After a 2 1/2 -year saga - neighboring merchants threatened lawsuits and neighbors bemoaned the "death" of Sugar House - a development that forever will transform one of the capital's iconic neighborhoods has won unanimous approval.

With little of the drama that defined the Granite Block controversy, the Salt Lake City Planning Commission on Wednesday green-lighted developer Craig Mecham's vision for the southwest corner of 2100 South and Highland Drive.

As soon as this fall - but more likely next spring - construction crews could begin erecting a side-by-side seven-story office building and eight-story condo tower over the 4 1/2 -acre crater, along with street level shops and three levels of underground parking for nearly 500 vehicles.

"Time to get out the golden shovel," project architect John Hammond told Mecham moments after the vote. "It's like springtime."

Mecham, both vilified and praised in public hearings since last year, remained cool, striding down a City Hall hallway.

"I feel relieved," the property owner said. "We still have a lot of hurdles to go over, but I'm encouraged."

Indeed, the commission attached a series of conditions ranging from measures to mitigate traffic and ensuring walkability to a certification in energy efficiency.

What's more, Mecham acknowledged he has yet to secure financing.

"We'll work on that," he said. "We've had some encouraging signs."

Despite the economic downturn, Mecham reports a serious interest from merchants and a "surprising" interest in the planned condos.

He also struck a conciliatory tone, conceding his plan uprooted a popular strip of small business that included boutiques, a record store and coffee shop.

"I know this has been a hardship on them. For that, I apologize," he said. "But this project will put Sugar House back on the map."

Up to 16 new commercial tenants could share 37,000 square feet of retail space. The 105-foot office building would border a 99-foot residential tower with 57 units. The blueprint also calls for outdoor seating and dining, a courtyard and lush landscaping.

An adjacent project - Red Mountain Retail Group has proposed a multi-use development to the south that includes the Granite Furniture structure and buildings along McClelland Street - was not considered Wednesday.

Mecham, who produced his own traffic study, announced his building plan has been reduced 10 percent, retail 15 percent, to cut cars off the surrounding streets. But congestion concerns remain, including back-up at the 2100 South intersection that planners described as a "chain reaction."

Commission members also chastised staff for a vague traffic study that failed to offer direct solutions.

"Our goal is to keep the roads functioning and then do what we can," said a somewhat defensive Kevin Young, the city's transportation planning engineer. "But it's a difficult challenge."

The commission called for a traffic update in the area in one year.

Approval comes nearly 11 months after Mecham unveiled his initial plan before the Planning Commission. A demolition permit was issued last December under a condition - critics called it a loophole - that Mecham agree to landscape the lot if construction had not begun by April 30.

Buildings came down in January, except for a chunk of Blue Boutique, which shared a western wall with a gallery owned by Rockwood Investment Associates.

In the ensuing stalemate, Mecham asked for multiple extensions this spring and summer, but Mayor Ralph Becker refused to budge. Just before the Fourth of July holiday, Mecham complied by partially filling the crater, landscaping the perimeter and placing green mesh on the fence.

Wednesday's motion was made by Commissioner Mary Woodhead and seconded by Babs De Lay.

djensen@sltrib.com