2 days ago
This new Salt Lake City complex signals start of a district's major redevelopment
Janet West remembers sitting at the Alta Club when she overheard a conversation about low-income housing tax credits.
West, a co-manager of the real estate company W3 Partners, doesn't remember when this took place, but she couldn't shake off the idea of getting into affordable housing. Having experienced life as a single mother of five at one point, she knew the difficulties in housing and she wanted to help.
'It was just on my mind,' she told 'Affordability is really important to me, so that background of hearing that there's a way to help provide affordable housing for people, (we said) let's look into it and see if it's a possibility.'
The idea eventually became The Nest at Rio Grande, a 220-unit housing complex that is now open in Salt Lake City's Rio Grande District. All one-bedroom and studio units are set aside for individuals earning up to 60% of the area's median income.
The complex not only adds more affordable units to a city seeking to add more, but it also signals what's to come in the district.
Formal planning for The Nest began in 2021, after W3 Partners acquired an office space along 400 South between Rio Grande Street and 500 West. Although the W3 Partners had mostly focused on commercial properties to this point, company leadership wanted to turn the space's parking lot into affordable housing. That just seemed like the right thing to do with it, said John L. West another co-manager of the firm, and Janet West's husband.
So, W3 embarked on what would quickly become a complicated process. Construction was already marred by the COVID-19 pandemic, as labor shortages and supply chain issues caused all sorts of headaches.
Inflation came next as lockdowns were lifted. U.S. inflation rates began to pick up in the spring of 2021, peaking in June 2022, right as all these plans were being put together. Construction costs became a 'rollercoaster ride' with the price of lumber and other materials changing almost daily, instead of monthly or seasonally, said Cory Moore, CEO of Big-D Construction.
The Federal Reserve responded by raising interest rates, adding one more wrinkle for companies like W3 that were trying to build.
'It was a very difficult time to design a project,' John West said.
Building affordable housing is especially challenging even in a stable market, which is where those low-income housing tax credits — offered through a federal program that incentivizes affordable housing — came in handy.
The final cost of the project will likely end up around $70 million, John West said, which isn't a number that can't be recouped through affordable housing rates. The company approached groups like the Utah Private Activity Bond Authority Board to receive state and federal credits that are passed on to lenders — Goldman Sachs' Urban Investment Group, in this case — so they're willing to issue a bond to pay for the project, he explained.
Salt Lake City's Community Reinvestment Agency also chipped in, directing $2 million in funds toward the project.
'It's great that we can have affordable housing where the workforce for our city … don't have to live the outskirts of our city or outside the city, but they can live right downtown where we're seeing a lot of redevelopment,' said Salt Lake City Councilman Darin Mano, who is also chairman of the Community Reinvestment Agency.
Construction began in 2023 and wrapped up earlier this year, allowing The Nest's first residents to move in ahead of schedule. W3 hosted a ceremony to celebrate the project's completion on Thursday.
The six-story facility comes with a suite of amenities, including a fitness center, 'modern' clubhouse, a pair of outdoor terraces and a parking garage, among other things. A mural celebrating the neighborhood's train history can also be found inside, and the building is within two blocks of Utah Transit Authority's Salt Lake Central Station.
'I just hope (residents) find it comfortable and that it feels like home,' said Janet West, now that her idea has come to life.
There are other apartment complexes in the area, but The Nest could be seen as the first of a new wave of planned developments. Thursday's ceremony took place a week after the Environmental Protection Agency awarded the University of Utah $2 million through its Brownfields Grants program to help clean up a site in the area that could be a part of its redevelopment plans.
It's also less than a block from where Climbing USA plans to build its headquarters. UTA has also explored major redevelopment of its Rio Grande properties, as has the Community Redevelopment Agency, which approved a master plan for the area last year.
It's a key reason why W3 selected the area for its housing project, John West said. He believes the neighborhood will look completely different over the next decade with everything that's planned.
Mano agrees, largely because it's one of the largest spaces that the city has control over. He expects that Rio Grande could be the city's Granary District or Central Ninth neighborhood, filling in with a mix of residents and businesses as downtown growth spills outward to the south and west of its original boundaries.
The Nest is a good starting point.
'Seeing an actual building open in that Rio Grande area is exciting because that is one of the biggest opportunities we have within our city to really create the Salt Lake City of the future,' he said.
