With a development agreement ratified and initial financing of federal tax credits, state bonds and low-interest loans obtained, the ground lease for the rental housing known as the Engine House is the final step in moving the project forward.
A public hearing and final action on the proposed 65-year lease, with options extending that to 99 years, will happen at the July 13 council meeting.
The Engine House project will deliver 123 total rental housing units with 80% of them affordable to those making 60% of the Area Median Income or AMI. The remaining 24 units will be rented at market rate.
The land is owned by Park City and will be leased to the J. Fisher Company, the city’s partner and project developer, through a public private partnership. City Manager Matt Dias says once the lease is signed, the project can move forward.
“This is sort of the last vestige of that partnership is sealing the actual land lease for the private entity to provide the capital investment incur the financial risks, some of the environmental risks that construction risks of actually the vertical development,” Dias said.
The partnership allows the city to shed some of the risk of ownership and financial liabilities, freeing up money for the city to move forward with other affordable housing developments.
“For the municipality, instead of us sinking our money directly into let's say, $100 million housing project, we have the private sector doing that for us," Dias said. "So, we have other dollars in our housing fund that are being capitalized and distributed throughout the community in lieu of investing them here. This is actually a diversification strategy for the municipality, where we are having the private sector cough up the initial capital.”
As soon as the lease is signed, the city will move forward with clearing any contaminated soil from previous uses on site, or mining operations. The council is set to approve a $750,000 contract with an excavating company to do the work.
“We have done a bunch of testing on this location,” Dias said. “Fortunately, the testing has been more favorable than we anticipated. What residents or the small business owners in the area won't see is a 30- or 50-foot hole that we're going to have to excavate for months on end. It’s more a 2-to-5-foot scrape of the top layer and only portions of the parcel. So favorably, we didn't have the same the soils issues that were initially contemplated when we purchased the parcel years ago.”
The construction outline shows the soil remediation work being done in July and construction starting in August. Construction is expected to be complete by December 2024.
