Council Provided Information - 12/12/2023The Front HQ
RDA Loan Application
December 12, 2023
1420 S 400 W
1450 S 400 W3.85 Acres
Phase I
•Fitness studios
•Bathrooms & showers
•Climbing training area
•Mechanical and
electrical replacement
•Large windows
Phase II
•Climbing walls
•Building connection
•Fire suppression
•Mechanical and
electrical replacement
•Large windows
Phase III
•Fire suppression
•Bathrooms
•Courtyard access
•Mechanical and
electrical replacement
•Large windows
Why RDA Loan ?
•Several loan application denials
•Uncertainty in the market,
especially with opportunistic
investments like climbing gyms
•Bank desire to refinance entire
The Front HQ complex with a
higher interest rate.
•In RDA State Street Project
Area and aligns with State
Street CRA Plan
Public Benefit Criteria Commitment
Public Amenities Significant public art amenity on exterior of building; RDA policy requires
1.5% of loan ($30,000) be spent on art
Adaptive Reuse Repurpose 1420 South and 1450 South warehouses
Permanent Job Creation 30-40 new jobs, starting at $15/hr or higher
Transit Alternatives Showers, lockers, indoor bicycle parking, and a car sharing parking stall
Economic Impact Dedicate 100% of space to locally-owned business
Sustainability*Net-zero electric operations through Rocky Mountain Power Blue Sky
program and rooftop solar
Utah Business and RMP Blue Sky Green Small Business Legacy Award
Efficient design models 24% decrease in electricity consumption and 21%
decrease in overall utility costs compared to code baseline
Architecture & Urban
Design**
Large windows, masonry walls, landscape buffer between gym and I-15,
parking lot converted to outdoor plaza
*Unable to meet Sustainable Development Policy due to unique circumstances related to facility type
**Unable to meet Architecture & Urban Design because project is already underway; no opportunity for feedback and changes
Exception Requests
Sustainable Development Policy
Unable to calculate score for Designed to Earn the
Energy Star program; unable to compare EUI score
with corresponding 90th percentile score
Installing natural gas-powered heating system due to
ceiling heights
Public Benefit Criteria Minimum
Meets five of the six public benefit criteria required to
qualify for primary financing
Sources
$3,000,000 –Owner’s Equity
$2,000,000 –RDA Loan
Uses
$5,000,000 –Construction Costs
Phases I-III
Proposed Loan Terms
Amount -$2,000,000 (40% LTC)
Interest Rate –5.30%*
Term –3 Years
Amortization –20 Years
*exact interest rate determined at closing
Collateral
Value*Debt**LTV Equity
As-is $ 8,440,000 $ 3,603,140 43%$4,836,860
As-Built***$ 11,300,000 $ 5,603,140 50%$5,696,860
*November 1, 2023 appraised values
**June 30, 2023 balances
***Assuming construction complete on Phases I-III
Lien on 1420 South and 1450 South ($4.8m to $5.7m in equity based on Nov 2023 appraisal)
Personal guarantee