When the Amazon Fulfillment Center on 5600 West opened in 2019, it seemed like a good thing. Jobs were created, and it appeared it would be a boon to the economy. However, big-box stores like Amazon take up a large amount of land and require big public infrastructure investments, including roads.
In comparison to a downtown Salt Lake City structure like the Newhouse Building, big-box stores pay far fewer taxes per acre, and thus yield less revenue per acre.
According to Joshua Nielson, Assistant Director of the Utah State Tax Commission/Property Tax Division, “Each property is assessed by the County Assessor’s Office on what they think the fair market value of that property would be. Each property in a tax area has the same tax rate applied to it. So, you would take the assessed value and multiply that by the tax rate to figure out the ‘tax revenue’ that the property provides to the various entities in that tax area.”
With the help of Preston Taylor, a Modeling and Statistical Manager and Certified Appraiser of the Salt Lake County Assessor’s Office, we find the following:
“The Amazon Fulfillment Center property tax was $2,272,028.55 for 2021. For 2022 the property tax will amount to $2,219,956.23 if all tax increases are approved. If not, the property tax will be $2,051,199.95. The revenue per acre for 2021 is $32,377 (tax/70.25 acres).”
“The Newhouse Building property tax for 2021 was $285,434.75. For 2022, the property tax will amount to $264,479.75 if all tax increases are approved. If not, the property tax will be $244,374.57. The “revenue per acre” for 2021 is $951,449 (tax/0.3 acres).”
For decades, most metropolitan areas have based their development around easy access to cars. This is, in part, not only responsible for urban sprawl, but also increases infrastructure costs.
It is clear that downtown businesses and homes disproportionately subsidize businesses and homes spreading out farther and farther from the city center.
Are we forsaking downtown Salt Lake City, a good source of city revenue, for the convenience of big-box stores and urban sprawl? Apparently so.