North Temple project troubled by unpaid contractors and receivership gets closer to sale

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Two electrical contractors have sued the developer and the owners of the Lusso apartments at 1025 W North Temple for nearly $800,000 for breach of contract.

The Woods Cross-based Salmon Electrical filed suit in Salt Lake County District Court, alleging that DG Construction Services, acting as the alter ego of Lusso Apartments, has “failed, despite demand, to pay Salmon for the construction labor, materials, and equipment” used on the project.

The market-rate project is in the North Temple transit corridor, a Redevelopment Agency project area, and an Opportunity Zone, which has made it one of the city’s most rapidly developing areas.

Salmon Electrical seeks “at least $721,861.44, plus interest in the statutory rate of 10% per annum from August 23, 2023” in addition to attorney’s costs.

Also implicated in the complaint are the project’s financiers, BRMK Lending SPE, LLC.  In February, Broadmark Reality Capital (BRMK) was merged into Ready Capital, which apparently pulled its support from the project, sending it into receivership.

The main defendant in the suit, developer and general contractor Donovan Gilliland, said the building was for sale and all contractors would be paid at closing.

“My bank got bought out by another one, and we put the project up for sale,” Gilliland told us. “It’s under contract to close on May 31.”

The lead attorney for Salmon Electrical, Curtis J. Brown, did not answer a request for comment on whether the developer’s promise would change his client’s course of action, which includes a lien on the project.

The Lusso seen from North Temple. Photo Luke Garrott | Building Salt Lake

Despite the project’s financial troubles, work at the site has recently resumed. Gilliland said that the new buyer, who he would not name, advanced funds so that cladding and winterization could be applied to the building.

DG Construction Services, based in Farmington, is credited with building two medium-sized residential projects in Layton in 2020. The Lusso is its first project in Salt Lake City, and occupies an important corner in the North Temple transit corridor directly across the street from the State Fairpark’s main entrance.

Gilliland told us that Lusso 2, the project’s second phase, is also under contract to be sold, scheduled to close “about the same time.” Lusso 2 received design review approval by the Planning Commission in October of last year.

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Posted by Luke Garrott

Luke Garrott, PhD, has published in The Salt Lake Tribune and the Deseret News, and written features for the Salt Lake City Weekly City Guide and The West View. A former two-term councilman in Salt Lake City's District 4, he lives in Downtown Salt Lake City and grew up in the Chicago area.