Inland Port wins, Salt Lake City loses in Supreme Court decision

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After more than a year of deliberations, the Utah Supreme Court on Wednesday issued a ruling on whether the inner port is unconstitutional and illegally siphons off a portion of Salt Lake City’s revenue.

In short, the answer is no.

The judges determined that forming the port did not violate Utah law and dismissed the city’s financial claims, although they left the tax revenue issue for further debate.

The Utah Legislature formed the Inner Harbor in 2018, taking advantage of a growing international airport, a Union Pacific rail hub, and the relocation of the Utah State Prison – and its supporting infrastructure – all close at hand. The port area covers approximately 16,000 acres. It includes parts of West Valley City and Magna, but the vast majority is in Salt Lake City’s northwest quadrant, occupying about one-fifth of the capital’s landmass.

Lawmakers required the three affected municipalities to allow zoning for the port to operate within their boundaries. They demanded that cities allow transportation and storage of “natural resources” – which some have interpreted to mean coal mined from Utah – on port lands. They also allowed the Port Authority of Utah, formed to manage the development of the facility, a portion of the property, sales, and use taxes that cities would have collected in the port area.

What SLC supported

Salt Lake City sued the Utah Inland Port Authority and the state in 2019. The lawsuit alleged that the establishment of the port violated the Utah Constitution in two ways:

• First, it treated the three affected municipalities differently from other cities in the state, violating, according to Salt Lake City, the Uniform Application of Laws clause.

• Second, the city claimed the Inner Harbor violated the constitution’s “Ripper Clause,” which prohibits lawmakers from directing a city’s money, taxing authority, or property. towards a “special commission, a private company or an association”.

A 3rd District judge dismissed the lawsuit in January 2020, and Salt Lake City appealed to the state high court, which heard oral arguments in the case in April 2021.

In their 13-page opinion released Wednesday, the five justices sided with the district court on the constitutionality of the inner port.

While the port’s formation “clearly” created disparate treatment for three cities, Salt Lake City attorneys failed to demonstrate that the port’s zoning requirements “were not rationally connected to a legitimate legislative purpose. “said Associate Chief Justice Thomas Rex Lee. wrote. As such, there was no breach of the uniform application of laws clause.

“The economic studies underlying [port’s creation] predicted that an inland port could create thousands of jobs, expand natural resource extraction industries, and make Utah a bigger player in the global economy,” wrote Lee, who will retire from the court. Thursday. “These are legitimate goals.”

As for the Ripper Clause, the justices determined that lawmakers had not delegated land use or zoning powers to the Port Authority and dismissed the city’s claims.

“Here, the legislator does not ‘entrust’ [the port authority] with the task or responsibility of enacting certain zoning ordinances,” Lee wrote. “[It] requires Salt Lake City, West Valley City and Magna to “allow” an inland port.

Some tax issues remain

Earlier this year, the Utah Legislature negotiated Inner Harbor reforms with Salt Lake City, which included a restructured board of directors and greater control for the city over property tax revenue generated by the ‘company.

Below HB443, the city has pledged to donate 65% of its property tax revenue from the port, a figure that is decreasing over time. In return, the port authority is required to invest a significant portion of these revenues in environmental controls, traffic mitigation and job creation.

As such, the Supreme Court considered whether the city’s complaints about its taxing authority were moot. He ordered the parties to submit additional briefing notes explaining whether they believed that to be the case.

Read the full review below:

The Port Authority released a brief statement hours after the court’s opinion was made public, noting that it was “satisfied” with the outcome.

“[The Utah Inland Port Authority] is committed to securing Utah’s link in the global supply chain,” the statement reads, “by modernizing logistics to protect Utah’s natural beauty and reduce risk, and improve quality of life. improving the livability of the community.

Salt Lake City Mayor Erin Mendenhall and the City Council released a joint statement calling the court’s decision “deeply disappointing.”

“The legislature should not be allowed to unilaterally change municipal land uses it disagrees with or redirect tax revenues that belong to cities,” they said. “The purpose of the Salt Lake City litigation was to emphasize the unique authority of Utah cities to directly address the needs of local voters.”

The city will continue to negotiate with the Port Authority to mitigate the impacts of its development, the statement said. City officials are also considering their next steps and how to respond to court-ordered briefings on the mootness of their tax revenue claim.

They have until August 12 to file their case, confirmed a spokesperson for the mayor.

Harbor haters say keep fighting

Deeda Seed, with the Stop polluting port coalition and which has long opposed the project due to concerns about environmental and community impacts, urged Salt Lake City to continue exploring its legal options.

“We disagree with the opinion,” Seed said, “and urge the city to continue to push back against the idea that the tax revenue issue is moot. It is not.

She pointed to recent reports that revealed untendered contracts to build the port’s smart hub network and its multimillion-dollar transshipment facility, as well as the port authority’s opaque budget.

“The public doesn’t have information on how that tax revenue is spent,” Seed said. “It is not clear that the contract negotiations will result in a satisfactory resolution of the issues that concern the people of our city.”


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