A suburban housing boom likely is fueling construction and new projects in Salt Lake City, according to an economic analyst.
Salt Lake City issued permits for about $505 million of construction work in fiscal year 2006, which ended June 30. That's 51 percent more than the previous fiscal year, which registered $333 million in projects.
The increase may be due to a strong housing market outside Salt Lake City that brings residents and employees into the city for shopping, entertainment and work, said James Wood, director of the bureau of economic and business research at the University of Utah.
"What we've had is a really strong residential boom, but not in Salt Lake City, because it's land-locked," Wood said. "But the residential boom brings people, and it does lead to increased development downtown.
"If we weren't having any development in the suburban areas, we'd have less development downtown."
Large projects in Salt Lake City over the last year include renovating the Tabernacle on Temple Square, early construction on an archive library for The Church of Jesus Christ of Latter-day Saints, a pharmaceutical-manufacturing plant west of the airport called Cephalon, a new facade on the Zions Bank tower downtown, and several large housing projects.
Wood and Orion Goff, the city's director of building services and business licensing, said that the projects are the beginning of a boom for the capital. The largest project, of course, is the downtown mall renovation by the LDS Church, which is projected to add about $2 billion of demolition and construction during the next five years. The church has not announced when it will be filing plans.
"They're still dribbling in preliminary stuff and asking questions," said Goff. Church representatives told Goff to expect the first formal action on the renovation to be requests for demolition permits. "I think it's going to be pretty major demolition," Goff said.
Church spokesman Dale Bills declined to say Friday when the church will release plans or when it might start demolition on the existing malls. The mall renovation is part of what Wood called a history of "lumpy" investment in the city.
"When the church dumps all this money, they're going to have a lot of money downtown, and then we're not going to have a lot of money for a while after that," Wood said. "We're going to have $2 billion in the next five years, but it's going to be a long time before we have another $2 billion."
One of the larger residential buildings downtown is the Metro condominiums on 200 East and approximately 350 South. The 117-unit building will be seven floors and is scheduled to open in fall 2007. Demand for the condos has been high, even though the units don't have price tags and are more than a year away from completion.
"Absolutely, without question, I see it as part of a bigger boom," said Andrew Pratt, the broker for the Metro condos. "It all works together."
The city collects money on building, electrical, plumbing and other permits based on the value of a project, so the larger a project's worth, the more money the city makes. The jump in large, expensive projects has meant more work for city inspectors and plan reviewers.
To fill that work, the City Council, in this year's budget, approved money to restructure the building-plans office to maske it a "one-stop shop," with one counter that will give clients access to all the city departments that need to approve plans building, planning, engineering, transportation, fire department, public utilities.
Goff hopes to hire for those positions within a few months to get the one-stop shop set up before demand from the mall renovation gets too strong."We are seeing the front end of, I think, two or three vigorous years of non-residential construction, and a lot of that will be in Salt Lake City because of what's going on downtown," Wood said. "We're just seeing the beginnings of it."
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