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Spenser Heaps, Deseret News
Salt Lake City Mayor Jackie Biskupski, second from right, is joined by tenants Abby Mars, Savannah Castranda and Carling Mars, left to right, at the opening of the Artspace Macaroni Flats in Salt Lake City on Thursday, Jan. 12, 2017.

SALT LAKE CITY — Jessica Norie laughed when she recalled what she told Salt Lake City officials 17 years ago when they first approached her about revitalizing the historic yet dilapidated building that was home to the Western Macaroni Manufacturing Co. more than 100 years ago in Salt Lake's Depot District.

"I said, 'Maybe if it was free?'" said Norie, director of local nonprofit developer Artspace.

Laughs broke out during the news conference celebrating the result of those early talks: a $7 million, mixed-use and mixed-income development at 244 S. 500 West, less than a block away from The Road Home's downtown homeless shelter.

The development was made possible with the Salt Lake City Redevelopment Agency's in-kind donation of the property to Artspace, more than $5 million in historic tax credits, grants and donations and about $2 million in loans for Artspace.

Salt Lake Mayor Jackie Biskupski and other city leaders joined Norie to commemorate Artspace's third project in Salt Lake's Rio Grande neighborhood, named Macaroni Flats.

The development adds 13 residential units and eight affordable commercial spaces for artists, nonprofit groups and small businesses to Artspace's now three buildings on the block, which house a total of 93 affordable housing units and 26 commercial spaces, Norie said.

It's the first completed development in the Station Center project planned to breathe new life into Salt Lake City's troubled Depot District.

"We all know this is an area in desperate need of revitalization and an area of hope in our city," Biskupski said. "The Station Center project is poised to allow the Depot District to become one of Salt Lake City's great neighborhoods."

Biskupski thanked Artspace for "taking a leap of faith with Salt Lake City to help us build a city for everyone."

"There is no denying that the problems we are facing as a city — homelessness, affordable housing and addiction — manifest themselves to the greatest extent nearby, but this is also where we can most greatly demonstrate our resolve to find solutions together," the mayor said.

Artspace, founded in 1980, aims to develop mixed-use affordable housing projects that promote small business while serving as "catalysts for revitalizing the neighborhood," according to its website.

Norie said Macaroni Flats was created with the intent to maintain the buildings' historic character while helping to lift up the surrounding community. She said as of Thursday, Artspace's occupancy rate rested at 99 percent.

"With our Salt Lake City partners and our incredible tenants, Artspace is committed to help return the neighborhood to the vitality of the Western Macaroni days when there were many people living, working and owning small businesses in this neighborhood."

Tara Latham, a tenant who moved into Macaroni Flats over the Christmas holiday, said she relocated her outerwear design business, Sugarhouse Creative, from Salt Lake City's east side for the affordable appeal and historical character of the building.

She said her $600 a month lease for the 500-square foot space is "unbelievably" affordable, and she also "loves the community."

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"I like to be part of the change," she said, adding that she's made it a habit of bringing a bag of oranges with her whenever she walks down the street, passing out the fruit as she goes to anyone who may be in need.

Financing for Macaroni Flats included equity provided by U.S. Bancorp Community Development Corp. through participation in federal New Markets Tax Credits and state and federal Historic Tax Credits. The Community Development Finance Alliance allocated a portion of tax credits to the project, along with participation by Morgan Stanley, Ally Bank and American Express Centurion Bank.