Salt Lake City approves deal to give Utah Theater to developers, in exchange for affordable housing

(Francisco Kjolseth | The Salt Lake Tribune) The aging Utah Theater on Main Street shows its wear on December 3, 2019. Faced with prohibitive costs of renovating 101-year-old venue, city officials have opted for plans to redevelop the site with a mixed-use skyscraper at least 30 stories high, with affordable housing, a public green space, parking structure and reuse of key elements from the historic theater.

A divided Salt Lake City Council voted Tuesday to approve a deal to let developers assume ownership of the dilapidated Utah Theater and demolish it to make way for a new downtown skyscraper.

The price tag? Zero dollars.

In their role governing the city’s Redevelopment Agency, council members were split 5-2 over the deal, with Ana Valdemoros and Andrew Johnston opposing Mayor Jackie Biskupski’s request to write down the site’s recently appraised value from $4 million to zero before selling it to two co-developers, Hines and LaSalle.

That land discount is being offered in exchange for 30 of the proposed residential skyscrapers’s 300 apartments being set aside as affordable for those making roughly 60% to 80% of the city’s average income.

The skyscraper project, estimated to cost $100 million or more, would also create a new midblock walkway at that spot on Main Street and potentially, a new downtown park, which has long been a city priority.

The deal approved Tuesday also requires Hines and LaSalle to reuse and prominently display historic elements from the 101-year-old theater, including a portion of its stage, interior sculptures and a unique Tiffany skylight.

Those public benefits, a majority of council members said, justify discounting the price for the theater, which the city bought for $5.5 million in 2010.

Still, some council members voiced frustration in an hourlong debate Tuesday over a lack of openness in some of the city’s dealings on the issue, while the two dissenting members also criticized the sale terms.

Valdemoros questioned why developers were not also being required to build the downtown park, which is only a possibility under the deal approved Tuesday. Johnston, meanwhile, challenged the value of the proposed midblock walkway and city’s latest appraisal of the site’s value at $4 million.

“It does feel low,” he said. “The offset doesn’t seem quite right.”

Councilwoman Amy Fowler, who chairs the RDA Board, also promised a review of city rules that allowed the RDA to enter into exclusive negotiations with Hines and LaSalle, without seeking outside bids.

That policy lets the agency favor adjacent property owners in negotiating the theater’s fate. Hines owns the Kearns Building north of the theater, while LaSalle owns 160 S. Main, to the Utah Theater’s south.

The neoclassical theater, completed in 1919, was once considered the city’s premier venue for touring acts, but has deteriorated significantly over the years and sustained major water damage. It also requires seismic retrofitting, though those exact costs are disputed.

After several studies and years of review, the mayor and RDA officials have deemed the estimated $35 million to $60 million cost for restoring the Utah Theater to its past glory to be too high — without increasing taxes, something the mayor is not willing to do.

Her successor, Mayor-elect Erin Mendenhall, has said she trusts Biskupski to resolve the issue to the benefit of city residents. Mendenhall voted in favor of the land write-down.

The theater’s demolition has been opposed by a host of the city’s artists, filmmakers, downtown business owners and history buffs, as well as those who recall using the theater before it was shuttered in the early 1990s.

An online petition to save the theater had drawn 4,200 signatures as of late Tuesday.

“I would urge you not to throw away the history of this city and the information it could give to our children and grandchildren,” said resident Greg Myron McDonough, one of a dozen or so who spoke Tuesday against the land write-down.

Biskupski surprised many involved when she signed a deal to sell the property on Nov. 7, using her authority to dispose of city property. That decision has upset theater supporters and historic preservationists and sparked accusations of a lack of transparency.

“Informing the public is not the same as involving the public,” said Pete Ashdown, a downtown business owner who helped organize the Save Utah Theater campaign.

He and others urged the city to sell the property at full price and also insist on the affordable housing, walkway and historic reuse of theater pieces.

Joel LaSalle, one of the developers involved, said he, too, shared a passion for the idea of saving the Utah Theater, a structure he referred to as “this beautiful, beautiful girl.” But LaSalle said the facility was too far gone.

“Where were these people five, four, three years ago?” LaSalle asked, referring to the recently emerged support for the theater. “Not only can she not be saved, this needed to happen four decades ago.”