Converting this old foundry in Salt Lake City into trendy office space ‘is just the beginning,’ developers say

What’s happening inside a gritty and cavernous building near Interstate 15 signals the future of a run-down side of Salt Lake City known as the Granary District.

Developers are overhauling the vast interior of an early 20th-century former foundry at about 500 West and 700 South to turn it into new offices, in one of the largest examples of reusing old structures now underway in Utah’s capital.

Ellen and Jason Winkler, the husband-and-wife team behind a company called Industry, say they’ll start with about 110,000 square feet of flexible office space, spread beneath the renovated foundry’s two-story ceilings, brick walls and rugged steel framework.

They want to appeal to workers in the state’s growing tech and creative sectors, luring their employers with spaces offering vintage character and amenities like shared kitchens, rooftop decks and an interior courtyard.

But putting trendy offices on the southwest edge of downtown near the 600 South offramp for I-15 is also a calculated first step in a longer-term strategy, the Winklers say, one aimed at transforming the surrounding industrial area.

Once those office workers establish a presence in that dilapidated part of the city, the developers say they’ll bring in new shops and restaurants and build housing nearby.

“We try and reignite a neighborhood,” said Ellen Winkler, who, with her husband, has developed similar projects in Denver’s River North Art District, or RiNo, once a transitional area now turned fashionable.

“We have to start with an anchor,” she said. "This is just the beginning.”

Headed westward

With available land in Salt Lake City’s central business district lacking and demand for housing and commercial spaces rising, developers such as the Winklers are increasingly turning to the west-side Granary District’s disused warehouses, rail yards and former industrial sites.

Bounded roughly by 600 South to the north, I-15 to the south and west, and West Temple to the east the district draws its name from some of the Intermountain West’s oldest flour mills and grain elevators once located there.

Industry’s first phase of offices, costing an estimated $50 million, is part of nearly $1 billion expected to be deployed across the Granary District in the next five years, according to analysts at Cushman & Wakefield, a Salt Lake City-based real estate brokerage.

Helping to fuel that trend is Salt Lake City’s Redevelopment Agency, which is offering a host of development loans, tax breaks and other financial aid to boost growth.

City officials also recently crafted zoning rules meant to spur development of the Fleet Block, a city-owned property spanned by 300 West and 400 West between 800 South and 900 South. That prospect and growing business activity along the west-side stretch of the 900 South corridor are expected to further boost Granary District development.

RDA officials and land brokers are touting the district — with its proximity to downtown — to technology companies as an urban alternative to Silicon Slopes, the cluster of tech firms located along the suburban I-15 corridor between Salt Lake and Utah counties.

Portions of the Granary also fall within one of several so-called opportunity zones in Salt Lake City, created under President Donald Trump’s tax overhaul to give investors in specially designated, low-income neighborhoods sizable breaks on capital gains taxes.

A mid-2019 study by Newmark Grubb ACRES, another Salt Lake City-based commercial real estate brokerage, predicted that demand for land will continue to get more intense, pushing more development toward the city’s west side, the Granary District, South Salt Lake and properties near TRAX stops across the Salt Lake Valley.

Prices for developable acreage, meanwhile, "will continue to climb,” the study said, “as more regional and national developers move in and compete with local developers for available sites.”

‘Cement the neighborhood’

The Winklers, who recently relocated from Denver to Salt Lake City, said they prefer adaptive reuse projects partly for environmental reasons and partly because the approach gives their developments a connection to the past.

“This building by anybody else would be knocked down and put in a landfill,” Ellen Winkler said. “But we’re keeping it and then we’re going to build something onto it and make it better.”

They also say they are investing in Utah long term. They hope to welcome residents back to the ramshackle properties in the shadow of the I-15 offramp — and they’ve got a sizable footprint to do it. The former iron and steel foundry, built around 1907, is at the center of 8.3 Industry-owed acres spread over three lots.

“The scale that we’re able to work at here helps us do an even better job of making sure that things are done the right way for the long term,” Jason Winkler said.

Before her departure in June, former Salt Lake City Economic Development Director Lara Fritts predicted the Industry project, with its brand, would “cement the neighborhood as a vibrant area for arts, entertainment and business.”

Industry’s formula, honed in Denver’s RiNo area, works like this:

Take an urban location and build office settings attractive to younger workers who might be more tolerant than their older peers about laboring in a rough neighborhood. Add a few retail locations and eateries as that daytime presence builds and workers gradually improve safety. Eventually, build new, more affordable housing nearby.

“We tend to go into neighborhoods that aren't as welcoming as others,” Winkler said as she walked amid busy crews and heavy equipment revamping the foundry’s old bones. “Maybe there is a homeless population. Spray paint. We're not afraid of needles.”

The Winklers say about 80% of their plans for the project are firm, and the other 20% will be determined by how the market reacts.

More to come

Working with Salt Lake City partner Brandon Blaser, the developers say they will follow their first phase with an additional 100,000 square feet of offices, including a 30,000-square-foot climbing gym, along with new restaurants and multifamily housing — at a cost of about $100 million.

And while the companies that move into the Industry site will share kitchens and meeting spaces, they’ll get individual working spaces customized to their needs, a departure from more conventional coworking sites that have grown dramatically in Salt Lake City in recent years.

“We work hard to be supportive but in the background,” Jason Winkler said of their relationship with tenants. “It’s about them, not about Industry.”

Along with three other partners, the Winklers are also investors in another residential and commercial development nearby, to be known as the Post District.

That project, located on nearly 13 acres around 500 South and 600 South between 300 West and 400 West, will replace or overhaul a half-dozen or so unsightly cinder-block buildings on what are known as the NAC and A&Z blocks.

In phases built over the next three years or more, the Post District is anticipated to add nearly 500 apartments and town homes to the city’s central business district, along with office spaces, shops, trees, a parking garage and a pedestrian-centered plaza.

Other partners in the Post District project include Blaser; Utah-based Lowe Property Group; and Bridge Investment Group.

Ellen Winkler said in addition to opportunities in Salt Lake City’s real estate markets, she, Jason and their family were drawn to Utah as outdoor enthusiasts in love with the Wasatch Mountains. The city’s easy access to recreation, they say, will be a key selling point of their new work spaces.

“So it was such an awesome thing to be able to finally find our two loves, which are redeveloping forgotten communities and that mountain environment,” she said. “I don’t know where else we could have found that for us.”