Is a new hospital coming to old Sears site in downtown Salt Lake City?

Sources say Intermountain Healthcare aspires to tear down LDS Hospital in the Avenues and relocate medical services to former retail spot.

(Trent Nelson | The Salt Lake Tribune) The former Sears store site in Salt Lake City on Wednesday, Aug. 3, 2022.

The latest owners of the long-vacant Sears store and surrounding block in downtown Salt Lake City want to tear down the building.

Intermountain Healthcare bought the iconic property at 754 S. State St. and nine adjoining parcels on that block in December. Then, three months ago, the hospital system applied at City Hall to demolish the empty, 75-year-old, faded beige department store and a former auto repair shop to the west.

So far, though, the Salt Lake City-based nonprofit chain hasn’t publicly shared its future vision for the key downtown locale and its sizable parking lot, which is currently fenced off and used for various kinds of storage.

Spokesperson Jess Gomez confirmed this week that Intermountain had acquired the land “for future use to enhance health care services available to area residents,” but he didn’t offer additional details.

Several people aware of the plans — but unauthorized to speak about them publicly — told The Salt Lake Tribune the health system aspires to demolish LDS Hospital in the Avenues, with its aging facilities, and construct a replacement medical center around that spacious corner of State Street and 800 South — a prospect Gomez declined to address directly.

(Trent Nelson | The Salt Lake Tribune) The former Sears site in Salt Lake City on Wednesday, Aug. 3, 2022.

If true, that could take years, although sources said Intermountain could announce the moves soon. But as of last week, Gomez said, Intermountain is “continuing to develop and evaluate our plans for the property but have not finalized those plans as of yet.”

“Once we have more specific details,” he said in a brief statement responding to questions about a new hospital, “we’d be happy to share those.”

Property records show one of its subsidiaries, IHC Healthcare Services, now owns 8.95 contiguous acres on that strategically located but disused Sears block, as new development goes up all around it. The parcels have a combined assessed value of about $14.8 million.

As yet, the city hasn’t approved Intermountain’s May 4 request to raze the former Sears store, which was built in 1947 and closed in 2018, but after stalling temporarily for want of required documents, the request is now moving through City Hall.

In an email made public in December, LDS Hospital CEO and Administrator Health Wall said the Sears location “offers convenient access to all we serve throughout Salt Lake Valley, patients from other parts of Utah, and other states.”

Lay of the land

(Rick Egan | The Salt Lake Tribune) Intermountain LDS Hospital, on Wednesday, Aug. 11, 2021.

The largest health care provider in the Intermountain West, Intermountain Healthcare is a privately held nonprofit company. It merged in April with another hospital system called SCL Health, based in Colorado, and it is now the parent company over a combined network of 33 hospitals and about 385 clinics primarily across Utah, Idaho, Nevada, Montana, Colorado and Kansas.

In disclosures to the Colorado attorney general, which reviewed the merger, officials with Intermountain and SCL Health agreed they had “no intention to move, close or consolidate any existing clinical facilities as a result of the merger.”

Records show Intermountain-owned firms also own large chunks of those six blocks in the Avenues under and around LDS Hospital, located at 380 N. C Street, including multiple residential properties, medical buildings and a parking garage around C and D streets between Seventh and 10th avenues.

Given the city’s high demand for housing and dearth of available land, the Avenues site would likely be an attractive prospect for residential and mixed-use construction, were the hospital and nearby buildings to be razed and the land opened to development.

Much of what it owns in the neighborhood is zoned for institutional uses, which allows for multiple structures in a campuslike setting compatible with surrounding buildings.

The Sears site, though located near a host of downtown amenities, including a new TRAX station, could present obstacles for building a full-blown replacement to LDS Hospital, which opened its current facility in 1984 on the site of a prior hospital built in 1905.

(Trent Nelson | The Salt Lake Tribune) The new TRAX station near the intersection of 600 South and Main Street in Salt Lake City on Tuesday, July 26, 2022.

City Planning Director Nick Norris said Intermountain officials have inquired with the city if hospitals are a permitted land use under the Sears property’s current zoning, known as D-2.

“They are not,” Norris said. Changing that, he added, would require an amendment altering city code, “but no official information has been provided.”

The existing D-2 zoning is meant under city rules to “foster the development of a sustainable urban neighborhood that accommodates commercial, office, residential and other uses that relate to and support the central business district.”

Development on land with the D-2 label is meant to be less intensive than elsewhere in the urban core, allowing buildings to cover more land and be located closer to the sidewalk.

A key part of downtown’s landscape

The prospect of new construction on the Sears block surfaces after Salt Lake City-based Colmena Group and Kimball Investment Co. withdrew plans for a multiphased project at the site that included an initial 11-story building with up to 360 living units, facing State Street and 800 South.

Tentatively called The Jetty, the first phase was to be part of a larger commercial and residential development dubbed Copper Yards, but that fizzled as developers met with delays in securing zoning concessions on building height and other features in the city’s design review.

(Trent Nelson | The Salt Lake Tribune) The former Sears site in Salt Lake City on Wednesday, Aug. 3, 2022.

Real estate brokers based in Dallas announced last week that Lee Development Group, also based in Salt Lake City, has purchased a half-acre parcel and vacant, 22,874-square-foot warehouse and office building directly north and across the street from the Sears site, for $3 million.

Lee plans to redevelop that property, brokers at SRS Real Estate Partners said, but “does not have official details to announce at this time.”

The flat and rectangular Sears store was built on an open baseball field, reportedly used by a team called the Salt Lake Skyscrapers, in 1947.

It reflects the chain’s architectural taste at the time for midcentury modernism and closed in January 2018 amid a wave of closures of 18 Sears and 45 Kmart stores deemed unprofitable by the chain’s parent company, Sears Holdings, which filed for bankruptcy the following October.

Then-Salt Lake City Council member Derek Kitchen and others urged at the time that the Sears site be redeveloped to better fit that area, with Kitchen calling it “a big building in a sea of parking.”

And there might be sound reasons to demolish the structure now, without future plans cemented.

Moving toward demolition

It’s vulnerable to trespassing and the periphery of the site has drawn homeless encampments in recent months. Remote police surveillance units are now set up in the parking lot. In November, police arrested a 43-year-old woman for allegedly setting fire to a portion of the structure, leaving its boarded-up doors engulfed in flames by the time officers arrived.

“The building itself is pretty dilapidated,” Gomez wrote via email, “so the primary reason to bring it down before winter is for safety purposes.”

The Intermountain Healthcare subsidiary owns all but a handful of parcels on the northeast corner of the Sears block, which are occupied by the restaurant known as Sapa, a bar called Purgatory and a retail business, Retrospect Water & Light. Taco stands ply a busy trade on adjacent sidewalks.

Stefani James, special projects assistant with the city’s Department of Community and Neighborhoods, wrote in an email that as part of their application, officials at Intermountain have discussed “taking down everything on the south side of that block.”

(Trent Nelson | The Salt Lake Tribune) The former Sears site in Salt Lake City on Wednesday, Aug. 3, 2022.

Both the vacant Sears store and the L-shaped Sears Auto Shop closer to Main Street sit on a portion of the main six-acre parcel on the south half of the block, located between 700 South and 800 South between Main and State streets.

Meanwhile, James said, no future plans for developing the block have been submitted to the city’s building services.

The city doesn’t require a reuse plan before Intermountain might be allowed to tear down the buildings, but the company does need to indicate the future use of the property — and, according to Norris, it hadn’t done that as of last week.