sites in the multistate region,” Adams says. “If it’s big enough, you could have people living in the Avenues commute to Hill and reverse the flow of the freeway.”

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