Saturday, October 31, 2009
Redevelopment » A smaller project could be 'very viable' in a few years, report says.
By Rosemary Winters
The Salt Lake Tribune
Salt Lake Tribune
Updated:10/30/2009 05:14:39 PM MDT
South Salt Lake shouldn't go into debt to prop up the developer of a proposed urban village near a planned streetcar line.
That's the advice of city-hired consultant David Wilcox of Market & Feasibility Advisors.
In September, Steve Aste of Z Partners asked the city to issue a $9.5 million bond to buy nine-plus acres at his Market Station site, between State and Main streets and 2100 South and 2300 South. Aste hopes to build a vibrant housing, office and retail center along the route of the proposed Sugar House streetcar.
But the land his firm pieced together faces foreclosure by America First Credit Union. The consultant reports a $9.5 million loan -- that has grown to a $10.5 million debt -- received a default notice in June. Aste asked South Salt Lake to step in before the property is lost.
"I'm not asking for anything unrealistic," Aste says, adding that he believes the consultant's report contains errors. If the city buys the land, with or without a bond, he says, "the land itself is the security."
Earlier this week, the City Council delayed a discussion on Wilcox's report and a vote on possible land purchase to its next meeting. But, as of Friday, neither item was on Wednesday's agenda.
"It appears there's some time left to do some work here that would be favorable to the city's redevelopment initiative," Wilcox told the council via phone. "This very valuable asset should be saved in some way."
Wilcox suggests the city work with America First to market the project to a new development team, which could include Z Partners. South Salt Lake has a Community Development Area at the site, allowing the city to offer up to $24.4 million in property-tax incentives to a developer to build Market Station.
Bonding for the land purchase using Redevelopment Agency funds, Wilcox reports, would produce only $1.85 million in net proceeds -- a fraction of what is needed. Plus, public ownership would mean the city would not receive property taxes for the parcel until it could be resold into private hands.
In his report, Wilcox says Aste recently scaled back the $500 million vision for Market Station, slashing condos by 30 percent and dropping office and retail space by 50 percent. The consultant sees a first phase of the revised plan -- 276 condos, 60,000 square feet of offices and 15,000 square feet of retail in four buildings -- as "potentially very viable over the next three to four years."
All the city has to do is wait for the economy to recover.
A bond, backed by Redevelopment Agency funds, likely would generate only $1.85 million in net proceeds, far short of the $9.5 million-plus needed to buy the land.
The property facing foreclosure includes 1.2 acres of former city streets and an alley that were conveyed to the developer at no cost. The city also has invested $350,000 to $500,000 in sewer upgrades for the project.
Proposed buildings of 20-plus stories likely will be scaled back to five to seven stories.
Source: Market & Feasibility Advisors report
Saturday, October 24, 2009
A second term in S.L. District 7
Salt Lake Tribune
Updated:10/23/2009 06:26:48 PM MDT
When The Tribune endorsed Soren Simonsen four years ago for a seat on the Salt Lake City Council, we liked that he was a professional planner who took the long view. We believe that the confidence voters placed in him then has been rewarded, and he deserves a second term.
Simonsen represents District 7, the southeast corner of the city, including Sugar House. He has a worthy opponent in Lisa Ramsey Adams, a personable lawyer and former private guardian ad litem who says she is a good listener and can work well with other council members. But her platform does not differ significantly from his, except perhaps her emphasis on crime, and we see no compelling reason for voters to abandon Simonsen's hard-won experience in office for a newcomer who would pursue the same or similar goals.
Besides, Simonsen's professional expertise as an architect and urban planner is valuable to the council as it wrestles with issues like Sugar House redevelopment, the proposed Sugar House trolley line, monster homes and traffic pressures.
For example, he proposes tweaking the city's demolition ordinance, which currently allows the wrecking ball to swing immediately after the Planning Commission has approved a project. He would change that to allow demolitions only after a building permit has been issued. Had such a policy been in place, several sites that now are empty lots might still have buildings on them, including the former Granite block in the heart of Sugar House that has caused such controversy. (The rezoning of the Granite block occurred before Simonsen was in office.) He also would amend current law to disallow a landscaping plan as a viable reuse.
On the monster homes issue, he does not oppose rebuilding or adding to homes so long as the result is compatible with the neighborhood. But he does support the city allowing more historic districts, which place restrictions on materials and style, where there is a strong consensus for it among residents. Simonsen is a former chairman of the Historic Landmarks Commission.
He shares many of The Tribune's progressive policy goals, including clean air (he rides a fuel-efficient scooter around the city), advancing mass transit and its related development, and building the city's trail system. He has worked with other council members to bring those goals to fruition, taking the lead on the Sugar House trolley and Parleys trail.
Simonsen says a second term would be his last. He's earned a place in the sophomore class.
Tuesday, October 20, 2009
South S.L. urged not to obtain loan
Only $2M would be available for Market Station, study says
By Rebecca Palmer
Published: Monday, Oct. 19, 2009 9:44 p.m. MDT
SOUTH SALT LAKE — A third-party study commissioned by the City Council recommends against borrowing almost $10 million on behalf of the developers of Market Station.
If the city were to push forward with bonding, only about $2 million would be available, according to the study by David Wilcox Market & Feasibility Advisors. If borrowed, the money would be used to purchase land underlying the proposed development.
"Do not issue a bond or take a loan," the 19-page report reads. "The consultant does not believe adequate amortization funds are actually available to the city or agency."
The draft report has not been released to the public but it was openly considered Oct. 14 by the South Salt Lake City Council. Since that time, the Deseret News has received a copy of the findings.
The analysis points out that South Salt Lake has already invested heavily in the project. In addition to creating a tax-increment funding zone, elected officials have pledged to spend $2.5 million for the Sugarhouse Trolley Line planned to run through Market Station's center.
The initial funding for Market Station dried up when the credit market crashed about a year ago, according to developer Steve Aste. Since then, the aging buildings and worn parking lots in the project area have been untouched.
The project is slated for 9.5 acres near Main Street and 2100 South. It has been touted as a high-rise condominium development with office and retail space that will transform the city into a hotspot. Those plans have been scaled down by about 30 percent, according to the Wilcox study.
The analysis recommends that South Salt Lake seek buyers for individual parcels that make up the project area and that it get back alleyways granted to the developer at no cost. It also proposes providing incentives for new buyers rather than spending money to purchase property, as city-owned land is not on municipal tax rolls.
Mayor Bob Gray and Council Chairman Roy Turner could not be reached Monday for comments on the report.
Meanwhile, Aste has called many of the figures in the study inaccurate. He intends to submit a line-by-line rebuttal to the council before its next meeting. Aste declined to comment on specific inaccuracies but said a timeline forecasting a possible trustees sale of the land was incorrect.
He said that irrespective of the report, council members have already made up their minds on the bonding.
Publicly, several council members have said they are undecided on whether to borrow the $10 million.
"What we're trying to do is make the project work," said Councilman Mike Rutter. "We want to do the best we can to protect ourselves and make sure this project is viable."
Aste said after last week's meeting that additional funding opportunities have opened up, easing his timeline for repaying debt.
The council will next consider the issue at its Oct. 28 meeting.
© 2009 Deseret News Publishing Company | All rights reserved
Tuesday, October 06, 2009
Developer presses South S.L. on bond
By Rebecca Palmer
Published: Monday, Oct. 5, 2009 10:31 p.m. MDT
SOUTH SALT LAKE — The City Council here has until mid-October to decide whether it will borrow $9.5 million on behalf of Market Station developer Steve Aste.
The developer has told the council that he is under financial pressure to secure funding for the proposed $500 million project between Main Street and State Street near 2100 South. But contrary to statements by city officials, the developer denies that his project is in foreclosure.
The proposed $9.5 million bonding would go toward purchase of the underlying property.
Private funding for the 16-acre mixed-use project fell away with the housing crash and resulting economic recession, Aste said.
If built, Market Station will include a 27-story condominium building, prime office space and about 18,000 feet of retail capacity. It would center around the planned Sugar House trolley line, which would connect this industrial suburb to Salt Lake City.
"Long-term, this is a great thing for the city economically and otherwise," Aste said. "We think this goes a long way to solving a lot of issues within the city."
The City Council wants to save the project, but it is waiting on an independent analysis from Market and Feasibility Advisors before it makes a decision on the $9.5 million bond.
"I don't have a lot of warm fuzzies about it," said council member Shane Siwik. "I'm optimistic that the project could eventually be a great boon for the city, but this, to me, is an absolute last resort."
If the elected officials don't approve the bond, Aste committed to move forward with the project using private money.
Meanwhile, outgoing South Salt Lake Mayor Bob Gray has held off on voicing an opinion about the bond. However, his office has been working with Aste on several different financing methods, he said.
If Market Station ultimately fails, the city is pursuing deals with other developers to revitalize the property.
One of those options is an apartment/condominium development on 6.6 acres of the Market Station land. The council has tabled proposals for a bond for that plan, waiting for a decision on the Aste proposal.
The council next plans to discuss the bond at its Oct. 14 meeting. If council members fail to decide then, a special meeting could be held in order to accommodate Aste's time line.
© 2009 Deseret News Publishing Company | All rights reserved
Thursday, September 24, 2009
By Rosemary Winters
The Salt Lake Tribune
Updated: 09/23/2009 10:05:22 PM MDT
South Salt Lake » City officials here are slowing down on a developer's request for a $9.5 million bond to speed development next to the planned Sugar House streetcar.
On Wednesday, the South Salt Lake City Council agreed to wait until an outside consultant, David Wilcox of Market & Feasibility Advisors, can study the proposal. Market Station developer Steve Aste had hoped for a decision by the end of this month.
"It's not acceptable," Aste said after the meeting. "The timelines don't work."
Aste envisions a bustling $500 million housing, shopping and office center along Main Street between 2100 South and 2300 South.
But the project has been delayed a couple of years -- Market Station celebrated a "groundbreaking" in spring 2008 but has had no major construction since then. Aste and his partners have asked the city to issue a $9.5 million bond so that the project can avoid foreclosure on nine-plus acres and buy the Skin Science building on 2100 South.
South Salt Lake Community Development Director Larry Gardner, in a memo to the City Council, said city staff is "not comfortable at this point" in recommending a bond. He noted Wilcox has, initially, expressed "skepticism" about the proposal.
The council agreed to consider the matter at its Oct. 28 meeting.
In other action, the council voted unanimously to pursue a $20,000 to $40,000 structural analysis of the four buildings
at Granite High School. The city, possibly in partnership with Salt Lake County, is interested in acquiring the shuttered, century-old campus for a community center and green space.
Wednesday, September 02, 2009
Street car proposal closer to being a reality
August 31st, 2009 @ 5:05pm
By Richard Piatt
SUGAR HOUSE -- Sugar House is far from its potential these days. A stalled project in the heart of the neighborhood has deflated morale a bit.
But At Omar's Rawtopia restaurant---one of the few places offering nothing but raw food--there is a spark of hope at word of street cars coming to the area.
"I think it's a very good idea to have public transportation to bring people here," restaurant owner Omar Abou-Ismail said.
Salt Lake City officials are using Portland, Ore., as a guide to shape the idea for Sugar House. City officials traveled there to get a firsthand look last week.
What is… the Portland Streetcar?
Portland Streetcars began running in July, 2001. Today they run on an 8-mile continuous loop averaging close to 12,000 boardings per day. The streetcars, which carry up to 140 passengers, run approximately every 12 minutes Monday through Saturday. There are 46 stops located about every 3-4 blocks. The cars are about 8 feet wide and 66 feet long (a typical light rail car is 75 to 95 feet long). They operate as single cars, never couple into trains and are not separated from traffic or given traffic-signal priority, except for certain turns. This amounts to longer travel times. Prices run from $.95 to $2.00 outside the free far zone. Construction of a second line is due to begin soon. -Portland Streetcar
Mayor Ralph Becker says it was a valuable excursion, seeing an $80 million investment that has sparked $3 billion worth of development. He says he's glad he saw it in person.
"There's a reality that you get that is much different than you would get if you were reading it in a report," Becker said.
In Salt Lake City, the street car line would run from the TRAX station at 2100 South, east to Sugar House. The alignment is around 2225 South, near Sugarmont Avenue, and would end at Highland Avenue.
To pay for it, Salt Lake City is pushing for federal stimulus grants and to create a public-private partnership. The total cost would be between $45 million and $50 million, but the payoff could bring something greater.
"The city is making an important infrastructure development that's going to spur returns on that investment," Becker said.
"After the buildings are built and the stores are up and running, it could be back to normal; and the tracks could help bring Sugar House back to life," Abou-Ismail said.
If the city is able to get the funding together, construction could begin next year and cars could be running as soon as 2012.
Saturday, August 29, 2009
Salt Lake leaders sold on Portland streetcar system
By Aaron Falk
After a day of riding the streetcar line in Portland, Ore., Philip Blomquist was sold.
The Salt Lake retailer owns two bike shops near a planned streetcar line in Sugar House, and if the Oregon model gives any indication, business could boom.
"I would never have believed it if I hadn't seen it firsthand," Blomquist said after a day of touring Portland's Pearl District. "You would be amazed how it has revitalized this part of the city."
Blomquist was one of a handful of Salt Lake retailers, developers and city officials to tour the streetcar line and meet with their Portland counterparts Friday.
As Salt Lake leaders work on funding the $46 million project, drumming up support of business owners and developers along the line is equally critical in the city's success, said redevelopment agency director D.J. Baxter.
In Portland, officials have turned a $55 million, 2 1/2-mile stretch of track into $3.5 billion in private investment over the past eight years, Baxter said.
Those numbers aside, the before-and-after pictures of Portland's Pearl District had Blomquist and others hopeful about what a similar line could mean for them.
"It's opened our eyes and given us hope for the future," he said.
The planned line would run from the 2100 South TRAX station to the old Granite Furniture building in Sugar House.
The slow-moving streetcar would stop more frequently than a TRAX train, increasing foot traffic to stores along the line, Baxter said.
Right now, city leaders are hoping to land a $35 million slice of the federal stimulus package to help pay for the Sugar House line. If they are successful in grabbing that money, the line could be up and running by early 2012.
For Craig Mecham, the sooner the better.
Mecham, who owns the vacant lot at the corner of Highland and 2100 South, said he believes the streetcar line would mean more shoppers and better transit for the businesses and residents he hopes will one day occupy a mixed-use development there. But faced with a slumping economy, Mecham's project has stalled.
"Our project right now, like others, is on hold," he said. "We're waiting to see the whites of their eyes in terms of the economy. We don't see that yet. But we think (the streetcar) will certainly speed up the process."