Backers of a mixed-use development including office spaces known as Industry SLC and an unfinished 1,000-stall parking garage in Salt Lake City’s Granary District have defaulted on $97.4 million in loans, a new lawsuit contends.
A California-based company called Acore Capital Mortgage is suing Industry Office SLC and Industry SLC Garage, alleging the firms have failed to make payments on two promissory notes and signaling pending foreclosure and sale for properties at 513 W. 600 South and 537 W. 600 South.
The complaint, filed in late October in Utah Business and Chancery Court, alleges the private-equity firm Catalyst Opportunity Funds owes nearly $103.7 million on the notes and other costs after it took over the office building and garage in 2023 and 2024, respectively.
The borrowers sought the loan in question, the lawsuit alleges, to complete a mixed-use development at the location including “modern office space, retail, industrial, multi-residential space and a parking facility.”
Catalyst has been a leading investor in the Granary District, specializing in projects located within federal Opportunity Zones that span the developing neighborhood.
Court filings indicate it assumed control of the office spaces and garage in the aftermath of the financial collapse of Makers Line, which oversaw a network of contracting and development firms active in Utah — until its fortunes unraveled amid mounting debts in 2023.
Taking over the two Granary buildings, Acore Capital alleges in its lawsuit, came with an agreement by Catalyst to assume loan payments until Sept. 10 and then pay the promissory notes in full. But the firm has instead defaulted, Acore Capital asserts, and as of July, has also not fulfilled an obligation to convey rent payments from the buildings.
Acore Capital’s lawsuit seeks the appointment of a receiver to oversee the dispute, on behalf of Acore’s parent company, Delphi CRE Funding, and other lenders. The suit also asserts that a deed of trust contract now gives Acore the power to press forward with non-judicial foreclosure on the buildings and the prospect of selling them to a new owner.
Attempts by The Salt Lake Tribune to reach Acore and Catalyst for comment were not immediately successful.
Allegations in the Oct. 31 lawsuit were reported Wednesday by the development news site Building Salt Lake.
The 150,000-square-foot Industry SLC office building converted from an old industrial foundry, opened with an initial batch of trendy co-working and office spaces in early 2020 to enthusiastic leasing by office tenants.
Adaptive reuse of the sprawling foundry was originally pursued by Jason and Ellen Winkler and their Salt Lake City-based firm at the time, Q Factor, modeled after similar revitalization projects by the husband-and-wife team in Denver. The Winklers were at one point minority owners in Industry Office, according to court filings.
Their various companies have since faced dozens of lawsuits flowing from the collapse of a suite of development-related firms they oversaw, including the now-defunct contractor Makers Line.
The parking garage was initially proposed with backing from Salt Lake City and meant to serve an ongoing building boom across that wider and long-blighted Granary neighborhood, which has been fostered housing demand from the city’s population growth spurt and lucrative federal tax breaks.
Property records show the multi-story parking garage, which remained unfinished and dormant as of Wednesday, is owned by AAM Investments, a firm listing a Salt Lake City address.