SALT LAKE CITY HISTORIC LANDMARK COMMISSION Minutes of the Meeting
Held at 451 South State Street, Room 126
No field trip was scheduled.
Present from the Historic Landmark Commission were Wayne Gordon, Magda Jakovcev-Ulrich, William Littig, Vicki Mickelsen, Sarah Miller, Alex Protasevich, Amy Rowland, Soren Simonsen, Mark Wilson, and Robert Young. Scott Christensen, Oktai Parvaz, and Robert Payne were excused.
Present from the Planning Staff were Cheri Coffey, Planning Programs Supervisor, Elizabeth Giraud and Nelson Knight, Preservation Planners.
Mr. Simonsen, as Acting Chairperson, called the meeting to order at 4:00P.M. Mr. Simonsen announced that each item would be reviewed in the same order as listed on the agenda. He said that instructions for the appeal's process were printed on the back of the agenda. So that there would be no disruption during the meeting, Mr. Simonsen asked members of the audience to turn their cellular telephones off.
An agenda was mailed to the pertinent people and was posted in the appropriate locations in the building, according to the open meeting law. A roll is being kept with the minutes of all who attended the Historic Landmark Commission meeting. The minutes are presented in agenda order, not necessarily as items were presented at the Historic Landmark Commission meeting. Tapes of the meeting will be retained in the commission office for a period of one year, after which they will be erased.
APPROVAL OF MINUTES
Mr. Young moved to approve the minutes from the April18, 2001 meeting. Ms. Jakovcev-Ulrich seconded the motion. Mr. Gordon, Ms. Jakovcev-Ulrich, Mr. Littig, Ms. Mickelsen, Ms. Miller, and Mr. Young unanimously voted "Aye". Mr. Christensen, Mr. Parvaz, Mr. Payne, Mr. Protasevich, Ms. Rowland, and Mr. Wilson were not present. Mr. Simonsen, as Acting Chairperson, did not vote. The motion passed.
COMMENTS TO THE COMMISSION
Mr. Simonsen stated that public comment for any item not on the agenda would be taken at this time. He asked those in the audience, who wished to address the Historic Landmark Commission, to complete the public meeting registration form. The public made the following inquiries, concerns, and comments:
Ms. Bonnie Mangold, who resides at 326 No. Almond Street, stated that she would like to comment about the landscaping project that was currently going on at the McCune Mansion at 200 North Main Street. She said that she did not recall that details of the proposed masonry paving materials, to be used in the landscaping, were discussed. Ms. Mangold expressed her concerns that there are four different masonry types and paving pattern materials being used that appear to be out of character with the existing masonry and which she did not believe were appropriate. She circulated photographs of the project to members of the Commission and staff. Ms. Mangold pointed out that colors, the square angles of the pattern, and the type of materials seemed to be conflicting with each other. She suggested that more control should be exercised over the landscaping materials for similar projects in the future. Mr. Littig said that the Commission looked at the plans and discussed the change in the historic fabric, but he said he did not remember the specific details of the proposed materials. He said that he believed it was an oversight on the part of the Commission.
Mr. Simonsen suggested that staff review the application to be certain that the materials were not in conflict with what was approved. He thanked Ms. Mangold for her comments.
Upon hearing no further requests to address the Commission, Mr. Simonsen closed this public open forum portion of the meeting.
PREVIOUS BUSINESS
Case No. 007-01B. by Ken Holman of Overland Development Corporation, requesting the Historic Landmark Commission adopt its previous findings of economic hardship relating to American Housing Corporation's proposal from 1998 and 1999, pertaining to Overland Development Corporation's request to demolish fourteen (14) contributing structures on Block 38. Plat B. Salt Lake City Survey, in the Central City Historic District, including the structures at 326 South 600 East (Stephen M. Covey Apartments). 334 South 600 East (Mary Ann Mumford House). 340 South 600 East (Juel Apartments). 550 East 300 South (Mozart Apartments), 558 East 300 South (Frederick Fail House), 321 and 331 South 500 East (Lunt Motel Annex). 517. 524. 527. 528. 532. 533. and 538 East Vernier Place (single-family houses) in the Central City Historic District.
Ms. Giraud turned her presentation over to Ms. Coffey who authored the memorandums that were sent to the Commissioners.
Ms. Coffey referred to her memorandum of April 27, 2001, of which a copy was filed with the minutes. She said that on March 21, 2001, the Historic Landmark Commission denied Overland Development Corporation's request to demolish fourteen (14) contributing structures. She said that Overland Development Corporation, represented by Ken Holman, is now proceeding through the economic hardship process to receive approval for demolition. She pointed out that as part of this process, Overland Development Corporation is requesting that the Historic Landmark Commission adopt its previous findings of economic hardship, relating to American Housing Development Company's Winthrop Court proposal from 1997 to 1999. The minutes and the Economic Review Panel reports for each of the three cases the Historic Landmark Commission reviewed between 1997 and 1999, as well as American Housing Development Company's complete economic hardship application and accompanying paper work was filed with the minutes of this meeting.
Ms. Coffey indicated that between 1997 and 1999 the Historic Landmark Commission reviewed three separate cases for demolition: 1) Case No. 014-97 included the Mozart Apartments at 550 East 300 South, the Stephen M. Covey Apartments at 326 South 600 East, and the Mary Ann Mumford House at 334 south 600 East; 2) Case No. 024- 98 included the two buildings that comprised the Lunt Motel Annex at 321 and 331 South 500 East; and 3) Case No. 026-98 517 included the single-family houses at 524, 527, 528, 532, 533, and 538 East Vernier Place. Ms. Coffey pointed out that in all cases, the Economic Review Panel found an economic hardship and the Historic Landmark Commission approved the acceptance of the findings of fact of the Economic Review Panel to demolish all the structures.
Ms. Coffey said that the Historic Landmark Commission approved the demolition of the Frederick Fail House at 558 East 300 South at the December 3, 1997 meeting, after overturning some of the findings that staff had made which created a situation in which the proposal for demolition met six of the six standards in favor of demolition. However, she noted that in the deliberations for demolition, as requested by Overland Development Corporation at the March 7, 2001 meeting, the Historic Landmark Commission did not overturn staff’s findings and therefore, did not find in favor of the demolition of this structure. Ms. Coffey stated that the applicant will either have to undertake a bona fide effort to preserve the structure, according to the City's Zoning Ordinance in Section 21A.34.020(M), go through the entire economic hardship review process for that property as written in Section 21A.34.020(K), or file an appeal of the latest decision rendered by the Historic Landmark Commission to the Land Use Appeals Board, according to the criteria found in Section 21A.34.020(H).
Ms. Coffey stated that the American Housing Development Company had planned to incorporate the Juel Apartments at 340 South 600 East in the project so economic hardship was not requested for that structure. She added that the applicant must now go through the economic hardship process in order to obtain approval to demolish the building.
Ms. Coffey stated that the Historic Landmark Commission has the authority to make one of the following decisions: 1) to adopt the findings of fact of the old Economic Review Panel; approving the demolition 2) to require updated information to those applications to be reviewed by a new Economic Review Panel; or 3) to require an entirely new application that would be filed with a new Economic Review Panel. She indicated that staff did not recommend requiring a new application for economic hardship.
Mr. Simonsen called for questions to staff.
Ms. Miller inquired about the applied standards and the determination with regard to the cost of the renovations of the historic properties to bring them up code. Ms. Coffey said those are issues that would not be clarified until the zoning ordinance is updated. She pointed out that it was a matter of considering the renovation as a "Cadillac" version of renovation or just enough to bring the buildings up to code. Ms. Giraud said that the Economic Review Panel would be the appropriate body to make that determination.
Since there were no further questions for staff, Mr. Simonsen invited the applicant to come forward to address the Commission.
• Mr. Ken Holman, representing Overland Development Corporation, was present. He used a briefing board to further describe the project. Mr. Holman stated that Mr. Nole Walkingshaw and Mr. Scott Mikkelsen, from the City's building inspection department, inspected the Juel Apartment building and the Fail House and reported a list of deficiencies. He circulated copies of photographs, taken by Mr. Walkingshaw, of the Fail House and the deficiency report, of which a copy was filed with the minutes. Mr. Holman talked about the major deficiencies of each building, such as damage to the ceilings and walls, major structural issues, the collapsed roof, and electrical, plumbing, and heating problems. He said that the minimal building codes the City requires would be a concern to him for the people living in those buildings. Mr. Holman said that those standards were debated extensively during the previous economic hardship process on the subject properties. He added that the conclusion was that the major renovation standard should be applied and those costs were included in the information that was submitted by the previous owner.
Mr. Holman spoke of the varying degrees of disrepair of the other properties. He said that a portion of the Lunt Motel Annex buildings had been totally gutted by fire.
Mr. Holman submitted a memorandum and updated copies of the cost /IRR (Internal Rate of Return) analysis for each of the properties in the current application, of which a copy was filed with the minutes. He circulated copies to the members of the Commission, and to staff. Mr. Holman explained that Overland Development Corporation compiled a summary of the original analysis that was used by the Economic Review Panel to determine that the subject properties met the requirements for economic hardship.
Mr. Holman referred to his memorandum and said that Overland Development Corporation provided a side-by-side update to show current cost /IRR estimates on each property versus the previous analysis that was done by the American Housing Development Company for Winthrop Court LLC. He said that Section 21A.34.20(K)(2) (b)(v) of the City's Zoning Ordinance asks for all appraisals obtained within the previous two years by the owner or applicant in connection with the purchase, financing, or ownership of the property. He said that the updated information included the most recent appraisal of the property performed by J. Philip Cook & Associates on August 10, 2000. Mr. Holman pointed out that the property was appraised at $5,505,000.
Mr. Holman stated that Overland Development Corporation currently has the property under contract to purchase at $5,300,000 and that all current costs for properties are based on the allocation percentage from the original applications submitted by Winthrop Court, LLC. He added that the construction cost multipliers are based on a Marshal & Swift report issued in April of 2001. He explained that Marshal & Swift is a national cost estimating service that ranks the cost of construction in every city in every state and tracks building costs for each individual city each day.
Mr. Holman said that the rental rates, according to Equimark Properties Apartment Market Report of January 2001, have increased 4.75 percent over the past two years. He noted that the current market prices for the homes on Vernier Place and the Mumford House are based on comparable listings provided by the Wasatch Front Multiple Listings Service.
Mr. Holman noted that the total square footage of all of the buildings was 3,654 square feet. He pointed out the acquisition cost of $3,793,932 for both land and buildings, and the land credits attributed to the Mumford House, that were deducted from the overall purchase price.
Mr. Holman stated that the renovation costs included the building cost, which was established by a bona fide construction estimator after identifying all the criteria that needed to be met, the design costs, the engineering costs, the site costs to bring the site up to code, and a contingency fee. He reported that the equity analysis was derived from these costs added to the acquisition costs for the land and buildings, then deducted from the fair market value of the property, plus any allowable tax credits. He pointed out that the project equity was a negative $106,895.
Mr. Holman said that the next portion of the analysis, was calculated from the initial investment cost of $125,000, less the $45,000 in tax credits for a net initial investment of$80,000.
Mr. Holman continued by saying that the renovation costs were allocated over a six month period, the tax credits were applied, and that established a monthly amount of the rental price. The monthly operating expenses that would be incurred were deducted from the rental price, which determined the monthly net income. He said that monthly net income was calculated on a 24-month basis resulting in an annual rate of return of a negative 15.71 percent. Mr. Holman said that the restoration of the buildings on the property would be economically unfeasible. He added that for a project of this magnitude to be feasible, the annual rate of return would have to be at least 10 to 15 percent. Mr. Holman said investors would not make this type of investment unless the figures were the same marketable rate of return as in other investments.
Mr. Holman indicated that in 1998, the American Housing Development Company did the same evaluation for Winthrop Court, but factored in the proceeds from the loan, then the cost of services each month were netted out of the monthly net operating income. He pointed out that they reduced the negative internal rate of return from 15 percent to a just under 9 percent.
Mr. Holman pointed out that in each case, whether done by cash only or a leveraged basis, the IRR for the property has remained negative and actually gotten worse. He said that Overland Development Corporation's information indicates that the economic hardship remains and is actually greater. Therefore, he stated that the applicant requests that the Historic Landmark Commission agree to adopt the previous findings of fact, grant each structure an economic hardship, and approve the demolition of the buildings.
Mr. Holman indicated that the applicant would be filing an application with the City's Land Use Appeals Board hoping that the Historic Landmark Commission's decision would be overturned and permission granted to demolish the Fail House. He concluded by saying that if that application fails, the applicant would seek a finding of economic hardship for both the Fail House and the Juel Apartments.
Mr. Simonsen asked if there were any questions for the applicant. The Historic
Landmark Commission made the following inquiries, concerns, and comments:
• Ms. Rowland led the discussion by inquiring where the applicant would "break even" on the renovation costs and asked about using the negative 9 percent figure when calculating the renovation costs. She added that it seemed like allocating a half million dollars or more for renovation cost would be more than most people would allow for the renovation of the buildings. Mr. Holman said that the applicant had not considered that in their analysis. Ms. Rowland continued by saying that most people would conclude that $50,000 would not be enough to make the buildings habitable, but again, $500,000 is a lot of money for the restoration. Mr. Holman stated that he circulated the copies of the photographs of the Frederick Fail House, not to "provide shock value" but verify the poor condition of the building. He said that an expert from the City building inspection team, who was independent from the applicant, took the photos and evaluated the condition of the buildings. He spoke of the crumbling foundation and other deficiencies of the structures and pointed out that cost of renovating these buildings would be extremely high. Mr. Holman added that it would be less costly to tear them down and build new structures. Ms. Rowland said that another reason why the cost "skews so negatively" is due to the price paid for the property. She quoted the price of over $350,000 for the Fail House, and said that was "out of proportion" for what a single-family home would cost. Mr. Holman said that the high land cost was due to the City rezoning the properties to allow higher density, multi-family buildings. He noted that the applicant would never have paid the kind of prices that was paid if single-family homes were going to be built.
• Mr. Knight clarified that the applicant was willing to go through the process with the knowledge that demolition might not be approved. Mr. Holman said that the applicant had some reasonable belief that economic hardship could be proved after the final analysis of the property. Mr. Holman said, he did not know how long it would take or "how many hurdles the Historic Landmark Commission would make him jump through". He pointed out that there was a contingency in the purchase agreement contract, that if the applicant did not receive permission to demolish the buildings, the development would not go forward and the property would be turned back to the previous owner, who would have to start
the process again.
• Ms. Giraud inquired if the analysis considered that if the buildings on the site were renovated, they would be worth more. Mr. Holman stated that projection was considered for each building. He added that the market value for the renovated buildings under the Winthrop Court analysis in 1998 was $300,000 and the revised value had been increased to $355,000.
• Mr. Simonsen talked about the applicant's options on the property. Mr. Holman said that the applicant had a signed firm contract with non-refundable earnest money in place. He said that the applicant could walk away from a substantial investment if permission is not granted to demolish the buildings. Mr. Simonsen commented that it was "all" or "nothing". He then inquired if there had been any investigation as to whether or not some of the structures could be preserved and amortized in with the return, should a portion of the project go through with higher density and multi-family units. Mr. Holman said that the applicant evaluated that idea fairly extensively with the architects. He added that the Juel Apartment Building with 24 units could be replaced by a building that would have 100 units, therefore reducing the land costs per unit. Mr. Simonsen pointed out that since the use plan for new construction has to be reviewed by the Historic Landmark Commission, and given the design guidelines, there may be a possibility that a building with 100 units might not be approved in the same land mass.
• Ms. Mickelsen inquired if Mr. Holman was familiar with the Design Guidelines for Residential Historic Districts in Salt Lake City. Mr. Holman said that he believed the applicant was following the guidelines in terms of parking, setback requirement, percentages of open space, and height restrictions. Ms. Mickelsen said that there are City building codes to which the project must comply, but there is another set of guidelines for historic districts.
• Ms. Coffey said that the allowable height of a building on 600 East, for instance, could only be 35 feet, under the provisions of the base zone. However, the Historic Landmark Commission could limit the height if they found the lower height was more historically compatible than a higher building. Mr. Holman noted that the Juel Apartment Building is not in compliance because it is 40 feet tall. He said the applicant was anxious for the Commissioner's input in the design of a new project that would historically have the look and feel that the Commission wants in this neighborhood and meet some of the issues that the Commission finds important. He said that the applicant had met with the neighborhood on two occasions and had received significant input at those meetings. Mr. Holman said the applicant hoped to incorporate those suggestions and ideas into the new construction.
• Mr. Wilson asked for clarification on the numbers of units that would be constructed on the subject property in the reuse plan. Mr. Holman said the exact amount was uncertain. He said that the applicant hopes to be able to put 550 units on the site and added that the current zoning would allow 600 units. Mr. Holman said the restriction would be the parking and height issues. He stated that in the first phase of the project, the buildings fronting 500 East would have a "residential scale" to them, then the massing and height would be behind the street frontage. Mr. Wilson questioned the legitimacy of the comment that the 24 units in the Juel would "trade out" for 100 in a new building. He made the observation that if the height limit on 600 East was only 35 feet, in order to put 100 units in the new building, it would have to be four times higher. Mr. Holman commented that the new building would be turned a different direction than the existing building. He went on with his explanation about how the land would be used to accommodate the multiple units.
• Mr. Gordon introduced the subject of the property value increase due to the east west alignment of the light rail on 400 South Street. He inquired if the land value analysis, provided for Winthrop Court, reflected the light rail corridor. Ms. Coffey said that east-west alignment has been known for a number of years.
• Ms. Miller said that the previous developer found that it was economically feasible to preserve and restore the Juel Apartment Building. She inquired why the applicant did not consider preserving and using that building or other structures on the site. Mr. Holman said that it was a "misnomer" to think the previous developer was going to renovate the 24 apartments in the building. He continued by saying that the previous plans called for the Juel Apartment Building to be used as a clubhouse as an amenity for the apartment complex. Mr. Holman said that the applicant's proposed project would provide four times the amount of affordable housing units that currently exist in the Juel. Ms. Miller
said that the building would have been preserved, even though the use may have
changed. Mr. Holman said that he questioned the economic feasibility of the previous proposal; otherwise the project would have gone forward
• Mr. Littig asked about the ratio of affordable housing units. Mr. Holman said that half of the 200 units in the first phase of the proposed project would be affordable housing units. Ms. Rowland said that the affordable units that would be included in the proposed new development are "60% amortized affordables", which would rent for $600 or $700 a month. She said that she believed that the rents range from $400 to $500 in the Juel. Mr. Holman said that the "affordable units" would be one-bedroom apartments that would be in the range of $450. There was further discussion regarding the affordable housing rental units and the low income housing tax credit guidelines.
The discussion turned to the fact that the property site currently straddles several zones, as follows: Those on Vernier Place and 500 East are zoned RM-U (Residential Mixed-use); those on 600 East are zoned RMF-35 (Moderate Density Multi-Family Residential); and those on 300 South are zones RO (Residential Office).
The subject of the proposed Transit Oriented Development (TOD) zoning district was introduced. Mr. Knight said that TOD would only involve the CC Commercial Corridor zoning district that runs along 400 South and would not be applied on the subject property site. Mr. Simonsen said that the Commission could only respond to the current zoning of the property. Mr. Holman indicated that the applicant plans to request rezoning portions of the property if the reuse plan can be implemented.
Mr. Holman concluded by saying that the applicant would like to have the opportunity to construct a housing project on the property site. He said that the applicant would definitely want input from the Historic Landmark Commission on the architectural design so it would "meet the standards in terms of maintaining the integrity of the block" and include some of the historical architectural elements that exist in the Juel and in the surrounding neighborhood. Ms. Jakovcev-Ulrich cautioned the applicant by saying that replicating historical elements is not necessarily the best design solution for a new building in a historic district. She said that a contemporary modern building could provide a more residential feeling and integrity of the block than doing "fake" historic elements. Ms. Jakovcev-Ulrich added that the applicant might want to discuss this matter with the architects.
Since there were no further comments to the applicant, Mr. Simonsen opened the hearing to the public and asked if anyone wished to address the Commission. The public made the following inquiries, concerns, and comments:
Mr. Matt Wolverton, Chair of the Central City Community Council, who resides a 555 East 100 South, stated that he was not speaking as the Chair, but as a local resident, since the Central City Community Council does not have an opinion on the economic hardship issue. Mr. Wolverton said that he was here "eulogizing" the existing historic structures that remain on the subject block. He talked about the rezoning of the property site to a higher density zone and the impact that rezoning had on the block and the surrounding neighborhood. Mr. Wolverton said that he believed the property values were based on a justifiable speculativebasis because the route for the light rail corridor had been predetermined several
years ago. He stated that there are "many lessons that can be learned from this block and many pieces of this history that should not be repeated". Mr. Gordon commented about setting a precedent for the adjoining block at some time in the future. Mr. Wolverton talked about the deteriorating buildings that exist on the block and crime related issues. He expressed his concern about the diminishing quality of life in the Central City Historic District. Mr. Wolverton noted that the top floor of the Juel Apartment Building was currently being rehabilitated. He spoke further about the historic buildings in the neighborhood and the rights of property owners. Mr. Wolverton said that he would like to have stricter enforcement with regards to the maintenance of historic properties.
Mr. Nole Walkingshaw stated that he was the City's inspector of boarded buildings working with the Housing and Neighborhood Development Division. He said that it was his job to try to maintain some sort of order for boarded buildings. Ms. Miller asked Mr. Walkingshaw about the condition of the Frederick Fail House and the Juel Apartment Building. He said with regards to the Juel Apartment Building, the electrical system has never been grounded which causes several problems. He said that several years ago, anchor ties were installed to try to hold the building together, but the cracks on the back of the building are expanding. Mr. Walkingshaw said that the building is actually "splitting in half'. He stated that the City would require that the building be updated to comply with the current building codes and an engineer's report would also be required before a complete renovation of the building could be done. Ms. Miller commented that many older apartment buildings in Salt Lake City are in the same condition. Mr. Walkingshaw concurred.
Mr. Walkingshaw also discussed the condition of the Frederick Fail House. He said that the roof, ceilings, and walls were collapsing, and the rotted masonry was falling out. He indicated that the building had been "trashed" with squatters living inside. Mr. Knight inquired if he had inspected the other buildings on the property site. Mr. Walkingshaw said that he had not and it would take months to complete a list of deficiencies for all of the buildings proposed for demolition. He also stated that he would not do it without police protection because of the crime element on the block. When Mr. Walkingshaw was asked if he had looked at any of the renovation costs provided by the applicant, he stated that inspectors only point out the deficiencies of a building and not estimate any building or renovation costs. A lengthy discussion took place that focused on the conditions of the buildings on the property site and the rehabilitation costs just to bring the buildings up to the current building codes.
Mr. Warren Lloyd said that he was an architect with Lloyd Design Group, located at 511 East 300 South. He stated that Mr. Holman had invited him to join the building inspectors when they did the "walk through" to evaluate, from an architectural standpoint, the conditions of these buildings; that evaluation has not yet taken place. Mr. Lloyd said that to use the Juel Apartment Building for anything other than the housing units for which it was designed, would not seem feasible. He said that he looked at the structural conditions on the rear of the building and it appears that it is a ground settling condition that has been aggravated by the drainage condition off the roof. He added that it would continue to settle. Mr. Lloyd talked about the structural renovations that have been attempted with some possible success. He said that it looks as if the cables are holding the rear of the building together. Mr. Lloyd said that his office has been in the same location since 1968 when his father founded the practice and he has a sincere interest in what develops on the block. He noted that he hoped the future use would be compatible with the surrounding neighborhood. Ms. Miller inquired if he thought that the potential use for the block of a 550-unit apartment complex would be compatible to the surrounding neighborhood. Mr. Lloyd said that it is a large block and believed it could be possible. He indicated that the question is if the higher density could accommodate the parking and other transportation issues that would impact the area. Mr. Lloyd said that there has been a precedent for housing on that block and hoped that the architecture and urban planning issues will be resolved so a compatible project could be developed.
Upon hearing no further requests, Mr. Simonsen closed the hearing to the public, and the Historic Landmark Commission proceeded into the executive session portion of the meeting.
Executive Session
Mr. Simonsen asked Ms. Coffey to remind the Commissioners what the three choices were regarding the decision that is to be made at this meeting. Ms. Coffey restated that the Historic Landmark Commission has the option to make one of the following decisions: 1) to adopt the findings of fact of the old Economic Review Panel and approve the demolition; 2) to require updated information to those applications to be reviewed by a new Economic Review Panel; or 3) to require an entirely new application that would be filed with a new Economic Review Panel.
A lengthy discussion took place with several members of the Commission expressing their opinions on issues relating to this matter.
Ms. Miller said that she believed because of the poor condition of some of the buildings on the property site that $100 per square foot for renovation costs would be warranted, but it seemed high for some of the structures that are currently in use. She stated that there should be a standard established based on how extensive the renovation should be. Ms. Miller said that someone, who is neutral, should determine what extent of renovation is needed on the properties to make them habitable.
Ms. Jakovcev-Ulrich stated that this might be some kind of message that the Historic Landmark Commission sends to the Economic Review Panel. She added that the figures actually calculate at $120 per square foot. Ms. Jakovcev-Ulrich said, "We are talking about low-income housing, and it would not substantiate that."
Ms. Coffey said that the Commission might request that the applicant supply additional information, to determine the kind of renovation that would be needed on each structure on the block to bring the buildings up to code.
Mr. Protasevich also talked about the renovation costs and to what cost the Commission believed would be reasonable. He added that if it would just be the electrical system that needed to be upgraded and if it would be more than 25 percent, then the cost per square foot would be more in the area of $120 per square foot. Mr. Protasevich stated that he believed trying to determine the cost of renovation is irrelevant.
Ms. Giraud said that she was concerned that it would take weeks to come up with the figures for each building and would add another "loop" in the process to determine if the renovation should be a 'Taj Mahal'' or to just bring the building up to code. She stated that when the ordinance was rewritten, the standard for a rate of return was discussed. Ms. Giraud said the decision was made at that time not to set a standard because a minimal rate of return would be acceptable to some investors and not to others. She added that unless it had absolutely no return, it could not be considered a "taking". Ms. Rowland commented that the reasonable rate of return as defined in the ordinance was to "break even", rather than guaranteeing a "profit". She concluded that the figures in the analysis are the result of the high price that was paid for the land.
Ms. Giraud talked about the range of the purchase price, the variable square footage, and the appraised value of each property. She said that the numbers were very close, but there may be another way to calculate that ratio. Ms. Giraud said that Overland Development Corporation was not initially responsible for purchase price of the properties.
Ms. Rowland stated that she understood why economic hardship was written into the ordinance. She indicated that she believed economic hardship was meant for a particular type of circumstance, and not for someone purchasing a property at a high cost, then letting the buildings deteriorate to where they were not economically feasible to restore. Ms. Rowland said that this issue continues to be a frustration. She pointed out that the goals of the ordinance are conflicting. Ms. Rowland said that she believed it was pointless to try to reconfigure the numbers in the analysis. Ms. Miller said that perhaps the reconfiguration still would not result in a positive rate of return. Ms. Rowland stated that as long as developers relate the higher density zoning with higher land prices, economic hardship would be the option. The discussion continued regarding this matter.
Mr. Simonsen said some of this discussion is related to the underlying zoning over which the Commission has no control regarding the economic hardship issue and which will continue to give the Commissioners "heart burn". He suggested that this important discussion should be the topic at another meeting, and that the economic hardship portion of the zoning ordinance should be altered.
Motion:
Mr. Young moved for Case No. 007-01B to adopt the previous findings of economic hardship relating to American Housing Development Company's proposal from 1998 and 1999, for the demolition of twelve (12) contributing structures on Block 38, Plat B, Salt Lake City Survey, including the structures at 326, and 334 South 600 East; 550 East 300 South; 321 and 331 South 500 East; and 517, 524, 527, 528, 532, 533, and 538 East Vernier Place. Ms. JakovcevUlrich seconded the motion. Mr. Gordon, Ms. Jakovcev-Ulrich, Mr. Protasevich, Mr. Wilson, and Mr. Young voted "Aye". Mr. Littig was opposed. Ms. Mickelsen, Ms. Miller, and Ms. Rowland abstained. Mr. Christensen, Mr. Parvaz, and Mr. Payne were not present. Mr. Simonsen, as Acting Chairperson, did not vote. The motion passed.
A discussion followed to clarify that the Juel Apartment Building and the Frederick Fail house was not included in the motion and they would eventually return to the Historic Landmark Commission for further review in the process of obtaining a demolition permit. Ms. Coffey reiterated the fact that the applicant plans to appeal the Frederick Fail House decision to the Land Use Appeals Board, and that the Juel Apartment Building will go through an economic hardship process.
Ms. Giraud said that the applicant would not be able to obtain a demolition permit until the new reuse plans are logged in and a plan review fee is paid, w 1ich is 65 percent of the total cost of the building permit. She pointed out that the reuse plans would still have to be reviewed and approved by this Commission. Ms. Giraud stated that this process prevents someone from demolishing everything and not having a reuse plan.
Mr. Knight stated that all buildings have to be documented before they are demolished.
OTHER BUSINESS
• Adjournment of the meeting.
As there was no other business, Mr. Simonsen asked for a motion to adjourn.
Mr. Young so moved to adjourn the meeting. Ms. Rowland seconded the motion. It was a unanimous vote of approval by the Commission members and the meeting adjourned at 5:45P.M.