The young city of Millcreek has sought help from state lawmakers in its bid to carve Brickyard Plaza shopping center out of Salt Lake City and annex it into its own boundaries, a move that has derailed talks between the neighboring cities.

HB262, sponsored by Rep. Val Potter, R-North Logan, ratchets up the ongoing border dispute between Utah’s capital city and its neighbor to the south, which incorporated as a city in 2017. Leaders for Millcreek have pressed Salt Lake City since May to consider letting them annex the 23-acre center located at about 1100 East and 3000 South, saying the move will help with planning the community’s future.

Salt Lake City is opposed to the idea, with its elected leaders making clear in at least two recent meetings with Millcreek that any boundary adjustment would have to come with no net loss in tax revenues. Officials estimate Brickyard currently generates between $3 million and $4 million in sales taxes per year.

Now, those city-to-city discussions are on hold, according to Charlie Luke, chairman of the Salt Lake City Council, who said the new legislative proposal amounts to a threat to skew the outcome of any boundary talks in Millcreek’s favor.

“It’s impossible to have a real negotiation if one of the parties is under stress — and that’s exactly what this is,” Luke said. “Now that the bill is public, the threat is even more real than it was before."

And in a recent letter to Millcreek’s elected leaders, Luke wrote that “state politics should not interfere with these municipal land use decisions.”

HB262, introduced Monday, would create a new process for property owners who live in the area to petition for “transferring a substantially isolated peninsula” from one municipality to another under certain conditions — even if the city giving up the land does not consent. Current law, instead, provides for boundary adjustments initiated by citizens typically when bordering cities agree.

(Christopher Cherrington | The Salt Lake Tribune)

While not mentioning any municipality directly, the bill, which has yet to be assigned to a committee, appears to be carefully crafted to apply to the Brickyard situation by defining a “substantially isolated peninsula” as being surrounded on 95 percent of its border by another municipality, as is the case with the shopping center.

Potter said that as a former elected official in North Logan, he was familiar with municipal border issues and the problems they can create for residents.

“I really don’t like these kind of cut-out areas, with part of one city inside another city,” Potter said. The lawmaker said he did not mean for HB262 to be “a heavy weight hanging over these two cities,” but he acknowledged the bill was intended as “a last resort” should Millcreek and Salt Lake City be unable to resolve their differences in the coming months.

“I hope both cities will work out what’s best for the residents and businesses in that area,” Potter said.

Brickyard has been part of Utah’s capital since 1979, when it was legally annexed into Salt Lake City from unincorporated Salt Lake County as part of a deal to deliver water to the retail site. Millcreek’s leaders, meanwhile, are close to adopting a new general plan, a process they said in May has provided “a fresh opportunity to look at boundaries with neighboring municipalities.”

Among other things, the 124-page planning document envisions pushing portions of Millcreek’s border northward to 2700 South and annexing Brickyard, Tanner Park, Parleys Historic Nature Park, a roundabout at 2300 East near 2700 South and a host of residential properties — all of which are legally within Salt Lake City’s boundaries today.

The draft plan also calls for Millcreek to annex portions of Murray and unincorporated Salt Lake County.

Millcreek Mayor Jeff Silvestrini said that while Millcreek City Council was likely scale back some of those annexation proposals before the general plan is approved, Brickyard was considered crucial. He said that although legal at the time, the shopping center’s original annexation was recognized “as a tax-revenue grab, one that continues to resonate with residents of Millcreek.”

Getting control of Brickyard and particularly a piece of land east of 1300 East and Highland Drive between Miller and Woodland Avenues was key to ongoing planning of a new commercial center and community gateway for the city, the mayor said. Transferring the property, Silvestrini said, would promote “self-determination” for the area’s property owners and reduce “jurisdictional confusion” while also addressing imbalances on providing fire and police services and road maintenance in parts of that neighborhood.

Silvestrini said Salt Lake City had not taken Millcreek’s annexation request seriously until the prospect of changing state law surfaced.

“Frankly, they really left us in a situation that we had to do something like this to get them to engage with us,” said Silvestrini, who added Millcreek would seek to have HB262 withdrawn if Salt Lake City signaled it was ready to debate the Brickyard request in earnest.

Luke and other Salt Lake City officials counter that they have been willing to collaborate, but, as elected officials, they also have an obligation to stick up for their own voters and taxpayers. The land and residents in the Brickyard area are “an integral and indispensable part of the capital city,” Luke wrote in his letter to Millcreek.

“We’re still willing to come to the table and work for a mutual solution,” Luke wrote in the letter, posted on the City Council’s Facebook page a week ago, but “we cannot do so under threat of State legislation.”

The proposed boundary adjustments “are not equitable,” Luke wrote, noting that one of Millcreek’s “more aggressive” border requests — moving part of its northern boundary to 2700 South — even threatened to cut Salt Lake City Council Member Amy Fowler out of Salt Lake City.

Fowler, who was part of a delegation that met with Silvestrini and Millcreek City Councilwoman Bev Uipi last week to discuss the issue, said the cities appeared to have “a constructive conversation” about collaborating on planning, zoning and transportation issues for lands along their shared border.

Folwer said she and Luke asked Millcreek to take the specter of legislation “off the table so that we could continue talking as good neighbors” and urged the Millcreek City Council to remove portions from its draft general plan that call for annexing Salt Lake City land.

But that dialogue has changed, she said, now that HB262 has gone public.