Foreclosure sale in Salt Lake City's Sugar House business district delays redevelopment of Granite Block

SALT LAKE CITY — The condominiums and shops planned along McClelland Street were supposed to give rise to a renaissance in the struggling Sugar House business district. But after much of the shuttered Granite Block was sold at a foreclosure auction last week, the block remains in the dark ages for now.

A number of parcels — stretching from 2100 South to Sugarmont Avenue — were sold to a Minnesota corporation for $8.2 million, indefinitely delaying redevelopment on the Granite Block.

"It's a setback for sure," said Councilman Soren Simonsen, who represents the area. "The economy is just a drag right now on so many things and Sugar House is kind of in the middle of it."

Red Mountain Group, of Santa Ana, Calif., had planned to turn the block into a mix of condominiums, shops and a 300-room hotel. Last year, a Red Mountain official told the Salt Lake Planning Commission his company had secured financing and the project was "shovel ready."

But after watching a developer demolish the shops on the corner of 2100 South and Highland Drive only to see financing for redevelopment disappear during a national recession, nearby business owners hoped the Red Mountain development would be a shot in the arm for Sugar House.

"People liked to come to Sugar House because they could walk from one store to another," said Gloria Chappell, who has run the antique store Cobwebs for 25 years. "Our business went down 50 percent. … If things don't pick up soon, we're going to have to just close it."

Between the vacant lot on the corner and the shuttered buildings on the Granite Block, passersby have become a rare breed, said photographer Laurie Bray, who runs a studio on the block.

"There's far less traffic walking by here because there are very few stores," Bray said. "It would have been great to have (the Granite Block) developed. It would have been the best thing to happen to Sugar House."

While Simonsen called the sale a setback for Sugar House, it could also give city leaders an opportunity to further integrate a planned streetcar and the Parleys Trail into a new development.

Neither Red Mountain nor SA Challenger Inc., the Minnesota corporation that purchased the property, could be reached for comment.

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