Claiming their partnership will "open the door" for downtown redevelopment, state, city and private development company officials announced the construction of a new state office building in downtown Salt Lake City.

Gov. Norm Bangerter told reporters in his office the state completed negotiations with Salt Lake City and Price-Prowswood Associates to build a new Department of Employment Security Administration Building.Construction on the $13.6 million building will begin in June on Third South just west of the state's Heber Wells Building, 160 E. Third South, said Neal Stowe, state director of Facilities Management.

The building, five to six stories high depending upon the design, will house 420 office workers when it opens in June 1991, Stowe said.

Bangerter and Salt Lake Mayor Palmer DePaulis hailed the venture as a public private partnership involving the state, city and private developers in redeveloping the downtown. "This is something that's been worked on for the past year . . . and I believe this demonstrates that we in the state are concerned about our city," Bangerter said.

DePaulis, who has said revitalizing Salt Lake City's downtown is one of his primary objectives, said "this just opens the door for us" by helping to bring people into the partly vacant south downtown area.

Richard Price, of Price Prowswood Associates, which owns much of the block where the new state building will locate, said the building will help to stem the tide of commercial traffic shifting to the north downtown area.

Price Prowswood built the City Centre project, 175 E. Fourth South, and has plans to build another larger office complex at the intersection of Fourth South and State, Price said.

To lure the state to build downtown, Salt Lake City agreed to spend $2.5 million in Urban Development Action Grant money to build a parking complex adjacent to the new Employment Security Building.

The grant money was awarded to the city following a $2.5 million settlement between the federal government and defendants in a fraud suit filed by Salt Lake City in connection with Select Telephone Technologies.

The complex will house parking stalls for Employment Security workers and state employees working in the Heber Wells building, Stowe said. More stalls could be provided commercial and other government drivers.

As further enticement, the land was sold via the city's Redevelopment Agency to the state at below its carrying cost, Price said. RDA Director Mike Chitwood said the seven acres are valued at $22 per square foot but will be sold for $18 per square foot.

Revenue bonds will be sold by the state Dec. 13, Stowe said. The bonds will be repaid with federal money and will not require any state tax dollars, he said.