An affiliate of the Texas-based developer who received a free piece of prime land in the heart of Downtown Salt Lake City for a stalled apartment tower issued a record check for an apartment building in a suburb north of Chicago last week.
A Hines affiliate paid $148 million for the building in Evanston, at $420,454 per unit in the 352-unit building in the suburb’s downtown. The building opened in 2015 and had been on the market for just under a year when the Hines affiliate picked it up.
The record purchase comes as Hines sits on its stalled project at 148 S. Main, the former site of a historic theater. Salt Lake City gifted the property to Hines in 2021 in exchange for a small number of moderate income units and privately owned open space on top of a three-story parking garage, among some other requirements.
Hines missed its opportunity to capitalize on low interest rates before financing for its project fell through. The city has opted not to try and renegotiate or alter the deal, other than to briefly examine the site for a possible relocation of Abravanel Hall.
In August, Hines requested a permit to build a surface parking lot on the property while it awaits financing to possibly move forward with the Utah Theater site.
“While current economic conditions limit our ability to launch the initially planned project for this site at this time, ownership is exploring an opportunity to create a temporary event space for the community on the 150 S Main site,” a Hines representative said at the time.
Under the agreement for the free land from the city, Hines was supposed to break ground on a 31-story apartment tower with 400 units by March 31, 2023, after rushing to demolish the Utah Theater. It missed the deadline.
That month, a Hines spokesperson said the company remained committed to Salt Lake City.
“We continue to be fully committed to the project and the Salt Lake community,” the spokesperson said.
The company didn’t respond to a request for comment about its suburban purchase amid delays in Salt Lake City. Hines purchased the property through a trust and it’s not immediately clear whether or how the company paid cash, financed the purchase or had other investor partners in the deal, according to The Real Deal.
The company may have chosen the Chicago suburb over other projects like the Utah Theater site due to strong demand in the submarket, which includes Northwestern University, while Salt Lake City works through a historically high supply of new apartments concentrated in and around Downtown.
Hines isn’t entitled to any extension of the agreement to build on the Utah Theater site, but the city has opted to give it extensions anyways, even as the developer has pursued projects and acquisitions elsewhere rather than in Salt Lake City. Hines has moved ahead with a retrofit project nearby on South Temple, known as the Seraph.
The Redevelopment Agency said it didn’t have any updates about whether it was considering renegotiating its decision to give the Utah Theater away. Salt Lake City would have to pay Hines for costs incurred as part of its stalled effort to redevelop the property if it moved to nix the agreement, a price that could be worth millions of dollars from planning, design and demolition.
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