Demolition starts at an eyesore on Salt Lake City’s State Street — with hopes of replacing it with affordable housing

(Trent Nelson | The Salt Lake Tribune) Salt Lake City-hired Impact Demolition begins tearing down the rusty and graffiti-covered building shell at 255 South State Street on Wednesday Dec. 26, 2018. The property has sat dormant and unfinished for years after Utah-based architect Ben Logue and his company Tannach Properties ran into financial trouble and had to pull out.

A rusty and graffiti-covered eyesore in Salt Lake City is coming down.

The day after Christmas, city-hired crews with Impact Demolition began ripping out the vacant steel and concrete shell at 255 S. State St. to make way for what’s proposed as a 14-story residential tower, rekindling hopes at City Hall for long-sought urban renewal and affordable housing at the downtown location.

The city’s Redevelopment Agency (RDA) selected Chicago-area developer Brinshore last fall to start the project over after a previous developer — Ben Logue and his company Tannach Properties — withdrew more than three years ago in light of mounting financial problems.

The site has sat dormant for years, until Brinshore was chosen from a list of nine bidders. RDA spokeswoman Amanda Holty said Wednesday the demolition will remove the main aboveground structure and underground parking levels, while leaving a lower floor, supporting walls and the foundation intact to support an adjacent building at least until Brinshore is able to begin work.

Holty said the main structure, covered in graffiti after years of disuse, would take about a week to fully demolish, and crews would need another two to three weeks to finish removal from the entire site.

The abandoned shell at 255 S. State, across the street from the Marriott City Center hotel, had come to symbolize dashed hopes that a project called “Plaza on State” would revitalize the area.

Logue bought the property from the city in early 2012 for $2.7 million with plans to build a residential and retail complex around a European-style plaza, with 136 of its 180 units to be subsidized for low- and moderate-income renters.

(Image courtesy of Brinshore Development) Rendering of proposed 13-story and 8-story residential towers planned by Chicago-based Brinshore Development at 255 S. State Street in Salt Lake City.

Work stalled shortly after it started and a crucial engineering study found flaws in the structure’s steel, one of a series of problems that led Logue’s costs to balloon. Lawsuits and debt eventually forced him to pull out of the project, and its primary lender, Citibank, declared Tannach in default in June 2015. Citibank foreclosed on the 1.12-acre parcel, and the RDA bought it back in October 2017 for $4 million.

The demolition is expected to cost about $380,000. Holty said nearly all of the site’s steel and concrete debris will be recycled.

Once the parcel is clean, Brinshore and RDA officials will complete their due diligence and conduct a new appraisal, Holty said. Brinshore will then refine its construction plans and finalize project financing.

With those in place, Holty said, the RDA envisions selling the property to Brinshore — although with a repurchase agreement giving the city an option to buy it back — and construction will begin sometime in early 2019.

Brinshore is a 24-year-old company based in Northbrook, Ill., that has been involved in developing more than 80 housing projects in 11 states and the District of Columbia, with a focus on working with public agencies, environmental conservation and affordability.

RDA Chief Operating Officer Danny Walz has said that Brinshore is proposing to build a residential tower of 190 housing units at State Street, with 76 of them to be kept affordable for residents earning between 50 percent and 60 percent of the city’s median income of $46,711. Ten units are to be devoted to housing low-income residents with HIV/AIDS and six will be for low-income disabled residents.

Brinshore’s plans include 40,000 square feet of first-floor commercial space in the complex for arts and entertainment groups with an educational mission, along with an outdoor performance venue. The RDA wants Brinshore to build and maintain a midblock walkway tying State Street to Floral Street just east of Edison Street, and to preserve the historic Cramer House, built in 1890 and located on the State Street property’s eastern edge.

The firm also has been selected by the RDA to build a 200-unit mixed-income residential complex at the site of the now-closed Overniter Motel, at 1500 W. North Temple.