A dilapidated hotel in Tooele City may become the best local example yet of how a redevelopment agency can help stimulate renewal of a blighted urban area.
Or it may become the worst local example yet of what happens when an RDA’s best made plans go awry because market conditions suddenly tank or a developer fails to deliver on its promises.
As reported in the July 4 edition, the Tooele City Redevelopment Agency signed an agreement on June 19 that paves the way for the former Broadway Hotel, located on the corner of Broadway Avenue and Date Street, to be renovated into affordable housing.
The agreement with developer Broadway-Heritage Village Apartments 2017 allows for up to $360,000 or 10 years of tax increment generated from the improved property, to be used to meet the debt service coverage required by the bonds issued to fund the project to prevent default.
The agreement requires the developer to submit to the RDA a yearly budget that includes revenue, expenditures, net operating income and debt service. The developer won’t receive any tax increment if the project generates enough revenue to meet the debt service coverage.
Also, the agreement requires the developer to begin construction by next April. RDA consultant Randy Sant said the developer has a buyer for the bond, an equity partner lined up and intends to begin construction this fall. Completion is expected by the end of 2021.
Current concept plans call for redevelopment of the former hotel to create 30 bedroom units and construction of 18 new units, with a mixture of one, two and three bedroom units. Sant said based on projections, the tax increment will likely only be given to the developer for 3-4 years.
The agreement between the RDA and the developer comes more than a decade after development plans for the Broadway Hotel began around 2004 and then stalled after 2008’s Great Recession. Last August the developer said the projected cost was $8 million.
Other than providing direct funding, the RDA, Tooele City Council and Tooele City Planning Commission have helped keep the project moving forward. For example, last August the planning commission gave a positive recommendation to the City Council for amending provisions in the mixed-use Broadway zoning district.
The City Council approved those provisions, which entail lot size, setbacks, maximum density, building height and parking. The provisions only apply to the mixed-use Broadway District, and give it more flexibility to help the project go forward as a unique, historic part of the community that has experienced a decline.
For years, though, that part of Tooele City has experienced more than a decline; the Broadway Hotel’s boarded up windows and graffiti covered exterior speaks volumes of the area’s blight.
But thanks to the developer, the RDA, the City Council and the city’s planning commission, the eyesore the Broadway Hotel has become may soon be changed into a vibrant, aesthetically appealing building that provides affordable housing to the community.
May that effort succeed. And may it further stimulate positive change and new retail development along Broadway Avenue for the benefit of all.