Saturday, October 31, 2009

Consultant to South Salt Lake: Don't bond for Market Station

Consultant to South Salt Lake: Don't bond for Market Station
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.

rwinters@sltrib.com
Study findings

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

SL Trib: editorial on Soren Simonsen-mentioning SH trolley

Soren Simonsen
A second term in S.L. District 7

Tribune Editorial

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 SL urged not to obtain loan

Deseret News
South S.L. urged not to obtain loan

Only $2M would be available for Market Station, study says

By Rebecca Palmer

Deseret News
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.

e-mail: rpalmer@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Tuesday, October 06, 2009

Link to "Tiger Funding" request for SH Trolley

http://www.southsaltlakecity.com/homepagemedia/Sugar%20House%20Streetcar%20TIGER%20Application%20FINAL.pdf

Developer presses South S.L. on bond

Deseret News
Developer presses South S.L. on bond

By Rebecca Palmer

Deseret News
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.

e-mail: rpalmer@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved