A day of ‘heavy lifting’ on affordable housing — two new projects break ground in Salt Lake City

(Rick Egan | The Salt Lake Tribune) Construction has started on the First Step House, on the latest phase of the First Step House Recovery Campus, at 440 South 500 East in Salt Lake City. Friday, March 1, 2019.

In what one called “an extraordinary day,” Salt Lake City saw two new affordable housing projects break ground Friday, one for the elderly and another for those escaping homelessness.

The two projects, at Centro Civico Mexicano and First Step House, will include a total of 136 new dwellings — with all of those units kept accessible for residents earning below-average incomes.

“Today is such a landmark in dreams coming true for people who desperately need affordable housing,” Mayor Jackie Biskupski said of the two developments. “If we bring everybody together — the bankers, the builders, the state, the county, the city — what people thought was impossible was truly possible.”

First Step House is adding 75 units to an existing campus to serve those transitioning from homelessness, with eight or more devoted to those with mental illness. Centro Civico Mexicano is building 61 apartments for active seniors, north of its existing cultural center at 155 S. 600 West, which was founded in 1939.

Both projects involved intricate financing that often goes into affordable housing, drawing from scores of government, nonprofit and private-sector sources while also relying on several complex tax breaks.

The Centro Civico housing, with an anticipated price tag of $12 million, relied heavily on low-income tax credits and a series of other grants, project backers said. And in the First Step House expansion, officials leveraged about $3 million in federal and state credits and has an overall price tag of $20 million, according to Grant Whitaker, president and CEO of the nonprofit Utah Housing Corporation.

"For those of you [who] don’t understand tax credits, this part is fairly simple,” Whitaker said. "Tax credits means down payment. This makes it a small mortgage and a small monthly payment, meaning they can have very low rents, affordable to people who don’t make much money.”

First Step House is expanding its Recovery Campus at 440 South 500 East, which opened in 2016. The site provides drug treatment, medical care, job training and housing, primarily for veterans.

The 75 new apartments represent the city’s first addition of what officials call permanent supportive housing since 2007, when a former Holiday Inn at 999 South Main was converted to 201 units serving single homeless men and known as Palmer Court.

This new phase at First Step, to be called 5th East Apartments and set to open in spring 2020, will be built by Kier Construction. The facility’s focus will be serving residents with mental illness who are coming out of homelessness and often have nowhere else to go, according to Shawn McMillen, executive director of First Step House.

“They are folks who often slip through the cracks,” McMillen said of the clientele. “And because of this, we’re going to provide a warm, safe place for folks to live that will match the level of services to the level of need.”

The new supportive housing, which pairs a place to live with case management and social services, also represents another positive step away from the shelter-centered model for providing homeless services, Biskupski said.

Biskupski said the two projects kicked off Friday are part of 2,500 affordable homes proposed or underway in Utah’s capital city, where officials believe there’s a need for up to 9,000 such dwellings.

About 100 elected officials, leaders in Utah’s Latino community and supporters turned out Friday morning at Centro Civico to launch construction of what will be a five-story building there. Rimrock Construction will build the 61 apartments, along with adjoining retail spaces, classrooms and meeting rooms.

Biskupski said the housing met “a critical need” among the city’s senior population, while Brandy Farmer, CEO at Centro Civico, added that Utah’s Latino community was proud to provide these residents with a way to live affordably close to downtown.

Farmer and others also said the expansion honored the center’s rich cultural heritage, which dates back to the state’s first Mexican immigrants who came to work the region’s mines and railroads.

Developer and former Salt Lake County Mayor Peter Corroon said the project — dubbed Casa Milagro, Spanish for Miracle House — faced a stream of financial and logistical obstacles since it was first proposed in 2013, including an unexpected, $240,000 environmental cleanup from an abandoned lead smelter.

Though their timeline depends on raising more money, officials said they envision a second phase someday to add retail shops to the complex and revitalize the main building at Centro Civico Mexicano, Utah’s oldest nonprofit Hispanic organization.