After months of uncertainty about the future of an eclectic Salt Lake City community known as “Hobbitville” — and amid a grassroots campaign to protect the seven-acre site from development — Salt Lake City said Tuesday that it was under contract to purchase the property and turn it into a public art park.

That announcement comes after the Salt Lake City Council approved a budget amendment last week bumping up the city’s original $4 million offer for the property, submitted last summer under Mayor Jackie Biskupski’s administration, to $7.5 million.

The park, which runs along Emigration Creek near Westminster College on 1300 East, is one of few spaces left in the city that “has been largely untouched,” Salt Lake City Mayor Erin Mendenhall told The Tribune in a statement.

“There’s almost nothing like it in the city that has the potential to turn from private ownership to public lands,” she added. “We heard loud and clear from Salt Lake residents that they would like the city to invest in this property.”

Allen Park was established as a bird sanctuary in the 1930s by George Allen, a surgeon who served as president of the Sugar House Businessmen’s League and the Salt Lake Zoological Society. He was also instrumental in the development of Hogle Zoo and Tracy Aviary.

For years, the area served as a private refuge for residents from a growing city — though they often had to contend with groups of high school and college students who would drive through on the weekends, honking their horns and occasionally damaging property as they looked for the dwarfs rumored to live in the area that gave the community its nickname.

The tenants were ordered to leave last January, after it became costly and raised liability concerns to continue housing them given the neighborhood’s crumbling state and repair expenses that far outpaced rental revenue.

In the months since, nearby neighbors — exhausted by the rapid addition of high-density development in their community — have feared what would come next for the area, which is in a prime location for real estate development.

After hearing from a developer who wanted to put as many as 60 single and multifamily units on the site, residents began to mobilize, knocking on doors and collecting pledges in partnership with Utah Open Lands in an effort to “Save Allen Park.”

Karri Schlegel, the chairwoman of that group, said the community wanted to both help the city offset any costs associated with the purchase of the property and to “demonstrate community support for saving this parcel.”

“Sugar House has seen a great deal of density increase and apartment buildings being built and I think it’s important for us as a city to take advantage of saving some of these green spaces that still exist,” she said in an interview last week. “This is a really unique property.”

Mendenhall said the city has the money needed to cover the cost of the purchase through park impact fees — which must be spent on parks and have an expiration date — and a contribution from the Public Utilities Department. But she said any donations “would make it possible to keep more of those parks impact fees available for other park uses.”

“It has been gratifying to see the community activate so quickly around the desire to preserve Allen Park,” she said. “Many have offered to help with fundraising for the purchase price, and we’ll welcome those efforts as we work toward a final purchase of the property.”

Despite concerns from residents about what might be built on the Allen Park site, any developer who tried to fundamentally change the character of the site would have faced several challenges in construction, including a riparian corridor that takes up approximately half the developable land area and steep hills on the east end of the property.

The city’s site plan, submitted last summer under the Biskupski’s administration, calls for the preservation and maintenance of Allen Park as a public “art park” and natural area.

The city wants to preserve the artwork and quotations around the property and to formally adopt those into its inventory of permanent public art, as well as to repair and adapt the most historically and architecturally significant homes on the property.

The site contains 30 examples of artwork, including mosaic tiles and decorative concrete elements; 16 buildings, some dating back to the 1930s; multiple fountains and a family swimming pool; 18 pillars, some with mosaic panels, others that offer directions and some that have their own lighting systems; and 14 structures, including bird cages and an arch, according to preservation project consultant Kirk Huffaker, former executive director of Preservation Utah.

The city’s plan calls for the Scandinavian-style Allen house to be turned into a visitor center, while other spaces could be turned into spots for the city and community partners to conduct research and education programming around birds and wildlife, water and the environment, the arts and cultural history or other relevant items.

In addition to preserving the structures and artwork, the city also wants to protect the habitat for the peafowl that live on the property and plans to work with partner organizations to protect those birds.

It could take about five years to fully incorporate the new park space, and the property may be secured and closed to the public during that time, the city noted in its application.

After it’s up and running, the park space will be managed and maintained by Salt Lake City’s Division of Public Lands.