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Scott G Winterton, Deseret News, File

Biskupski says she wasn't aware of Sugar House site's $7 million price

By Katie McKellar  |  Posted Jan 14th, 2017 @ 7:56am


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SALT LAKE CITY — Amid Salt Lake County Mayor Ben McAdams' public concerns about the $7 million cost of the Sugar House site for a homeless resource center, City Council members say they didn't know the price tag until after it was revealed in media reports.

Apparently, City Council wasn't the only one in the dark.

Mayor Jackie Biskupski says she didn't know the dollar amount.

"The price was not revealed to me either," the mayor told KSL Thursday when asked about why council members weren't aware of the price.

Biskupski said once she and the council made a "solid commitment" to the Simpson Avenue site, her team was simply charged with executing negotiations, using the up to nearly $12 million the Salt Lake City Council had allocated in Redevelopment Agency Funds to secure the purchase agreements.

A price "threshold" for individual sites was never discussed with her real estate team or the City Council, Biskupski said.

When asked why the mayor wouldn't know the specifics of the price in a follow-up interview Friday, her spokesman, Matthew Rojas said Biskupski "had faith in her team to negotiate a fair deal."

"We have a team of real estate experts who, frankly, know better than the mayor and other elected officials of how to purchase property at a fair market value," Rojas said. "They were told to secure the land that would make this a success at the best and most reasonable price, and that's exactly what they did."

But some City Council members, echoing McAdams, worry $7 million is a high price to pay for a homeless resource site — more than twice the $3 million price negotiated for the 275 W. High Ave. site.

City Council Chairman Stan Penfold said the council did not know the price tag until after it was revealed in media reports.

"None of us knew," City Councilwoman Adams agreed, adding that the price negotiations weren't up to the council, only the mayor's office. She said she requested the figures from the mayor's office but found out the same time the public did.

"It's the unspoken thought that (the administration) would use tax dollars wisely and make a prudent decision," she said.

City council members and Mayor Jackie Biskupski listen to public comment at a city council meeting at the City and County Building in Salt Lake City on Tuesday, Jan. 03, 2017. (Spenser Heaps, Deseret News, File)

The Salt Lake County Assessor's Office values the 2.8-acre Sugar House property at about $2.7 million, but Mike Reburg, the mayor's director of community and neighborhood development, said the city's real estate team made a realistic and fair offer based off of Sugar House's market. Local appraiser Tom Mulcock has also said assessed value is rarely a fair value in a hot market like Sugar House.

"We did our due diligence. We knew what prices in the area for commercial property were going for, and based off of that broker expertise we made an offer," Reburg said.

But City Councilwoman Erin Mendenhall said she felt "blindsided" by the price and even more concerned that Biskupski didn't know the cost.

"She is the CEO of all administrative function in our city. For her not to have the details of million-dollar deliberations disclosed to her are astounding to me," Mendenhall said. "We have to rely on them as an administration. It's her team. I'm just reeling from this."

Both Adams and Mendenhall oppose a homeless resource center on Simpson Avenue, which has drawn outrage from neighbors. They say it it's not too late for the city to forfeit the $10,000 it placed in earnest money on the site to abandon the purchase agreement and consider another property.

While Penfold and other council members have said they support the Simpson site because it meets the criteria for a suitable homeless resource center and adds to the city's "scattered site" aim, the councilman also worries the site's price may "create some challenges" as city officials figure out the homeless site budget.

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"It's really important that we're really aware of the cost, and it's problematic to start off with a significantly higher cost than any of us anticipated just for property acquisition," Penfold said.

Penfold said the City Council allocated $12 million for site acquisition but expected that the funds may have been used to secure more than four sites to give city leaders more options.

But Mendenhall and Adams say it's not just the price tag that gives them pause, but everything else they found out about the site after the City Council and the mayor agreed on the four sites.

For example, Mendenhall said, the council had no knowledge that the Lit'l Scholars preschool had a lease on the site extending through 2019 and that the $7 million price would include $300,000 to settle a lawsuit between the property's owner, Forest Company, and the Utah Transit Authority.

"The council in our deliberations did not receive adequate information on the property, and it's becoming ever more clear that this site has problems," Mendenhall said. "The lack of information that was shared with us just continues to grow."

Mendenhall said in hindsight, she wished all city leaders would have toured all four of the sites before making their decision.

"I don't know if the administration knew all of this going into it, but I really wonder if the council had known all that, they would have still wanted the site," Adams said.

But Councilmen Charlie Luke and Andrew Johnston said the Simpson Avenue site was specifically selected in order to facilitate a safe neighborhood for populations with children, while also creating a site in Salt Lake City's east side.

"The price is high, but I think wherever we looked (on the east side), it was bound to be expensive," Luke said.

Biskupski pointed out the Simpson site is large enough to perhaps build affordable housing in addition to the homeless resource center, so private dollars could help offset the cost.

"That's a bigger discussion that needs to happen," she said. "We'll take a look at that and have that dialogue with the council."

Katie McKellar
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