I think these projects are all very solid and I seem them each moving forward pretty quickly. —D.J. Baxter, Salt Lake City's redevelopment agency
SALT LAKE CITY — The Sugar House business district is on the cusp of major changes, thanks to new housing and development projects planned or under way.
The private investment projected for the next five years is $400 million.
"There's an enormous amount of development that's about to occur in the heart of the Sugar House business district," said D.J. Baxter, executive director of Salt Lake City's redevelopment agency.
For years, a symbol of Sugar House development was an empty lot in the middle of the business district, nicknamed by some as "the Sugar Hole." It was a proposed project stalled by the economic downturn, among other factors.
That's about to change.
Baxter said nine projects are in the works in the area that will bring more than 1,000 new residential units, and nearly 2 million square feet of new residential, retail and office space.
"Building up is essentially the next frontier for us," Salt Lake City Councilman Søren Simonsen said.
Simonsen, an architect, said the new two-mile Sugar House streetcar line, which broke ground last week, is driving the growth. So are a variety of urban amenities, from bike trails to restaurants to entertainment venues. And there is a need for lower cost housing, like condominiums and apartments.
"What we're hearing from the development community is there's a huge demand for housing. But we can't finance condos and homeowners can't buy condos because of the credit market," Simonsen said. "Right now, there's huge pent-up demand for other housing — apartments — and that's what's relatively easy to finance today."
The apartment vacancy rate in Salt Lake County was 5.2 percent in October, down slightly from the previous year when the rate was at 5.7 percent, according to latest data from Commerce Real Estate Solutions.
The decrease was driven by the rising demand in the rental market due to the increasing number of households unable to qualify for home ownership.
Vacancy rates for all types of rental units declined over the past year with the exception of studio units, said Kip Paul, executive director of investment sales for Commerce.
He said that 5 percent vacancy "is generally considered as tight as a market can be," or virtually full occupancy. Trends indicated that the area rental market will likely fall below the 5 percent benchmark sometime this year — making the market even more difficult for prospective renters.
According to the Salt Lake City Redevelopment Agency, construction of the Sugar House streetcar is an impetus to the creation of more than 1,000 residential units and nearly 2 million square feet of redevelopment on seven sites in the Sugar House Business District.
Development is slated for each of the seven stops along the new streetcar line. The streetcar line is expected to be finished by late 2013.
"I think these projects are all very solid and I seem them each moving forward pretty quickly," Baxter said.
The projects are:
• Cowboy Partners, 2150 S. McClelland, 171 units, $23 million;
• Sugar House Loop, 2130 S. 1100 East, 211 units, $53 million;
• Sugar House Apts., 1985 S. 1200 East, 70 units, $11 million;
• Westminster, 2162 S. 1300 East, 44 units (student housing), $28 million;
• Vacant Granite Furniture site, 1050 E. 2100 South, will include retail and office space, no residential, $50 million.
• Wilmington I North, 1201 E. Wilmington, 112 units, $35 million;
• Wilmington I South, 1201 E. Wilmington, 100 units, $35 million;
• SH Center West, Simpson & Highland, 250 units, $85 million;
• SH Center East, Simpson & Highland, 100 units, $85 million;