Some supporters of the historic Utah Theater were shocked to learn Salt Lake City Mayor Jackie Biskupski had inked a deal to sell the dilapidated performance hall on Main Street.
The sales agreement, signed in early November, has set the proverbial stage for global real estate firm Hines and Utah-based developer Joel LaSalle to demolish the 101-year-old theater and build a 30-story residential skyscraper in its place.
Biskupski has said she wants to settle the theater’s future before leaving office in January. Her successor, Mayor-elect Erin Mendenhall, told The Salt Lake Tribune that having been part of these debates as a council member since 2013, she trusted Biskupski “to conclude the process in the best interests of city residents.”
City leaders could settle on a sales price as early as this Tuesday.
Some of the Utah Theater’s most ardent backers have accused the mayor and the city’s Redevelopment Agency of not adequately involving the public in key decisions.
“This was intentionally never done with the Utah Theater,” Ashdown wrote in an email. “Instead, the RDA staff and mayor have forced exclusive negotiations, inflated the cost of rehabilitation, and ignored the public at every turn.”
Interviews and internal memos obtained through a public-records request indicate that quirks in RDA policy, tax worries at City Hall and realities in Utah’s real estate markets all played a role in the theater’s potential razing.
Nonetheless, a top RDA official took issue with assertions that the city’s deliberations have been rushed or conducted behind closed doors, especially with the city’s long review of ways to preserve it.
“That’s hard for us to wrap our heads around when we’ve been struggling with this property for 10 years, and you’ve got a lot of staff time and energy that has been built towards trying to save this,” RDA Chief Operating Officer Danny Walz said.
Completed in 1918 and originally called Pantages Theater, the Utah Theater at 144 S. Main St. showcased top performing acts of the post-vaudeville era in its early decades, before becoming a movie hall.
The neoclassical theater on Main Street was reportedly the jewel of the Pantages chain, with inlaid marble floors, a deep inner chamber rimmed with balconies and plaster walls alive with gargoyles and other exotic figures that float on gold-colored filigree.
Today, the grand hall is in heavy disrepair due to age, extensive water damage and other setbacks.
On a public theater tour in 2014, Mendenhall’s leg went through a portion of the building’s second-level floor. She was uninjured.
The RDA began studying the shuttered venue’s possible resurrection shortly after it bought the property from Howa Construction in 2010, for $5.5 million. One early study looked into making it a new Utah Film and Media Arts Center.
That review, released in 2014, was one of several pointing to “significant barriers” to restoration. Structural changes by previous owners had dimmed the building’s odds of getting listed as an official historic site and qualifying for tax breaks, the study found.
It also noted high costs for seismic retrofitting, a lack of parking nearby — and the fact the RDA couldn’t find “an end user willing and able to partner on rehabilitation of the theater,” documents say.
Around that time, the RDA invoked a little-known rule that allows it to partner up with owners of property adjacent to its landholdings — without having to go through bid requests typical of other city contracts.
In late 2015 — just as then-Mayor Ralph Becker was about to leave office — the city signed on to exclusive negotiations with LaSalle, owner of 160 S. Main to the theater’s south. Among other advantages, the talks gave the restaurateur and owner of Golden Braid Books, the Oasis Cafe, Faustina and other notable Salt Lake City eateries an inside track on buying the property.
Behind-the-scenes negotiations at City Hall kept preservation on the table but also appeared to shift gears, toward building something new, memos suggest.
The city’s new economic development director, Lara Fritts, came on board in May 2016, overseeing the RDA and other departments. That September, she toured the Utah Theater and emailed Biskupski enthusiastically. “Wow, what an absolutely magnificent facility,” Fritts wrote, offering to arrange a tour for the mayor. She told Biskupski she had sought details on the finances of rehab projects involving similar theaters.
In early December 2016, Fritts emailed Biskupski’s executive assistant, Simone Butler, to get clarification about plans to demolish a portion of the property. Though on the job for nearly seven months, Fritts appeared not to be privy to all of the mayor’s thinking.
She wrote in that Dec. 9 note that it would be “very helpful in general” to understand “the mayor’s vision for the Utah Theater and being aware of any commitments that perhaps have been made or are in the works.”
A few weeks later, the city officially added Hines, owner of the historic Kearns Building just north of the Utah Theater, as a co-developer in its talks with LaSalle — a move that ramped up prospects for a major development.
Houston-based Hines is one of the largest privately held real estate development firms in the world— and the company has experience building skyscrapers.
Pay the price?
Costs loomed large in the Utah Theater debate well before the 2014 study by Salt Lake County, which estimated restoration costs — bringing the theater up to code, seismic work and restoring the interior, the lobby and entrance hall — at $42 million.
Then came updated projections on the cost of earthquake retrofitting, first from Okland Construction in 2017, then by Big D Construction the following year. That added between $14 million and $20 million to the price tag.
Walz said the RDA is also factoring in the surging trend for construction costs on the Wasatch Front, which he said have leapt about 25% in the past five years. “So that’s how you get from $35 million to $60 million real fast,” he said.
But Walz said that even the RDA’s conservative estimates highlight a $25 million to $30 million shortfall in what the city could put into the project without asking taxpayers to put up more.
Walz said Biskupski has opted against a tax hike to fund the Utah Theater, in light of a new $33 million per year city sales tax and a one-time $87 million bond for road improvements.
The city has also been reluctant to reapproach the community’s philanthropic donors for their help in saving the Utah Theater, he said, in light of their generous backing of the $119 million George S. and Dolores Doré Eccles Theater, completed in 2016.
How the poll died
By late 2017, discussions had ranged from turning the theater into a restaurant, a dinner theater, a live performance venue, a film hub, offices and a hotel. But without a definitive plan, the city extended its exclusive talks with LaSalle and Hines in early 2018.
But Walz told the board in September 2018 the agency intended to seek public input. Three-way talks ensued with the RDA, Preservation Utah and the city’s Downtown Alliance on an online survey.
By the accounts of key players, there were lengthy meetings to discuss poll questions, web staging and how to coordinate the survey with a new round of theater tours.
Dee Brewer, executive director of the Downtown Alliance, an arm of the Salt Lake Chamber, said the group got involved without a stake in the final outcome. “Our intention was to help with public input,” he said, “so all the options could be aired.”
Kirk Huffaker, former executive director of Preservation Utah, said he was grateful the meetings were convened but that as they proceeded, it was apparent RDA project manager David Arteaga “seemed to be reluctantly going along.”
Talks bogged down.
“We kind of felt that the RDA was constrained by something,” Huffaker said. “We didn’t know what it was.”
RDA spokeswoman Amanda Greenland said that “a potential public survey option was explored,” but “there were differences of opinion as to how to approach this survey and its content.”
Greenland said the RDA was under contract with Hines/LaSalle and the direction Preservation Utah sought for the survey — measuring support for raising taxes for preservation — “didn’t align with the RDA’s contractual obligations.”
So, the RDA pulled the plug, Greenland and Walz confirmed.
Framing poll questions with restoration in mind, Walz said, looked like a precursor to putting the issue to a formal public referendum, with potential to run afoul of the city’s talks with developers.
“It certainly would be a little disingenuous for us to be negotiating on the one hand, while on the other hand, pursuing other opportunities that may be a totally different direction,” Walz said.
By early 2019, contours of the skyscraper project were coming into sharper focus.
Hines and LaSalle have now submitted initial plans to build a 375-foot residential tower with about 300 apartments, retail spaces and a green walkway at least 15 feet wide that would extend westward from Main Street into the block.
City law gives Biskupski, as mayor, the authority to dispose of city-owned land, which let her proceed with signing the Nov. 7 sales agreement without specific approval from the RDA Board. The contract, according to Walz, is designed to maximize public benefits.
The RDA has offered to slash its $4.07 million sales price for the theater all the way to zero, in exchange for the affordable housing, walkway and reuse of theater artifacts in the new project.
That price write-down is set for more review and a vote by the RDA Board, made up of City Council members, as soon as Tuesday. It’s unclear what would happen to the deal if board members reject the write-down. Without their approval, Biskupski is only able to discount the 0.89-acre property by 10%, according to city documents.
Council members Andrew Johnston and Ana Valdemoros called on Biskupski at a Nov. 12 meeting to put the sale on pause while the city vets its remaining options; other members favor the sale.
Dustin Harris, senior managing director for Hines in Salt Lake City, said the company hasn’t decided if it will proceed with the skyscraper if the board nixes the land discount. But Walz said Hines and LaSalle would be able to go ahead “regardless of what action the board does or does not take” on the write down.
If the developers were to back out, Walz said legal covenants would require that any new construction there include the housing, walkway and recycling pieces of the theater.
“No one can build anything on that property unless they meet those agreements,” he said.
At 30 stories or more, the skyscraper also would need a waiver to city height limits of 100 feet on buildings that are located midblock in that portion of the central business district.
“The economics of the project are very much tied to the height,” Walz said.
The city and the developers are also figuring ways to incorporate iconic elements salvaged from the Utah Theater, including bricks and ropes, portions of its stage, an original signboard, its Tiffany atrium ceiling skylight, and some of the plaster sculptures. Hines has said it will devote up to $1 million toward reclaiming and reusing theater elements.
The RDA, Walz said, is also negotiating added public benefits with Hines and LaSalle, such as boosting the number of affordable apartments, setting aside office space for nonprofits and creating a publicly accessible park tied to the walkway. City Council members have sought to create a downtown park for years, Walz said, “and they saw this as an opportunity.”
The sales contract also will give the city the right to review and approve the Hines-LaSalle final development plan, when it emerges. If the building goes through, it will have a noticeable impact on Salt Lake City’s skyline. At a September meeting, Mendenhall and other board members urged developers to make the building, as the mayor-elect put it, “a true gem.”