Sugar House project fizzles in foreclosure
Financing » Plans were for hotel, condos on struggling Granite
block.
By Derek P. Jensen
The Salt Lake Tribune
Salt Lake Tribune
Updated:03/25/2010 08:08:23 AM MDT
Sugar House, reeling from a hole in its business center, took another hit this week when 5 acres of the Granite
Block fronting McClelland Avenue were sold at a foreclosure auction for $8.2 million.
The property, just west of developer Craig Mecham's stalled residential-retail-office project, was slated for a
six-story hotel and health club, along with 320 condos above shops and restaurants.
That was before California developer Red Mountain Retail Group, whose vice president last year proclaimed the
project "shovel ready," evidently lost its financing.
Now, any redevelopment of the old furniture warehouses and other structures between 2100 South and Sugarmont
Drive (2225 South) is on hold.
"It's unfortunate," City Councilwoman Jill Remington Love said. "It sounded like the type of project the City Council
would embrace."
Despite some concern about traffic and size, the Planning Commission approved Red Mountain's plan in January
2009.
Now, because the city's redevelopment district status expires for the area in four years, City Hall is under pressure
to finalize a new development contract for the Sugar House business district.
"The clock is ticking," Love said.
Frank Gray, the city's director of community and economic development, said Red Mountain was having difficulty
holding the property before the bank recently took it back.
"We knew that there was a possibility that this might occur," he said.
Gray notes SA Challenger Inc., the Minnesota corporation that purchased the multiple parcels, may pursue the
same building plan. "What I understand is this new group has taken over Red Mountain's position, and they are the
new developer," he said. "We have not had any contact with them."
Attempts to reach representatives of Red Mountain and SA Challenger were unsuccessful.
It is unclear whether the foreclosure includes the Granite Furniture showroom on the corner of 2100 South and
McClelland Avenue. The showroom was listed on Red Mountain's development plan, but neither Gray nor the city's
Redevelopment Agency could say whether it has switched hands.
Elsewhere in Sugar House, the six-story Urbana on Eleventh condo tower is nearly complete at 1988 S. 1100 East.
Another developer hopes to erect an eight-story building with ground-level shops and offices, topped by about 150
units of student housing, between 1193 E. and 1233 E. Wilmington Ave. This project also calls for a community
garden and an ice rink.
In January 2009, Red Mountain Vice President Eric Nelson told the Planning Commission the financing was in place
and the project was "shovel ready."
But, like Mecham, who has been unable to secure financing to rebuild the vacant corner of 2100 South and
Highland Drive, the recession appears to have claimed another commercial project.
When pressed 14 months ago whether Red Mountain actually had the financing, Nelson replied, "I do today."
djensen@sltrib.com
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