6:00 P.M. Regular Session

CITY OF OREM CITY COUNCIL MEETING February 9, 1999

6:00 P.M. REGULAR SESSION

CONDUCTING Mayor Joseph A. Nelson

ELECTED OFFICIALS Council members Joseph C. Andersen, Judy Bell, Steven L. Heinz (arrived at 6:05) p.m., David K. Palfreyman, Bill Peperone, and Mike Thompson (arrived at 6:10 p.m.)

APPOINTED STAFF Jim Reams, Paul Johnson, Stanford Sainsbury, Richard Manning, Melody Downey, and Donna Weaver

PLEDGE OF ALLEGIANCE Ned Jackson

INVOCATION Bill Peperone

PERSONAL APPEARANCES

Time was allotted for the public to express their ideas, concerns, and comments on items not on the agenda.

Mr. Heinz arrived at 6:05 p.m.

Bonnie Coombs, 1060 East 800 South, asserted that the Public Works Department wants to short change the end of the 800 South project, and she is here to protest. The original plans included leaving most of the area in its natural state. She declared that the majority of the trees have been stripped, and the beauty of her property has been removed. A seed mix is being proposed that she says is basically a "weed." She has a sample and found that it is an ugly 30-year-old mix; it was never intended for residential use. Ms. Coombs said this area requires the same beautiful landscaping that has been used for the rest of the project. Stopping at Carterville Road is a crime to those who live there and to the taxpayers who have paid for this project, expecting this entrance to the City to be attractive.

Mayor Nelson said Ms. Coombs' concerns would be looked into.

APPROVAL OF MINUTES City Council Meeting of January 12, 1999

Mr. Heinz moved to approve the January 12, 1999 minutes. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, and Mr. Peperone. The motion passed unanimously.

City Council Meeting of January 26, 1999

City Council Minutes - February 9, 1999 (p.1) Mr. Heinz moved to approve the January 26, 1999 minutes. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, and Mr. Peperone. The motion passed unanimously.

City Council Meeting of February 2, 1999

Mr. Heinz moved to approve the February 2, 1999 minutes. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, and Mr. Peperone. The motion passed unanimously.

MAYOR=S REPORT/ITEMS REFERRED BY COUNCIL Upcoming Events

The Mayor referred the Council to the upcoming events listed in the agenda packet.

Mr. Thompson arrived at 6:10 p.m.

Appointments to Boards and Commissions

Mayor Nelson recommended Jan Clark to serve on the Summerfest Committee. Mrs. Bell moved to approve the Mayor's recommendation. Mr. Thompson seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

Mayor Nelson proposed Dale Johnson, Elaine Scofield, Byron Taylor, Gary Herbert, Dick Worthen, Bill Peperone, Shiree Thurston, Duane Gardner, and Jan Clark to serve on the Lakeview Area Planning Ad Hoc Committee.

Mr. Heinz moved to approve the Mayor's proposal for members to serve on the Lakeview Area Planning Ad Hoc Committee. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

CITY MANAGER=S APPOINTMENTS

The City Manager did not have any appointments.

CONSENT ITEMS

Mr. Palfreyman moved to approve the following Consent Items. Mr. Heinz seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

SET PUBLIC HEARING - Property at 830 North 800 East - March 9, 1999 - 6:15 p.m.

City Council Minutes - February 9, 1999 (p.2) 1. Amend the Orem General Plan by changing the Land Use Designation from ALow Density Residential @ to A Professional Offices. @ 2. Amend the Zoning Ordinance by changing the zone from A R-1-8 @ to A PO. @

SET PUBLIC HEARING - Amend Section 22-5-3(A) and the Zoning Map of the City of Orem, Utah, by Changing the Zone on Certain Properties in the Vicinity of 850 South 600 East from R-1-8 To PC-2 - March 9, 1999 - 6:15 p.m.

RESOLUTION - Approving Amendments and Addenda to Mountainland Association of Governments (MAG) Interlocal Agreement.

RESOLUTION - Approving Funding Agreement with Mountainland Association Governments (MAG).

SCHEDULED ITEMS

DISCUSSION - Bonneville Shoreline Trail - Orem Connection.

George Bailey, committee chairman, explained that the Bonneville Shoreline Trail is master planned to follow the ancient Lake Bonneville shoreline. The trail is planned to extend from northern Davis County to southern Utah County. Cities along the Wasatch Front are at various stages of completing trail connections through their communities. Mr. Bailey declared that this is a very "doable" project and will not be just for hikers and joggers but for the disabled and school children as well.

Mrs. Bell noted that Stella Welsh is a member of the committee, but she just got out of the hospital and was unable to attend the meeting this evening.

Mr. Ortiz reviewed the Bonneville Shoreline Trail Plan. He indicated that it is estimated to cost approximately $126,000 and is for nonmotorized bikes and pedestrians. There may be some private funding available.

In response to a query from Mr. Heinz if there would be any equestrian use, Mr. Ortiz said there would not. Noting that the incline is pronounced in some parts, Mr. Heinz asked what the grade difference would be between the two options. Mr. Ortiz said there would probably be some areas that would require a switchback trail, especially as the trail gets closer to Lindon.

Mr. Bailey said that the trail by the water tower would be a lower impact hike, and the other trail would be for more serious hikers. Much of what will be used for the trail has already been cut for roads, and the property owners prefer the trail to stay on the roads.

Mrs. Bell commented that she thinks this project is valuable and worth doing. It would help the environment. There are some legislative bills in the works right now that might help with the funding. She commended the committee members for their hard work.

City Council Minutes - February 9, 1999 (p.3) When Mr. Palfreyman remarked that he understands each of the communities who are participating in the trail can apply for the grants, Mr. Ortiz concurred. Mr. Palfreyman recommended that this come to the Council as a budget item.

Mr. Bailey indicated that if several taxable entities apply for grants, the chances of getting funding increase. Doing one segment becomes a "blow torch" for getting other areas done. This is a beautiful system and can become a pivotal point. He stated that this seems to be the opportune time, before development encroaches into the area too much. The funding also seems to be available in abundance.

Mr. Thompson moved to postpone the public hearings to the normal flow of the meeting. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

Remarking that he has been in support of this since day one, Mayor Nelson invited comments from the public.

Chris Campbell, 111 South Eastwood Drive, said that he is familiar with the trail project in Springville, where an Eagle project was completed by working on part of it. He suggested that this trail should be advertised to Scouts. If Orem Scouts get involved, this project could be done in no time.

Pat Ursulich, 951 East 160 South, wondered how far south the trail will go and how long it would take to complete. Mr. Ortiz said it would extend as far as the Juab County line. It is anticipated to be completed by 2006, but the Orem connection should not take that long.

Mayor Nelson, reaffirming that he is in favor of the project, said it needs to go forward as quickly and prudently as possible.

Mr. Heinz asked if any land needs to be purchased, and Mr. Ortiz replied that there is some private property, so it would be necessary to obtain right-of-way. Mr. Heinz said this project should be moved upon as soon as possible.

Mayor Nelson moved to give staff direction to proceed with the Orem connection of the Bonneville Shoreline Trail. Mrs. Bell seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

6:15 P.M. PUBLIC HEARING ORDINANCE - Maria Comba - Rezone property at 890 South 500 East from R-1-8 to R-1-5.

Mr. Sainsbury reviewed with the Council a recommendation to change the zone on property at 890 South 500 East from R-1-8 to R-1-5. The applicant is requesting the rezone, because she plans to adjust the current lot line to align with an existing retaining wall. Because the new lot does not meet the R-1-8 Zone standards, the rezone would facilitate the development of a narrower lot. Moving the lot line will also solve the current problem of a structure built across a property line.

City Council Minutes - February 9, 1999 (p.4) When Mrs. Bell asked if Ms. Comba lives in the house, she replied that she does and also has an accessory apartment in her home.

Mayor Nelson opened the public hearing, but when no one came forward, he closed the public hearing.

Mr. Palfreyman moved, by ordinance, to change the zone on property at 890 South 500 East from R-1-8 to R-1-5. Mr. Thompson seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

6:15 P.M. PUBLIC HEARING ORDINANCE - Trent Roundy - Rezone Property from R-1-7.5 to R-1-5 - 296 West 400 North.

Mr. Sainsbury presented to the Council a recommendation to change the zone on property at 296 West 400 North from R-1-7.5 to R-1-5. The applicant would like to subdivide the 0.35 acres into two single-family lots. One lot has an existing house that will remain. This neighborhood has existing, multiple units on a majority of the surrounding parcels, and the Boulevard Condominiums are in the immediate vicinity. In early 1998 the parcel directly across the street on 300 West was rezoned to the R-1-5 Zone.

Mayor Nelson opened the public hearing, but no one came forward to speak, so he closed the public hearing.

Stating that this is one of the reasons the R-1-5 Zone was created, Mrs. Bell moved, by ordinance, to change the zone on property at 296 West 400 North from R-1-7.5 to R-1-5. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

6:15 P.M. PUBLIC HEARING ORDINANCE - Amend Section 22-19-1 and Appendix A of the Orem City Code by Listing Various Land Uses as Not Permitted in Residential Zones.

Mr. Sainsbury reviewed with the Council a recommendation to list the following Standard Land Use Codes as not permitted in residential zones:

$ 5912, Prescription Drugs Only $ 6155, Real Estate Operative Builders $ 6511, Physician=s Services $ 6512, Dental Services $ 6518, Chiropractors and Osteopaths $ 6519, Other Medical & Health Services, NEC.

Mr. Sainsbury noted that during the past few months the Council has discussed various types of commercial uses within residential zones. While some nonresidential-type uses are appropriate-- such as schools, churches, and group quarters--others are not. The six land uses listed above are

City Council Minutes - February 9, 1999 (p.5) currently allowed in residential zones provided the Council issues a conditional use permit for that use. The proposed change will prohibit these uses in the future.

Mr. Heinz said that he was initially opposed to making some of these uses not permitted, but since the property owners can request a rezone, he is comfortable with it.

Mrs. Bell remarked that this is an appropriate thing to do to protect the neighborhoods. She then moved, by ordinance, to list (1) 5912, Prescription Drugs Only; (2) 6155, Real Estate Operative Builders; (3) 6511, Physician=s Services; (4) 6512, Dental Services; (5) 6518, Chiropractors and Osteopaths; and (6) 6519, Other Medical & Health Services, NEC as not permitted in residential zones. Mr. Heinz seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

6:15 P.M. PUBLIC HEARING ORDINANCE - Adjusting Boundaries with Town of Vineyard.

Mr. Reams presented to the Council a recommendation to adjust the City=s boundaries with the Town of Vineyard, subject to Vineyard taking the same action as required by State law. He reminded the Council that on November 10, 1998, Orem and Vineyard entered into an agreement wherein each entity agreed to adjust their boundaries so that property Vineyard owns would be located in Vineyard and property Orem owns would be located in Orem. They also agreed to place the southern half of 400 South in Vineyard and place several properties owned by private individuals in Vineyard.

Mr. Reams continued, saying that the process for adjusting common boundaries is set forth in State law. It calls for each entity to adopt a resolution expressing its intent to adjust the boundaries, followed by a sixty-day waiting period, during which the proposed adjustment is noticed in the newspaper. At the conclusion of the sixty-day period a public hearing is held, after which the entity passes an ordinance approving the adjustment. The adjustment is effective when both entities have gone through the process and adopted an ordinance. Orem passed its resolution of intent on December 8, 1998. The sixty-day period has now passed and the required notices have been published. After public input, the Council may choose to adopt the ordinance, which by its own terms, will not become effective until Vineyard has gone through the same process and adopted a similar ordinance approving the exact same adjustments. The Council may not pass the ordinance if written protests are filed by the owners of at least 25-percent of the private property located within the areas to be adjusted.

Mr. Heinz asked if any of the land owners have protested this change, and Mr. Reams said they have not, noting that the City of Orem and the Town of Vineyard are the only property owners.

Mayor Nelson opened the public hearing, but when no one came forward to speak, he closed the public hearing.

City Council Minutes - February 9, 1999 (p.6) Mr. Palfreyman moved, by ordinance, to adjust the City=s boundaries with the Town of Vineyard, subject to Vineyard taking the same action as required by State law. Mr. Andersen seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

6:30 P.M. PUBLIC HEARING ORDINANCE - Partial Street Vacation at 680 South Palisade Drive.

Mr. Manning reviewed with the Council a recommendation to (1) partially vacate a portion of Palisade Drive in front of the property of Keith Heber on Lot 1 of Grant Subdivision located at 680 South Palisade Drive; and (2) authorize the Mayor to execute a quit-claim deed to Keith Heber for said property. Palisade Drive was planned to serve as a collector road with a right-of- way width of sixty-six feet. With the closure at 800 South, it is no longer practical to require a sixty-six-foot right-of-way for Palisade Drive. Mr. Keith Heber is in the process of developing Lot 1 of the Grant Subdivision and has requested that the difference between the sixty-six feet of right-of-way required for a collector road and the forty-six feet of right-of-way required for a local road be vacated back to him. The total amount of property to be vacated is 2,140 square feet. After vacation, this property will retain a public-utility easement on it.

Keith Heber remarked that there are two parcels of property, one of which is in a subdivision. He thought this hearing included the subdivision property. Mr. Manning said this proposal is only for the street vacation.

Mr. Heinz moved, by ordinance, to vacate the described portion of Palisade Drive and authorize the Mayor to execute a quit-claim deed to Keith Heber for said property. Mr. Thompson seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

Mr. Heinz left the meeting at 6:52 p.m.

6:30 P.M. PUBLIC HEARING RESOLUTIONS - Community Development Block Grant (CDBG)/HOME Investment Partnership Grant Citizen Advisory Commission Recommendations - CDBG Entitlement Final Statement of Projected Uses of Funds 1999-2000/HOME Proposed Uses of Funds.

Charlene Mackay presented to the Council a recommendation to adopt (1) the statements of Community Development Objectives and uses of funds for the 1999-2000 Community Development Block Grant (CDBG); and (2) HOME Investment Partnership entitlements. For the past four months, the CDBG Citizen Advisory Commission has heard funding proposals from various community applicants regarding the upcoming use of the City=s CDBG and HOME entitlements. Ms. Mackay noted that this is the first of two public hearings which have been scheduled for public input regarding the proposed uses of funds. At the conclusion of the second public hearing--which will be held on March 23 at 6:30 p.m.--the Council will adopt, by separate resolutions, the statements of community development objectives and the uses of funds

City Council Minutes - February 9, 1999 (p.7) for the 1999-2000 CDBG/HOME entitlements. She indicated that the Final Statement of Proposed Uses of Funds for 1999-2000 is available for public inspection from 8:00 a.m. to 5:00 p.m. in Room 222 of the Orem City Center, 56 North State Street.

Mr. Heinz returned to the meeting at 6:57 p.m.

Voicing appreciation for those who have served, Bob Davis--commission chairman--introduced the members of the commission. He then presented the commission's funding proposals.

COMMUNITY DEVELOPMENT BLOCK GRANT FINAL STATEMENT OF USES OF FUNDS 1999-2000

PUBLIC SERVICE PROGRAMS

Activity Recommended Requested Last Year

Family Support & Treatment Center $ 14,000 $ 25,000 $ 14,000 Family Literacy Centers, Inc. 5,000 16,000 6,500 Community Action Services 12,000 15,000 12,000 Parent Education Resource Center (PERC) 5,000 23,100 5,000 Retired Senior Volunteer Program (RSVP) 3,250 10,000 2,000 Orem City Low-Income Recreation Program 8,000 30,000 2,150 Recreation and Habilitation Services (RAH) 9,000 13,000 9,000 Fourth District Juvenile Court 4,400 5,400 4,400 Lakeridge Junior High, Special Education 4,800 4,800 4,800 Children=s Justice Center 9,000 35,000 9,000 Kids on the Move 15,500 28,000 15,500 Crisis Line of Utah County 5,000 10,000 5,000 The Gathering Place 10,000 50,000 10,000 Center for Women & Children in Crisis 8,000 20,000 8,000

Total Public Service $112,950 $285,300 $107,350

OTHER PROGRAMS

Activity Recommend Request Last Year

Orem City Building Neighborhoods Together $ 65,000 $ 65,000 $ 65,000 Food and Care Coalition of Utah Valley 15,000 15,000 0 CEDO 200,000 200,000 0 Orem City, Recreation Center: LMI Park 80,000 80,000 0 Orem City Public Works: OJHS Sidewalk 40,000 40,000 0 Curb, Gutter and Sidewalk (Overall City) 219,707 225,000 219,650 CEDO: Revolving Loan Fund 276,469 276,469 267,750 Activity Recommend Request Last Year

City Council Minutes - February 9, 1999 (p.8) Housing Rehab., Revolving Loan Fund 45,553 45,553 59,868 Administration - CDBG 180,000 180,000 180,000

Total Other Programs $1,121,729 $1,127,022 $792,268

PROGRAMS NOT RECOMMENDED

Activity Recommend Request

Orem Junior High School, Low Income Park Project $0.00 $ 42,000.00 United Way: Building Acquisition 0.00 105,000.00

Total Programs Not Recommended $0.00 $147,000.00

Mayor Nelson opened the public hearing.

Gayla Muir, Retired Senior Volunteer Program, expressed appreciation for the Council's support through funding.

Rachel McComber, Family Literacy, thanked the City Council and the commission for the service and work that has been done. She declared that the amount being proposed is a third of what was requested, and it is not enough to provide a quality program. She cited other communities with similar programs that get a substantially larger amount of funding. This program is all about helping families.

Lee Crabbe, Family Literacy, said Orem is facing an increased need in this area, and there are many people in the City who do not read on a 7th grade level. That is sad but true, and the level of funding should be reconsidered.

Mr. Davis asserted that the commission discussed this issue, but not all members agreed with the final recommendation. He, personally, would like to see more funding for Family Literacy.

Marilyn Cowley said she is a tutor in the Family Literacy program. Many youth who are in trouble are being assigned to a literacy program. Too often children are allowed to go through school without acquiring adequate reading skills; many end up in prison. That could be prevented if the needs of these young people can be met early in their lives. Ms. Cowley said she joined this program so she could make a difference in peoples' lives.

Fawn Hamm stated that this program has helped her son a great deal. She has dyslexia herself, and she slid through school. She said that she never read a book until she was 23-years-old, when she sought help to learn to read. Her oldest son has Attention Deficit Disorder and needs a one-on-one teaching environment.

Connie Aude said she is the mother of a student at Family Literacy and is also a tutor. Her 7- year-old is doing wonderfully there, and she is tutoring her own 5-year-old. It has been a lot of work, but her daughter is reading at almost a first-grade level. It has been a learning experience for her entire family.

City Council Minutes - February 9, 1999 (p.9) Mayor Nelson closed the public hearing.

Commenting that he would like to congratulate Bob Davis on his presentation, Mr. Thompson said he appreciates the remarks about Family Literacy funding. He noted this was an issue that was addressed last year, too. After looking over the different programs, he noticed that many of them help with problems that might have been lessened if the individuals had been involved in a literacy program early in life. He knows that the Mayor has looked at the literacy program and supports it. Mr. Thompson voiced concern that when he tried to find out where the program was located, no one working for the City seemed to know. He has also heard that the City is charging the people at Family Literacy a dollar per fax, which he believes is unnecessary. Mr. Thompson declared that he would like to see the funding raised to $10,000.

Mr. Heinz voiced appreciation for the presentation, noting that this is the eighth year he has seen these presentations. He understands how hard it is to listen to the many requests, knowing how limited the funding is. He agreed that Family Literacy could use more funding and indicated that there are a number of figures for which he would like to recommend changes.

Mr. Palfreyman agreed that this can be a "gut-wrenching" process to go through. When he received the packet, he did some of his own research which showed that one in eight people in the area cannot read, and he would like to see that ratio increased. He also has some recommendations for changes. Mr. Palfreyman then asked Ms. Mackay about the $180,000 administrative costs, asking for a report about those expenses.

Ms. Mackay replied that the administration costs are reprogrammed and do not carry from year to year. The Federal government stipulates that those funds cannot be used for public service projects. She noted that the administration costs will come to the Council as part of the budget process, and she would be willing to review that with the Council. She indicated that there could be some funding that is planned for the Blitz which could be freed up for use somewhere else.

Mrs. Bell remarked that there never seems to be enough money for what needs to be done. She said she cannot think of what her life would be like if she could not read, and she would also like to see more money for Family Literacy.

ORDINANCE - Authorize Mayor to Execute an Amended Agreement Related to the Opening of a Nordstrom Store in University Mall.

Mr. Reams reviewed with the Council a recommendation to authorize the Mayor to execute an amended agreement with University Mall Shopping Center. He reminded the Council that on April 29, 1998, an agreement with the University Mall was approved. In the agreement, the Woodbury agreed to remodel and expand the Mall and bring in a full-line Nordstrom store. The Woodbury Corporation has moved forward with the remodeling and is working closely with Nordstrom to begin construction of the new store in 1999 or early 2000. Because of the success in attracting Nordstrom to the Mall, many other stores are seeking an opportunity to locate at or nearby on property owned by the Mall. Recently, Mayor Nelson announced that Costco will locate at the Mall. Costco and many other businesses are interested in locating at the Mall this year. It is estimated that these new stores will generate $800,000 in sales tax revenue for the City before the opening of Nordstrom. Mr. Reams said the agreement provides that, beginning

City Council Minutes - February 9, 1999 (p.10) one year after the opening of Nordstrom, the City will contribute to the University Mall up to $975,000 a year of the sales tax increase at the Mall for twenty years. The sales tax increase is the amount of sales tax generated at the Mall over and above the amount of sales tax generated at the Mall during the Abase year.@ The Abase year@ is the year prior to Nordstrom opening. The University Mall has requested that the agreement be amended to change the Abase year@ from the year before Nordstrom opens to October 1, 1998 to September 30, 1999. In consideration for this change, the University Mall has agreed to receive one less contribution from the City for a savings to the City of $975,000.

Mr. Heinz commented that it is to the benefit of the City for Woodbury to seek out additional businesses in the Mall. He said "the dollar is well spent."

Mr. Thompson stated that he feels this is an improvement to the original agreement. Thanking Woodbury for what they have done, he said this helps out the City and helps out the Mall.

Walker Kennedy said that the City will hopefully be paying less incentive and receive more tax revenues. Through the hard work of the City and the developer, more businesses are coming than could have been anticipated.

Stating that the citizens need to know the Council is willing to support a healthy tax base, Mr. Palfreyman said this project is something to be proud of. He is grateful that this Council took a stand. It was a tough decision, but he believes it was the right one.

Mayor Nelson invited comments from the public.

Joe Ruffolo expressed some of the following: 1. He questioned if this agreement is to benefit Nordstrom or Woodbury Corporation. 2. He asked if the base-rate index is tied to the consumer-price index. 3. In the agreement, it appears that Orem is trying to buy--at $975,000 a payment--what Nordstrom's will do for Orem. 4. There is no guarantee in this amended agreement that Nordstrom will be a good neighbor and help generate more foot traffic for the "little guys" in the Mall. 5. He would like to see a well-run Mall that does what is necessary to maintain the property, increase foot traffic, and fill all the stalls. He noted that there are currently thirteen empty stalls in the Mall. He would like to see quality go into the existing agreement and see Woodbury manage better what it already has. 6. This amended agreement no longer ties the tax incentive to Nordstrom but to whatever businesses can come and go at the Mall.

Mr. Reams' response included: 1. The actual agreement is between the City of Orem and the Woodbury Corporation. The agreement requires that in order for Woodbury Corporation to receive any of the benefits of the agreement, they must attract a Nordstrom Store to the University Mall. 2. The base rate does not increase; it is just a flat base.

City Council Minutes - February 9, 1999 (p.11) 3. If Mr. Ruffolo could review the City's detailed spreadsheets, he would see that with the introduction of Costco, Nordstrom, and an additional 150,000 square feet, Woodbury's captures the increment that is being sought at the outset. Everything above that accrues to the City of Orem. 4. The Mall is already seeing additional stores--such as Costco--who are coming because Nordstrom is going to be part of the Mall. Costco will be good as another anchor but will also help generate traffic for the smaller tenants. It is a cumulative benefit. 5. The timing of the payments to Woodbury has not changed. Woodbury still receives rents from the entire Mall and has the incentive to have a good Mall. 6. The stores in the Mall have their own incentives to succeed. Some of the vacancies at the Mall are intentional in order to make room for national tenants that Nordstrom is requiring to co-locate with them.

Mayor Nelson said that as inflation goes up, so will the taxes.

Mr. Heinz said he understands what Mr. Ruffolo is saying; he had that very question. He said it was pointed out to him that the $975,000 is not indexed, so it is not fair to index the base. Orem is doing this in good faith, and Woodbury had to put a lot of money on the table as well. This has been a give-and take proposition.

Mr. Kennedy indicated that Woodbury has to expend $25 million or get a dollar-for-dollar reduction in incentives. He has no fear that this figure will be reached. Currently, projections show that Woodbury will have a $56 million investment. It is not a fair characterization to say that Woodbury is not doing anything.

Mrs. Bell declared that exciting things are happening, and she has seen much improvement. She has confidence that Woodbury will continue to make the Mall viable. She has enjoyed the process which has involved the community. Mrs. Bell said she thinks this agreement will save the City money in the long run. She believes that some of the expectations are low.

Mr. Palfreyman mentioned that with all the money being invested in this project, Woodbury has the incentive to maintain it. He noted that this agreement was achieved without increasing any property taxes. The value of the Mall will increase, and the tax money available to the schools will increase. This is something that should be commended.

Mr. Thompson moved, by ordinance, to authorize the Mayor to execute the amended agreement with University Mall Shopping Center. Mr. Palfreyman seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

COMMUNICATION ITEM

There were no comments on the Communication Item.

CITY COUNCIL NEW BUSINESS

There was no new City Council business.

City Council Minutes - February 9, 1999 (p.12) ADJOURNMENT TO CLOSED-DOOR MEETING--Property Acquisition.

Mr. Heinz moved to adjourn to a closed-door session to discuss property acquisition pursuant to Section 52-4-5(1)(a)(iv) of the Utah State Code. Mr. Andersen seconded the motion. Those voting aye: Mr. Andersen, Mrs. Bell, Mr. Heinz, Mr. Nelson, Mr. Palfreyman, Mr. Peperone, and Mr. Thompson. The motion passed unanimously.

The meeting adjourned at 8:03 p.m.

CLOSED-DOOR SESSION

A closed-door session was held at 8:10 p.m. to discuss property acquisition pursuant to Section 52-4-5(1)(a)(iv) of the Utah State Code.

Those in attendance were: Mayor Nelson, Councilmembers Andersen, Bell, Heinz, Palfreyman, Peperone, and Thompson. Staff included: Jim Reams, John Park, and Donna Weaver. The closed-door session adjourned at 9:03 p.m.

______Melody Downey, City Recorder

Approved: February 23, 1999

City Council Minutes - February 9, 1999 (p.13)