The city is preparing to sign deal for new USA Climbing HQ, hoping to spark Station Center development

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After pulling the item from its January meeting, the Redevelopment Agency Board heard the plans for a land-lease and development agreement with USA Climbing for a public-facing headquarters at 310 S. 500 West on Tuesday.

It was the last chance for the City Council to comment on the terms before authorizing staff to negotiate final language and sign a contract with the nonprofit that oversees competitive rock climbing in the country.

Controversy over USA Climbing’s revenue model has delayed the project’s approval at City Hall. While providing training facilities for national-caliber athletes, the USAC HQ will also sell memberships and day passes to the public.

In January we cited a story in Climbing Business Journal that the federation received a letter from 75 owners and operators of gyms nationwide expressing disdain for the project as proposed. Local opposition has been led by the owner of The Front Climbing Club, which has also been negotiating with the RDA for a $2 million construction loan at the same time the city was negotiating with USA Climbing.

On Tuesday, RDA staff presented the same terms of the loan and development agreement as were prepared for the January meeting, and promised to return next month for the Board’s final approval. 

It appears likely that USA Climbing will become the first anchor of the newly rebranded Rio Grande district.

Project outline

The USAC National Training Center is estimated to cost $30 million, and will be anchored by a new primary structure “about 65-75 feet tall with a roughly 45,000 sf footprint,” according to RDA documents. The new building will include “bouldering, lead, and speed climbing walls, as well as other support uses that are typical of a climbing facility.” The exterior wall of the building would also be used for climbing.

As for public benefits, USAC has promised the RDA that “most areas of the facility will be accessible by the community,” while “some spaces will be reserved for the U.S. National Team’s exclusive use.”

In addition, the project incorporates the historic Salt Lake Mattress Company building, which the RDA owns and spent $865,000 to stabilize after the March 2020 earthquake. The bow-truss building will be “rehabilitated” and “anticipated to include publicly facing and accessible food, beverage, and retail uses, as well as private spaces for USA Climbing offices.”

Finally, the USAC national training center campus will include an outdoor plaza that will be “utilized for USA Climbing-hosted competitions as well as other non-USA Climbing events, and will be designed to accommodate 3,500–5,000 spectators.”

Terms of the lease and development agreement

The city has offered a 99-year land-lease with a 50-year renewal option. 

For the first six years, the RDA will charge nothing. Then, at year seven, lease rates will start at 45% of market value, and be increased 5% each five years until it reaches 60% of market value at year 10, where they will stay until year 99. 

That value to the RDA is calculated to be $227,426 in yearly rent payments from year 10 to 99.

Staff noted Tuesday that the 5% increase is meant to account for opportunity costs, calculated as the fee simple fair market value of the property times 5%, the equivalent of putting the value into 30-year US Treasury Bonds.

Lease rates will also be escalated according to inflation, at a minimum of 2% and a maximum of 5%.

USA Climbing will not have to pay rent on the outdoor plaza and stadium space.

The development agreement also has some key performance requirements for USA Climbing and the RDA:

-USAC will take on the responsibility of paying the up-front costs to rehabilitate the historic Salt Lake Mattress Building, for which the RDA will reimburse up to $6 million.

Salt Lake Mattress Building, courtesy SLC RDA.

-USAC will pay the up-front costs of demolition of the former state archives storage building, for which the RDA will reimburse up to $120,000.

-USAC will pay the up-front costs of environmental mitigation, for which the RDA will reimburse up to $200,000.

-The RDA will pay for public infrastructure costs associated with the reconstruction of 300 South from 500 to 600 West, including mid-block street segments.

The agreement also includes a community benefits plan that aims at maintaining the operation of the public-facing elements of the project. Performance is set to be reviewed at five year intervals.

Board reaction

“Everybody is anxious to see something happening in this area,” expressed Board Chair Ale Puy (D2), a sentiment that was echoed by other Council Members. 

Puy and District 5’s Darin Mano worried about the city’s position if the project’s business model should fail – either during development or operation.

“I’m in agreement with the rest of the Board and staff about the excitement about something happening in Station Center–sorry, what are we calling it now, at the Rio Grande–so certainly I’ve been anxious to have a development there for a very long time,” Mano said.

The USA Climbing site is right-center, labelled “Potential Anchor Tenant.” Courtesy SLC RDA.

Mano continued, “This is a really key property in the city, so I just want to make sure that we have the ability to control the land and should something go wrong or the project not have the community benefits that we want. I would be really interested in what the remedies are because the problems of failure on this site are much bigger than on other properties.”

RDA Director Danny Walz told the Board that the city has a number of remedies for lack of performance in the term sheet. Those include “filing a breach of contract claim, terminating the ground lease, damages, injunctive relief, or any other remedies available at law.” 

District 7’s Sarah Young expressed regret that the project’s design looks to construct a “very tall building to accommodate the climbing component.” 

“Whatever attention we can pay to activation 360 degrees” will help avoid making the mistakes that the city is trying to undo in other areas, she said–seemingly referring to the back side of the Salt Palace and planning currently going on for the Sports, Entertainment, and Convention zone around the Delta Center.  

Those concerns, however, do not look likely to transform into any opposition at the Board level. Staff committed to have a transmittal ready to be voted on at the RDA’s July meeting.

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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.