State of Utah to own The Road Home property after $4 million purchase deal

(Trent Nelson | Tribune file photo) The Road Home shelter in Salt Lake City, Tuesday, Dec. 13, 2016.

At $4 million, the price was right for the state of Utah to buy Salt Lake City’s emergency homeless shelter — especially with a $3 million discount.

State officials and leaders of the nonprofit that owns the shelter announced the sale Tuesday, calling it a “win-win-win” ahead of the scheduled 2019 closure of The Road Home and the planned opening of three new, smaller shelters that year.

“This transaction is a great help to Shelter the Homeless as we continue to make progress in the construction of these new resource centers,” said Harris Simmons, board president of Shelter the Homeless, the property’s current owner.

(Francisco Kjolseth | The Salt Lake Tribune) Pamela Atkinson, advocate for the homeless, speaks with the press as she expresses her approval of plans by Shelter the Homeless to sell the downtown community shelter property to the State of Utah as they gathered in front of the Rio Grande Depot on Tuesday, Sept. 25, 2018.

In August, the state’s Homeless Coordinating Committee voted to approve a $4 million offer for the site on 1.7 acres of prime downtown real estate. Salt Lake County assessors had pegged the value of the property at roughly $7.7 million for tax purposes.

Simmons said the $4 million price was “compatible” with a private appraisal of The Road Home, which found the property’s value to be $4.2 million. The state’s offer was accepted, Simmons said, because of its ability to pay cash and successfully close on the purchase, and its interest in smoothly transitioning the existing homeless population to new service centers.

“We didn’t open it up to other offers,” Simmons said. “The state, we think, is an important landlord to have in place during this interim period.”

The sale was not finalized Tuesday, but Simmons said it would be made effective shortly. Under the arrangement, The Road Home will continue to operate the shelter, under the ownership of the Department of Workforce Services, until its closure in June 2019.

Utah Lt. Gov. Spencer Cox said a decision has not yet been made for the future use of the property after the shelter’s closure. But one proposal, he said, is to use the space for storage and display of historically significant items.

“There is a need to be able to better preserve and display some of the historical artifacts and art pieces that the state of Utah has in their possession,” he said. “This could be a place to do that.”

Cox previously told The Salt Lake Tribune that legislative approval would be required for a purchase price significantly higher than the committee-approved $4 million. And individual members of the Shelter the Homeless board expressed skepticism toward selling the property below market value, as revenue from the sale is intended to support the creation and operation of the three new shelters.

Jean Hill, a member of the Shelter the Homeless board and spokeswoman for the Catholic Diocese of Utah, said Tuesday she trusts the private appraisal and is comfortable with the terms of the sale.

“The tax assessment is somewhat questionable,” she said. “No one is quite sure where that [$7 million] number is coming from.”

She said discussions with state leaders are ongoing regarding the development of low-income housing in the area. And by selling the property to the state, Hill said, Shelter the Homeless avoided the fees and commissions that would be associated with selling to a private buyer.

“This saved quite a substantial sum of money,” she said. “I think it’s actually a fair price.”

Jonathan Hardy, Housing and Community Development Division director for the Department of Workforce Services, said two of the shelters are on schedule to open next summer, while the third is catching up.

He was unable to answer whether The Road Home would maintain its scheduled closure next June if the new centers are not operational.

“We’ll take a look at that at that time,” he said.