Salt Lake City is considering plans to borrow $7 million it then would chip in to help developers build a 926-stall parking garage in the west-side Granary District.
The run-down former warehouse, railroad and industrial district on the southwestern edge of downtown is seeing a burst of new construction, particularly on the land around a new coworking site built in an early 20th-century iron foundry, known as Industry, at 650 S. 500 West.
Mayor Erin Mendenhall’s staff is pursuing the deal — subject to City Council approval — as a way to ensure some of the parking stalls in the $28 million structure already in the works are available to the public.
That $7 million stake for taxpayers, to be borrowed from a special state-managed fund devoted to transportation projects, would also help pay to redesign the garage, making it easier to convert to other uses as driving in the surrounding area declines with the advent of a new TRAX extension anticipated along 400 West.
Plans for the large parking structure are a further sign of an ongoing building boom across that wider and long-blighted district, fostered by the city’s population growth spurt and lucrative federal tax breaks.
“This is just the center of investment that’s going to happen in our city,” Mendenhall said of that pocket of the Granary. “In our 110 square miles, it’s concentrated right here.”
Denver-based Q Factor and BCG Holdings in Salt Lake City, the developers behind Industry’s shared offices, are building a small neighborhood on that block from 400 West to 500 West between 600 South and 700 South, with 375 new housing units, a 68-room hotel, retail spaces and expansions of the coworking site.
They all are part of a spate of new projects in several so-called opportunity zones, designated mostly in lower-income areas in Salt Lake City and across the country.
Selected by then-Gov. Gary Herbert in 2017, the federal zones are part of a program to provide real estate investors with sizable tax discounts on their capital gains in exchange for funding improvements in the areas and keeping their money invested for five to 10 years.
Several other major residential and office projects are also slated nearby, but parking “has started to become a pretty limiting factor for being able to grow that space,” said Rachel Otto, Mendenhall’s chief of staff. The city’s proposed $7 million contribution, she said, would help developers keep the mixed-income housing they envision more affordable.
“This parking structure is very additive to the neighborhood,” Otto told the City Council this week.
Councilman Dan Dugan, representing the city’s eastern foothills-centered District 6, questioned how plans for the parking structure might dovetail with larger city goals of reducing traffic in the urban core.
“We’re trying to get away from a car-centric city and here we are building a 926-stall parking structure,” Dugan said. “I’m concerned about adding more parking spots to an area where we’re already trying to get rid of cars.”
He and others also wonder how the parking garage will mesh with an ongoing review the city is conducting of its rules for businesses on off-street parking. There are questions about the money involved, too.
If approved, the loan would come from the State Infrastructure Bank, which is overseen by the Utah Department of Transportation and provides financing for transportation improvements. City officials plan for now to pay it back over 15 years, with cash recently allocated to Salt Lake City by the Utah Legislature.
So theoretically, according to Jennifer Bruno, deputy director for the City Council, “the city is a pass-through partner, and no city dollars would be used to pay the loan back.”
This would mark the first time the city has used this financing tool, Bruno noted, and if those state funds ran out, “the city would owe the remaining balance on the loan.” So the city is also proposing to pledge a portion of its sales tax revenues as a backup guarantee.
That led Councilwoman Amy Fowler, whose District 7 spans east-side neighborhoods south of 1700 South, to urge that the parking structure deal yield as much affordable housing in the west-side neighborhood as possible, if it proceeds.
“If we’re getting a loan where the city is on the hook for $7 million,” Fowler said, “I want $7 million of affordable housing, so we’re not just paying lip service to the idea and getting your novel two units.”