Salt Lake City is angling to buy the vacant Rio Grande Hotel, a move that could provide 49 pet-friendly units if officials decide to shutter State Street's tottering by-the-week rentals.

"It's a great opportunity," said Councilman Luke Garrott, vice chairman of the Redevelopment Agency Board. "The building is recently remodeled. By all accounts, it's in far better shape than the buildings on State Street."

The Rio Grande at 428 W. 300 South would offer alternative affordable housing at $80 a week if the city closes, as tenants fear, the crumbling Regis and Cambridge hotels on State between 200 South and 300 South.

The RDA would pay Rio Grande SRO, a subsidiary of Utah Nonprofit Housing Corp., $100,000 plus 50 percent of its Internal Revenue Service penalties not to exceed $35,000. The agency also would pay Salt Lake County and a city fund $240,000 in return for the release of all encumbrances and liens. A vote by the RDA board could come today.

But in case the historic hotel is a money pit, the city has an out clause. An architectural firm has been contracted to assess the condition. Once that report is reviewed, the RDA "may withdraw its offer to purchase the property without penalty," city documents show.

"Based on what we've seen so far, we don't expect that," said RDA Executive Director D.J. Baxter, who called the move "a good fit."

Indeed, residents at the Regis and Cambridge say they prefer to stay downtown, near free bus routes and other services. Some are balking at the prospect of relocating to newly refurbished digs at Palmer Court nearly 10 blocks farther south.

"Most of the people here -- they're already urban," explained Regis tenant Susan Kiles. "They don't want the suburbs."

But Kiles emphasized they do want their pets -- "their family," she said -- as well as easy access to the nearby homeless clinic.

The purchase would bring the city's so-called single-room occupancy (SRO) stock to 109 units, although officials say the overall goal is 150. "We intend to keep that commitment," said Councilman Eric Jergensen, RDA chairman.

The city could close on the Rio Grande deal within 45 days, which would give inspectors time to evaluate everything from wiring and heating to the overall structure. There also is a ready bid request to solicit a hotel manager that would operate on a $1 per year lease for 25 years. Rental revenues would cover operating costs that would be paid by the management team, not the city.

Meantime, Baxter said, three would-be developers have submitted plans for the Regis and Cambridge.

Garrott says Rio Grande could be attractive since several State Street tenants worry about Palmer Court's no-pets rule, as well as its beefed-up surveillance.

"It has an iron fence and reminds some of prison," Kiles said.

At the same time, she praised the city's relocation efforts, calling Palmer "gorgeous," and the RDA staff patient and thoughtful.

"The trust level is coming up," she said. "There is no bait and switch."

djensen@sltrib.com