Communities Demand Action Against Inland Port Projects
Photo above courtesy of Xiangyao-Axe-Tang.
The Stop the Polluting Port coalition, which UPHE is heavily involved in, is urging the State Finance Review Commission to halt the approval of billions in tax-exempt funding for questionable inland port projects. The rush to push $100 million in tax-exempt bonds for the Tooele Valley project is just the latest example of how these developments could harm Utah’s environment and economy.
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The Utah Inland Port Authority (UIPA) backed Tooele Valley Public Infrastructure District is racing to sell $100 million in UIPA-authorized tax-exempt junk bonds by October 1, in order to fast track polluting state subsidized industrial development in Tooele County on the shores of Great Salt Lake. The interest rate on this publicly subsidized borrowing can be as high as 12-13%, resulting in the total cost of borrowing being in the hundreds of millions of dollars at a minimum.
Today a coalition of community and environmental organizations sent a letter calling on the Utah State Finance Review Commission to recommend a moratorium on Utah Inland Port Authority (UIPA) sponsored tax-exempt bonding.
Over the last 17 months, UIPA has authorized 10 new inland port project areas throughout the state, with a combined projected tax differential of over $1 billion. Each project area is expected to use the sale of UIPA authorized tax-exempt bonds to fund industrial development. Typically, these have been ‘high yield’ bonds, also known as ‘junk bonds.’ These bonds may become a liability to the local communities that inland port projects are supposed to benefit, and to government bond ratings.
The State Finance Review Commission was created by the legislature in 2022, following the first $150 million tax-exempt bond sale UIPA held in 2021 for the Salt Lake City inland port location. That bond sale has created a problem for UIPA as none of the original planned uses of that money have been implemented.
The current example of UIPA’s bonding problems is the rush by the Tooele Valley Public Infrastructure District to sell approximately $100 million in UIPA sponsored tax-exempt junk bonds to support the Tooele Valley Inland Port. Developers Zenith Bolinder LLC want to build 2.4 million square feet of warehouse space, in wetlands less than a mile from Great Salt Lake requiring 13 detention basins, a well, water storage tank and a wastewater treatment facility, this industrial development will be served by diesel truck and rail adding to pollution in an area with serious air pollution and water quality issues.
Zenith Bolinder is owned by the father and uncle of Utah State Representative Bridger Bolinder and Charles “Chuck” Akerlow of Zenith Development. Akerlow spent a year in prison after pleading guilty to six misdemeanor counts of failure to pay $620,000 in federal excise tax on diesel fuel, money that was unrecoverable because the corporation was defunct.
Public records show that Zenith Bolinder failed to pay $62,840 in Tooele County property taxes in 2023. It was also unable to get a traditional bank loan to move its project forward, so UIPA gave Zenith Bolinder a one-year loan of $4.875 million at 3.47%.
The Utah State Finance Commission needs to take action to protect the interests of Utah taxpayers, by requesting a moratorium on all tax-exempt financings by Utah Inland Port Authority (UIPA) projects until a formal financial management process can be put in place to handle the impending avalanche of UIPA-driven tax-exempt offerings.
The UIPA Board will be meeting on Thursday, September 5, at 10 a.m. to amend a development agreement for the Tooele Valley project. Community members will attempt to present community concerns at the UIPA Board meeting.