The State of Utah wants to buy the 1,100-bed emergency homeless shelter downtown for $4 million. It may have to dig deeper.

(Trent Nelson | The Salt Lake Tribune) The Road Home, a shelter in Salt Lake City, Tuesday May 15, 2018.

Members of a state committee that voted on Wednesday to make an offer to buy the 1,100-bed emergency homeless shelter downtown might get a surprise when they find out what the building is worth.

“We’re really hoping the appraisal comes in under $4 million,” said Lt. Gov. Spencer Cox.

That’s the amount the State Homeless Coordinating Committee agreed to offer to the nonprofit owner of The Road Home. And it probably would have been enough, if only the offer was made two months ago.

But under this year’s recently released county property assessment, the value of The Road Home skyrocketed, more than doubling its assessed valuation overnight. The building and land it sits on is now assessed at nearly $7.7 million, up from about $3.2 million in 2017.

Shelter the Homeless, the nonprofit group that owns The Road Home, is having the building appraised to see what it can get for it. It plans to sell the building and use the money to continue building three smaller shelters – two in Salt Lake City and one in South Salt Lake – that will open July 1, 2019, when The Road Home will close.

Christopher Cherrington | The Salt Lake Tribune

If the appraisal comes in above $4 million, the chances of a state purchase become less likely.

“If the appraisal comes back significantly more than that, we don’t have the funding right now,” Cox said. “We would have to get legislative approval for that, so it becomes less likely that that transition would take place.”

It’s possible for the building to appraise for less than the assessed value, though deputy county assessor Chris Stavros said his office is required to reflect a building’s fair-market value when the office determines a property’s worth for tax-collection. Generally, assessed valuations are lower than market price.

The assessor’s office took a closer look at the building this year, as it does every five years with buildings throughout the county. Stavros said during this year’s review, assessors compared The Road Home to other buildings in town and found its price-per-square-foot value was below other similar buildings.

“We had the market data to support bringing it in line” with other properties, he said.

The office more than tripled the assessed value of the The Road Home’s building, from $2.1 million in 2017 to $6.5 million. That happened after the building’s value dropped slightly from 2016 to 2017. The assessed value of the land, 1.17 acres of prime real estate in a growing downtown neighborhood, ticked up from $1.1 million to $1.2 million.

Still, state officials who were behind the pitch for making an offer on the building said they were doing so with the idea of knocking the building down and starting over.

“This is probably a pretty good location with a demolition and a reconstruction of the new building,” said Jonathan Hardy, director of housing and community development for the state. “If [state agencies] don’t use it, it would be sold.”

If a sale went through, the state would possibly use the building for a facility that warehouses historic artifacts and art.

Any eventual purchase would require signoff from the Shelter the Homeless board of directors. At least one member of the nonprofit’s board said she isn’t interested in getting rid of the building at below fair market value.

Jean Hill, lobbyist with the Catholic Diocese of Salt Lake City, who also sits on the Shelter the Homeless board, also said she had concerns about voting for anything that doesn’t help solve the problem of homelessness.

“I hope as a board we’ll be able to have a good discussion about what is the best deal for us,” Hill said. “Not only in terms of the monetary value but also in terms of what will happen to the property. I was unaware that the [assessed] value had gone up that much.”

One idea that came to mind, she said, was some sort of low-income housing on the site. The state has a vast shortage of low-income housing.

“I’d prefer to see that property used to help solve homelessness problems,” she said, rather “than simply becoming another state building.”