The largely pro-development Salt Lake City Council surprised the region with its unanimous vote rejecting a hotel next to Sugar House Park, but the vote itself doesn’t necessarily mark a clear shift in the city’s approach to development, industry experts say.
That willingness to make change is one reason why a vote last week to reject a hotel proposal on the edge of Sugar House Park surprised many within the industry.
The City Council voted unanimously to reject the proposal, which called for building a seven-floor hotel with ground floor retail space and a rooftop bar and restaurant, among other features. The vote came after months of discussions and public hearings where numerous Sugar House residents voiced their opposition to the project.
The vote was a relative rarity for the council, which is likely the most favorable toward development in the region. So the unanimous vote last week raised questions about whether the seven-member council could begin to be more selective with large projects like the hotel.
Salt Lake City Council members told Building Salt Lake that their move to reject the hotel is not a sign of a changing approach to new developments. Instead, the hotel proposal vote was more of an anomaly.
Council Member Sarah Young, who represents Sugar House, told BSL she continues to welcome new projects, especially in a neighborhood like hers that’s slated for a number of new projects in the downtown core in the near future.
“We know that there’s more development coming in the core of Sugar House, so this isn’t a question of, ‘no, we don’t want anything else,’ that’s already coming, and we’re excited about that,” Young said.
She said her main sticking point with the proposal was the idea of expanding the neighborhood’s business district east of 1300 East, which she worried could set a precedent for more sprawling developments outside of the neighborhood’s downtown core.
“I think that if they were looking at opportunities and parcels within the areas we’ve already zoned for MU-8 and MU-11, it would be a great solution,” Young said of the hotel proposal. “But it’s sitting on the corner of our namesake park for a little community, it’s a different conversation.”
She added that during her time in City Hall, she’s seen the council actively looking to approve requests for zoning changes ahead of the mixed-use zoning overhaul. For Young, she wants to see how those changes play out in the community before deciding whether to make further changes to the neighborhood’s business core.
“It’s not to say ‘no, never,’ but it does feel a little premature for me to be saying, ‘we just opened the business core, and now we need to expand the core five months later,’” Young said to BSL.
A rendering of the proposed Sugar House hotel, which was rejected by the Salt Lake City Council. Image via Magnus Hotel Management and FFKR Architects
COUNCIL MEMBERS’ THOUGHTS
Other council members agreed that the failed hotel pitch is more of an outlier in their overall approach to development.
Council Member Alejandro Puy told BSL that he and other council members believed the public benefits included in the proposal didn’t seem to benefit the community enough. He said having paid parking as a community benefit seemed antithetical, as he believed that aspect wouldn’t benefit the neighborhood.
“Ultimately, I felt like we could do something better than that,” Puy said. “It is frustrating that the project didn’t go through, it is frustrating because I think everybody wants to see something there. This is one of the most beautiful parts of town but ultimately, we couldn’t reach an agreement.”
Puy said he was concerned about how the public would view the outcome of the vote. He told BSL he worried if the community would see the vote as a shift away from new projects, or if the vote would embolden people who don’t want to see change in the community.
“I worried when this vote came that many people might feel energized to stop us, or slow us down, or use their privilege to say, ‘this doesn’t belong in my backyard,’” he said.
Council Member Eva Lopez Chavez told BSL she took issue with the building’s egress points for both pedestrians and cars, saying it would create additional congestion to the nearby roadways. She also took issue with the building’s scaling and setbacks.
“I would have liked to see a little bit more design elements that give us those setbacks and really scale the development so that way, driving upon 21st (South) you’re not physically met by a wall,” she said.
She added that a hotel isn’t responsive to the city’s ongoing affordability crisis. Her preference for the parcel would be for a land swap, though she’s not certain that could be an option in the future.
“I have spoken with so many families that wanted to see a daycare or children centric activities, whether that’s retail or not,” Lopez Chavez told BSL. “I think at the cap rate we’re seeing, you’re going to get retail.”
Lopez Chavez was adamant that the parcel will be activated at some point, though any path forward would be tricky. The parcel’s low-density MU-3 zoning could cap any height at 40 feet, plus its high land value and existing ground lease with Maverik would pose financial challenges to any group that would want to build on the site.
THOUGHTS FROM EXPERTS
Walker Wood, vice president of development at Cole West, a Building Salt Lake advertiser, told BSL he was surprised to hear news that the hotel proposal was shot down. He said he believed a hotel use would be a good usage for the site, as a hotel would typically see less traffic than a different use like a multifamily building. Given the property’s size and proximity to the park, he said he’s not sure what could be developed there.
Wood said he doesn’t believe the council’s vote to reject the project would have a negative impact on other developments, noting the unique circumstances around that particular parcel.
“That (vote) doesn’t signal to me that the city is less development-friendly,” Wood told BSL.
Kip Paul, vice chairman of investment sales at Cushman & Wakefield’s Salt Lake City office, said it’s important to take a common sense approach to future projects, especially with controversial proposals like the hotel.
“Is this going to set the mode, the temperature, the mindset for moving forward? (It) could,” Paul said. “My two cents would be, there needs to be compromise, there needs to be balance. You can’t say no to everything, nor should it just be carte blanche to build whatever you want.”
FUTURE DEVELOPMENT VOTES
Andra Ghent, the Ivory-Boyer Chair in Real Estate at the University of Utah and a former member of the city’s Planning Commission, said it will be interesting to see how the City Council handles future proposals aimed at enabling more housing.
Ghent said there was little resistance from creating more housing Downtown, which is in part why there’s so much new supply. But in the future, it’s likely the council will move toward other proposals that will impact lower-density neighborhoods.
She cited the city’s upcoming Expanding Housing Options effort, which would alter R-1, R-2, SR-1 and SR-1A zones. The proposal would allow homes to be built on lots as small as 2,000 square feet per unit, city staff told council members in February.
Ghent said the proposal could be a gauge on how willing council members are to create more density around Salt Lake City, as the proposal is likely to ruffle some feathers in some pockets of the city.
Puy said the council will continue to have a pro-development approach, and as building new developments have led to tangible benefits like lowering rental rates and new amenities in different neighborhoods.
He said the Expanding Housing Options initiative is still in discussion among the council, and some members of the community have asked for more moderate zoning. Those conversations are still ongoing, but Puy said, “while we might be scared of what that means to our neighborhoods, they are positive, and we know that we can do them carefully.”
With budget season coming up and the city still wrangling with the fallout from the U.S. Immigration and Customs Enforcement buying a warehouse for a detention facility in Salt Lake City, Puy said it’s not clear when the R-1 overhaul ordinance could be brought to a vote. But he told BSL his goal is to pass the ordinance while he’s chair of the City Council.
“I do understand concerns, I do understand that sometimes we have to make smaller steps forward, but we have to make a step forward,” Puy said. “I’m not going to put it on the council agenda, until I know we are ready for it.”
A rendering of the walkway between the proposed Sugar House Hotel and Sugar House Park. Image via Magnus Hotel Management and FFKR Architects
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