Transmittal - 6/2/2023CITY COUNCIL TRANSMITTAL
________________________ Date Received: _________________
Lisa Shaffer, Chief Administrative Office Date sent to Council: _________________
______________________________________________________________________________
TO: Salt Lake City Council DATE: June 1, 2023
Dan Dugan, Chair
FROM: Blake Thomas, Director, Department of Community and Neighborhoods (CAN)
__________________________
SUBJECT: Update on the status and disposition strategy for 8.75-acres of city-owned
property located between 300 and 400 West and between 800 and 900 South, also known as the
Fleet Block.
STAFF CONTACT: Tammy Hunsaker, Deputy Director, Community and Neighborhoods
801-535-7244, tammy.hunsaker@slcgov.com
DOCUMENT TYPE: Information only
RECOMMENDATION: Briefing and policy discussion
BUDGET IMPACT: N/A
BACKGROUND/DISCUSSION: The City is working to transform the 8.75-acres of
underutilized City-owned property located between 300 and 400 West, 800 and 900 South
(“Fleet Block or “Property”) into community assets that will contribute to the economic, social,
and environmental betterment of the city. While it is the Administration’s role to dispose of
property, such as through a request for qualifications (“RFQ”) or request for proposal (“RFP”)
process, it is the Council’s role to approve any rezones for the property and to approve any
forthcoming budgetary items. Additionally, there are legislative functions tied to designating the
size and location of parks and public squares. Accordingly, the Administration has provided a
series of briefings to the Council in order to rezone the Property, designate public space, and
gather policy direction on redevelopment goals.
Since the last briefing in November of 2022, a multi-departmental team comprised of
Community and Neighborhoods (“CAN”), the Mayor’s Office, Public Lands, the Arts Council,
and Sustainability has been working on various aspects of planning for development of the
Property. The team has identified the general placement of land uses for the Council’s feedback,
ERIN MENDENHALL
Mayor
DEPARTMENT of COMMUNITY
and NEIGHBORHOODS
Blake Thomas
Director
SALT LAKE CITY CORPORATION
451 SOUTH STATE STREET, ROOM 404
P.O. BOX 145486, SALT LAKE CITY, UTAH 84114-5486
WWW.SLC.GOV
TEL 801.535.6230 FAX 801.535.6005
06/02/2023
06/02/2023
Lisa Shaffer (Jun 2, 2023 09:34 MDT)
with the intent of subdividing the Property into public space and three development sites.
Currently, the Administration is requesting that the Council:
1) Approve the rezone as provided through a separate transmittal. The legislative function of
rezoning the Property must be finalized prior to initiating an RFQ/P process to ensure that
procurement processes are based on an approved zoning district.
2) Indicate support for the Fleet Block public space to be located on the southeast quadrant
of the block as demonstrated on Exhibit A – Fleet Block: Proposed Location of Public
Space. If the Council is supportive, the Department of Public Lands will return to the
Council at a later date to formally designate the public space as either a public square or
park.
3) Provide any final policy direction on the development plan and budgetary considerations
prior to the initiation of an RFQ or RFP process.
If the Council indicates support for the location of the Fleet Block public space, Public Lands
will initiate a robust planning process for the design and development of the public space. This
process will build on engagement work that has already been completed, through Reimagine
Nature, Art Healing efforts relating to the murals, among other efforts. Subsequently, CAN will
lead the effort to subdivide the Property and prepare the development sites for an RFQ/P process.
Sustainability is advising on the environmental cleanup, and the Mayor’s Office, the Arts
Council, and Civic Engagement have been involved in community engagement efforts.
Site Plan and Public Space
The Property is challenged with several redevelopment barriers and there are pros and cons for
the placement of land uses. Redevelopment barriers include the high voltage power lines that run
along 800 South, various types and intensities of environmental contamination scattered across
the Property, and budget constraints for developing and upgrading public infrastructure.
During the last briefing, the Administration presented a hypothetical development scenario that
placed the public space on the northeast quadrant of the block. At th at time, the Administration
proposed that location to honor the community-led murals that were initiated first on this corner
with the depiction of George Floyd. Also, open space may be more compatible than other land
uses with the high voltage powerlines that run along 800 South, as the powerlines will limit the
height of development and/or require setbacks to ensure that there is adequate aerial fire access.
Council Members had mixed opinions, with some Members supporting the placement on 300
West 800 South and other Members supporting the placement on 900 South to be co-located
with the forthcoming Green Loop and 9 Line.
Currently, after considering the Council’s feedback and completing additional analysis, the
Administration is recommending that the public space be located on the south end of the block,
on the 300 West 900 South corner - refer to Exhibit B: Proposed Site Plan. The location of the
public space on the southeast quadrant will not only support the Green Loop and 9 Line, but a
shade and shadow analysis indicates that this site will have less shade in the winter , thereby
making the public space more usable year-round. While locating two of the development sites
along 800 South may require design concessions to ensure adequate fire aerial access, the
Administration believes that the benefits of locating the open space on the southeast quadrant
outweigh the resulting cons.
Midblock Infrastructure
Midblock connections are proposed to bisect the block into four quadrants, as called fo r in the
Downtown Plan, the community plan for the area. As Demonstrated on Exbibit B: Proposed Site
Plan, two of the four midblock segments, as highlighted in orange, are to be funded and
developed by the City concurrently with the development of the public space. The other two
midblock segments, the northern and western segments, will be developed in coordination with
the northern two development sites.
The ultimate goal is to have all of the midblock connections owned and maintained by the City,
which will ensure the public’s rights to access and use the space to the greatest extent possible.
Funding for these two segments could be leveraged from the land value of th e adjacent
development sites or acquired through a forthcoming capital improvement program (“CIP”)
request. Three of the midblock segments are proposed to be open to motor vehicles, while the
southern segment will be integrated into the public space with limited vehicular access to draw
pedestrians and bicyclists from the Green Loop into the block and public space.
Budget Considerations
The land value is the City’s most significant tool for leveraging public benefits. In January of
2022, the Property appraised for $37,500,000, or $98.39 per square foot, not considering
environmental contamination costs. Based on the proposed site plan, the appraised value
allocated by land use is as follows:
LAND USE ACRES LAND VALUE
Public Space & Midblock Connections ~4 $17,142,857
Development Sites ~4.75 $20,357,143
Total 8.75 $37,500,000
It is important that the Council and Administration coordinate on budget considerations as the
development process moves forward. Since the Council was last briefed on Fleet Block, CAN
completed a study by Common Ground Institute and Urban 3 on the Public Asset Yield (“PAY”)
model. Through the PAY model, which can be similar to an urban wealth fund model, cities
develop underutilized properties as income-generating uses such as residential, office, and
mixed-use communities. The revenue generated is then invested into public benefits that are
either developed on or off-site from the income-generating use(s).
In general, there are two options to transform the land value into public benefits, as follows:
1. Land Sales Proceeds: The first option is to sell property and utilize the sales proceeds as a
capital investment to build on-site public benefits. This option allows for sales revenue to
be captured upfront and invested into the development of the Property. Under a land sales
scenario, a portion of the Property would be sold at market rate for income-generating
uses. Then, the sales proceeds are utilized to construct public benefits, such as
environmental remediation, and the development of capital infrastructure such as public
space, streets, multimodal amenities, affordable housing and commercial space. The
following demonstrates how this option can not only incentivize public benefits but allow
for development of infrastructure an environmental remediation with fewer budget
allocations from other City resources.
2. Ground Lease Proceeds:
The second option is to issue a ground lease to an income-generating development and
capture lease revenue annually over time to implement public benefits. As such, rather
than fund on-site capital improvements and affordable housing and commercial
development, this type of revenue could be used to capitalize City-administered
programs, maintenance for the Property, or programs that are created specific for the
Property such as operating subsidies for commercial tenants or rental assistance to
residential tenants. While this scenario provides ongoing revenue, capital to develop
infrastructure, remediate environmental contamination, and construct public benefits
needs to be secured in order to develop the Property.
Example: Land Sales
Proceeds Scenario
Example: Ground Lease
Proceeds Scenario
RFQ/P Process
The three development sites will be marketed competitively through either an RFQ or RFP
process. The process for procurement will depend on the goals of each development site.
Considerations include the following:
• RFQ: Focuses on establishing relationships with development teams that have an ethos
that aligns with that of the City and community. Fleet Block’s multiple development
barriers present uncertainties that will need to be navigated. Through an RFQ process, the
City and community would select development teams to navigate uncertainties through
an ongoing partnership, allowing more room for the ultimate project to vary. While
general design and financial aspects would be required through the RFQ process, specific
elements would be established through a collaborative process.
• RFP: Rather than being focused on the development partnership as with and RFQ, an
RFP process focuses on selecting a particular development proposal that includes specific
design and financial components. Since a specific development proposal is selected, there
is less room for the selected project to evolve as development uncertainties are uncovered
and dealt with. However, there is more assurance regarding project specifics upon
selection of a project proposal through an RFP process.
The forthcoming procurement and development processes will include requirements to ensure
that the ultimate development provides economic opportunities, affordable living, and cultural
expression for all residents, particularly communities of low- and moderate-income and persons
who are minorities. The City will continue to involve underrepresented communities in the
development process through the following:
• Inclusive Selection Committee
Establishment of selection committees, that will be responsible for evaluating,
ranking, and selecting proposals, inclusive of community representatives from
diverse backgrounds along with City representatives.
• Community Benefit Agreement
Implementation of Community Benefit Agreements (CBAs) between the
developers and community-based organizations representing residents’ interests.
The agreements shall define the benefits the co mmunity will receive in exchange
for supporting the project.
• Metrics & Outcomes
Identification of metrics to track and measure the development’s outcomes to
provide accountability for the City and developer. Potential metrics may measure
indicators such as affordability, underrepresented populations, climate resiliency,
community health, and social and economic justice.
EXHIBIT A: Fleet Block – Proposed Location of Public Space
EXHIBIT B: Proposed Site Plan