Salt Lake City Redevelopment Agency board members voted unanimously Monday night to negotiate with the U.S. Bankruptcy Court for Utah to purchase an unfinished apartment complex on Block 49, in the west downtown area.
"We're uncertain how the property will be used (if purchased)," said RDA director Alice Larkin Steiner. "But we will purchase it and plan it."Steiner said the RDA will try to come up with at least $1 million to purchase the 5 1/2 acres of abandoned land on the block bordered by 200 and 300 West and 300 and 400 South streets. The unfinished and dilapidated Pioneer Village Estates apartments occupy much of the block. The RDA already owns the southeast corner of the block.
The projected cost to purchase the property is between $1.25 and $1.5 million. It is estimated the RDA will spend between $100,000 and $200,000 to demolish the 305 unfinished apartment units at the site, said Richard J. Turpin, deputy director of the RDA.
The RDA may have a problem coming up with the funds to purchase the property. Steiner told the RDA board members at a meeting two weeks ago that they may have to drop funding of other projects to get involved in the Block 49 proposal. Board members also expressed concern about competing with private developers for the land. At least five private developers have expressed interest in purchasing the land.
Turpin said if the RDA purchases the property they may use it to build a tourist or cultural attraction, retail and office space on the first floor and some housing on the upper floors. Salt Lake County has expressed interest in the site as a possible science museum. Turpin said the RDA could also build some low-rise office buildings and some corporate support offices.
City officials have been worried about the stigma attached to the area, particularly to Pioneer Park, which is across the street from the site.
Steiner said a bankruptcy judge will decide Thursday whether to let the city or a private developer purchase the property.
Salt Lake City Mayor Palmer DePaulis, chief administrative officer of the RDA, said, "It seems to me that regardless of any direction we go at, it's only logical to assume that if we don't put a subsidy and get what we want . . . whoever does it in the private sector may not be doing that as a good future project for our city."
BoNo Development Inc. purchased the land for the Pioneer Village Estates in 1985 after it was condemned and acquired by the RDA. The property was partially dedicated for multifamily housing use through an arrangement with the Salt Lake Housing Authority.
Although BoNo had started construction on the project in anticipation of receiving some $13.5 million from a municipal bond offering to fund construction, development was stalled in May 1986 when its construction lender, Unified Capital Corp. of Woodland Hills, Calif., halted loan advances on the property.
Unified Capital said BoNo had failed to meet all the qualifications to secure the funds.
In June 1987, Ed Higley, president of BoNo Development Inc., filed a Chapter 11 petition in U.S. Bankruptcy Court for protection from creditors. The petition put creditors at bay until a plan for reorganization was approved by the federal court.
On Sept. 26, however, BoNo Development Inc. was placed into Chapter 7 bankruptcy. At that time, a federal judge signed an order that paved the way for a court-appointed trustee to sell off BoNo Development's primary asset, the unfinished apartment complex.