Union Gardens
REDEVELOPMENT PROJECT AREA #5 UNION GARDENS
The Union Gardens Redevelopment Project Area was established in October 1981
and covers 7.15 acres. This Area was established to facilitate the development
of low-income housing for the disabled and elderly at 3rd Street and Adams Avenue.
To help the Union Gardens project, the RDA borrowed $147,449.65 of CDBG monies
from Ogden City. With this loan, the City also assessed an overhead and administration
charge of $21,867.45. Both debts were structured to accrue interest at the City's
interfund interest rate. The RDA in turn provided this money to the developer,
Northern Utah Labor Council Housing Corporation (NULCHC) to assist with site
preparation and other development costs of their housing project. It was intended
that the City debts be repaid from future years' tax increment.
Although tax increment was collected from the Union Gardens Area in 1983 and
1984, in 1986 the Weber County Board of Equalization granted Union Gardens tax
exempt status, retroactive to 1985. This action followed a 1985 Utah Supreme
Court ruling which exempted nonprofit housing projects from paying property
taxes. When the RDA challenged the tax exempt status, NULCHC maintained it did
not realize the exemption of Union Gardens would affect the amount of tax increment
that would be available to repay the CDBG loan. They further maintained that
Union Garden's taxable status was never a condition for receiving the RDA's
help.
The RDA agreed to this. In connection with this settlement, the City also agreed
to cease accruing interest on its loan to the RDA, so that the reduced amount
of tax increment available in the Area could eventually amortize the debt. The
O & A fee owed to Ogden City was paid off at this time.
In 1994 the Episcopal Management Corporation acquired the project. |