Woodbury Corporation has finished converting an aging South Temple office building into apartments after using a state and federal tax credit incentive to add new housing Downtown.
Woodbury Corporation received an estimated $3.2 million in state and federal tax credits for its conversion of the IBM Building at 348 E. South Temple, a project that included adding a new building on the site along with retrofitting the existing office building.
The Utah State Historic Preservation Office announced final approval in June for both the 20 percent federal rehabilitation tax credit and Utah’s 20 percent state historic preservation credit at The Source. The two programs can only be stacked on income-producing residential rental property, which makes the office-to-apartment conversion the specific mechanism that unlocked both.
The state has said that developer awareness of the program is low, and that it’s possible to fund more projects that would involve preserving existing buildings with state and federal money.
Both credits are calculated at 20 percent of qualified rehabilitation expenditures — dollars spent on the historic building itself, not on new construction of a 161-unit, seven-story building hidden behind the IBM Building.
At a combined 40 percent, an estimated $3.2 million credit implies roughly $8 million in qualified rehab spending on the 20-unit north building.
Woodbury and FFKR began working with SHPO in late 2020, before construction, which is how these applications are supposed to run. Work started without approval is done at the owner’s risk.
The IBM Building was listed on the National Register in 2014 as a contributing property in the South Temple Historic District. It’s New Formalist — brick, concrete and glass — and its defining element is three stories of repeating concrete arches on the South Temple facade, among the earliest uses of post-tensioned concrete in Utah.
According to SHPO, the certified work included:
The arcade. The repeating arches and the narrow concrete columns between them were retained.
Barrel-vaulted ceilings. A dropped acoustic tile ceiling was pulled out, revealing the concrete vaults running north-south through each structural bay. The concrete was patched and refinished to replicate the original acoustic plaster look.
Terrazzo. Original flooring in the center bay of the first floor was protected during construction, then cleaned and rehabbed. New adjacent concrete flooring was designed to sit alongside it.
Railings and a new ramp. The first-floor balcony railing was too damaged to save. The replacement uses pedestals echoing the original with code-compliant pickets, and the same vocabulary carried into a new accessible concrete ramp on the north side.
The building’s curved eyelashes on the facade are actually structural components that support the three levels of the existing building, which was used by the Drug Enforcement Administration until the renovations.
The ground floor space between the existing and new buildings were designed to give a southern California exterior vibe, with the south-facing lower level units in the IBM Building sharing a courtyard at their front doors with the new building.
Interior amenity space in the historic building includes a bowling alley, a golf simulator and a cafe, with midcentury-styled common areas. The development also includes a main-level pool.
Amber Anderson, deputy state historic preservation officer, framed the award as an argument to other owners sitting on empty office space. Converting historic offices to housing produces some of the biggest returns her office sees, she said in a statement, both because the floorplates are often already broken into workable spaces and because residential rental use is the only route to capturing both incentive programs at the same time.
The Source opened in June. It sits in a small cluster of Downtown office-to-residential conversions that have moved since the pandemic — Seraph at South Temple, Arbor 515 and Maye House are all within a few blocks. Rents at The Source start around $1,299 for the smallest units, which run from roughly 373 square feet up to about 1,595. Studios, one- and two-bedrooms, plus five penthouse units on the top two floors. Three levels of underground parking under the tower.
0 Comments