At Thursday's city council meeting, Park City staff presented the council with the latest projections for the construction costs of affordable housing units at the proposed arts and culture district at the corner of Kearns Boulevard and Bonanza Drive.
The price tag? Over $600,000 per unit.
Councilmember Nann Worel said she appreciated the city’s efforts to give the council a full look at what construction would cost, but the price was a hard pill to swallow.
“They laid it all out and it was a very honest look at ‘this is the construction costs.’” Worel said. “The construction costs of a micro-unit would be well over $600,000 and all of us took a big step back and a gulp and said, ‘wow, that’s a lot.’ I think the majority of the council said that’s too much. That’s about twice what we normally build an affordable unit for, so we’ve asked staff to come back and really look to see if there is other ways there are cost-saving measures or if those costs are accurate.”
Fellow Councilmember Tim Henney did not mince his words at the projections Thursday night.
“I think at $600,000 a unit, my belief is most people in the community would throw up just a little bit in their mouths when they thought this was what we were spending per unit of affordable housing,” said Henney.
Construction and real estate costs have skyrocketed during the COVID-19 pandemic, with units projected to cost over $700 per square foot. The entire district, which had an initial price tag of $70 million, has now increased by roughly 30% to $90 million. The city bought the parcels in 2017 for $19.5 million.
To help pay for the project, the council has to decide between selling the units or renting them out, if they get built at all. Selling them would allow for more subsidies for their construction and renting them would generate a steady stream of revenue.
Another option suggested was looking at alternate locations like the nearby Homstake area as a better place to build the housing. Costs would still have to be calculated for construction in that area.
Mayor Andy Beerman summed up the council’s thoughts as facing a tough reality.
“What I am hearing from councilmembers is that we’re having a bit of a reality test here,” he said. “We had very high aspirations and we’re realizing we may be struggling to hit all those in the way we want to.”
With city council expected to discuss the financials of the project at the next council meeting on January 14th, the future of the arts and culture district will soon be decided.
