Sandy City will soon own a nearby office building, as the city council recently voted to purchase a two-floor office structure to the southeast of City Hall.
The Sandy City Council, voting as the city’s Redevelopment Agency then as the council, voted last month to approve the purchase of the Arbor Plaza office building, located at 126 Sego Lily Drive.
Arbor Plaza was built in 2008 and has 14 separate office suites at its current buildout totaling over 66,000 square feet, according to a slide deck presented to the council on Feb. 10. As of that date, over 52,000 square feet was leased and around 13,800 square feet was vacant or available for lease.
Buying the Arbor Plaza building was borne out of the city’s need for additional office space. City staff said during a Feb. 10 meeting that between the police department, parks and recreation and arts guild, Sandy City was in need of roughly 29,700 square feet of office space. The purchase would chip away at that needed space deficit.
The purchase price would be $12 million. Of that total, $5.125 million came from RDA funds, and Sandy City will pay an additional $1 million to the RDA over the next 20 years, according to a cooperation agreement between the city and RDA.
Members of the council were briefed on the potential sale on Feb. 10 and voted on the proposal the following week.
During the Feb. 17 meeting, Council Member Brooke D’Sousa explained the deal wasn’t a typical purchase for the city, as the acquisition was supported by a revenue bond and repayment of that bond would depend on the performance of the building. Because the building has private tenants, the bond financing is not tax-exempt, D’Sousa said, which increased the borrowing costs and financial risk of the deal.
“So in other words, this is a redevelopment investment that must perform financially for multiple reasons, and it’s not simply a municipal facilities expansion,” she said.
Prior to a vote to buy the building, some council members and Mayor Monica Zoltanski clashed over whether the building’s oversight and management was within the purview of the council or mayor’s office. After pausing the meeting to discuss with city staff and legal counsel, the city council voted on a measure that would give management and oversight of the building to the mayor’s office.
Ultimately, the council voted 4-2 to pass an ordinance giving a final approval for the sale. The current property owners are in the process of finishing repairs on the building, and the closing date is slated to be March 13, according to a Sandy City spokesperson.
Sandy City will likely see new developments in this area in the coming years. Land to the south of city hall along the Sandy Promenade will potentially be developed into a mixed-use project, consisting of affordable housing units, office space and ground floor retail space.
The Arbor Plaza office building, highlighted in yellow. The red building to the northwest is Sandy City Hall. Image via Sandy City
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