More condos, less office space: Canyon Centre development changes courseAug 02, 2022 10:31AM ● By Cassie Goff
By Cassie Goff | [email protected]
Eight years after the first development plans for the Canyon Centre Development were approved by the Cottonwood Heights City Council, there is only one remaining phase of development to be completed. However, it may have to be altered based on the challenges of the current social climate.
On June 21, Managing Member of Canyon Centre Capital LLC Chris McCandless spoke with city councilmembers during a Community Development and Renewal Agency meeting about the challenges they have been facing and described a proposed solution.
“COVID has made a significant difference and it’s hurt,” McCandless said. “This is the longest we’ve taken to put together a project and complete it.”
The Canyon Centre development plans approved in 2014 included four levels of professional use office space. However, as working from home has become much more of a norm, office space is not the commodity it used to be. McCandless has run into difficulty finding buyers for office space.
“We had the building sold and under contract to a gentleman who couldn’t perform, and it took us about three years to get the property back from him,” McCandless said. “I don’t want to keep waiting for office space to work.”
Instead, there is much higher demand for housing. The Canyon Centre developers would like to amend the development plans to eliminate half of the office space and incorporate housing units instead.
“The proposal that is up is for modification to office building. If there is support for exploring this, there would be a process for a conditional use permit, public hearing at the Planning Commission, and, based on analysis, it would require renegotiation with all the taxing entities,” explained Community and Economic Development Director Mike Johnson.
“I don’t want to fight. I’d rather just figure out what’s going to work for everybody and do that,” McCandless said. “We think two levels of residential condominiums will probably work best.”
Instead of four levels of 100% professional use office space, the proposed amendment would allow for 55% professional use office space and 45% residential condominiums. The first two levels would be reserved for the previously approved office space, with the third and fourth levels incorporating condominiums. The last level would be reserved for rooftop gardens.
“The Canyon Centre HOA sent an email to us and they are in full support of what is being proposed,” said Mayor Mike Weichers.
If the two levels were approved for condominiums, McCandless estimates space for at least 10 different units, with potential of up to 21 units. These would be one million dollar condos.
Building condominiums instead of office space would allow for the benefit of lower building height. Office space typically requires 15 feet for each floor of office space, while housing units require 12 feet per floor.
“It would be a shorter building,” McCandless said. “It could be the same height as the hotel.”
In addition, there would be less traffic. McCandless and his team ran a traffic impact study to understand the potential implications of utilizing the space for mixed-use instead of sole office space. They found that there would be 2,000 less vehicles in the area per month with 101 fewer vehicle trips per day. More parking would be available for public use as well, as the condominiums would only require 50 parking stalls.
“To sum up: the positive aspects that have been identified are parking opportunities for adjacent residential areas, building height reductions, and less projected traffic,” said City Manager Tim Tingey.
However, there would be a detriment to the Tax Increment Area (TIA) financing for the project. In 2019, the Canyon Centre was estimated at $51 million.
“The implications of the tax revenue would be a little less,” McCandless said.
Today, projections for the Canyon Centre are closer to $58 million. If the remaining development remained professional use office space, the estimated worth would be $63.2 million.
“We’ll be losing $5 million in taxable value,” said Councilmember Shawn Newell.
Johnson clarified that the trigger date had already passed, and the city had already begun collecting revenue. “We are actively collecting tax increment and the longer there’s not a building there, the less increment we collect.”
Councilmember Ellen Birrell voiced her concern over the potential of short-term rentals if owner-occupancy was not required for the condominiums.
“The zoning won’t allow for short-term rentals,” McCandless said. “But people are still going to do it.”
McCandless mentioned that the proposed amendment would be a harder route for them to pursue overall, but he believes a mixed-use office residential space to be a better solution for the community.
“There are definitely challenges regarding the process of going through the other entities involved with the TIA,” McCandless said. He’ll have to amend the development plans with every single one of the entities involved and attend all the public hearings.
“No one wants to see it done more than I do,” McCandless stressed. “We never abandon our commitments to municipalities, we’ve never defaulted on a project and I don’t want to make this the first one.”
“I’m ready to say move forward with the proposed amendment,” concluded Weichers.
Facts about the Canyon Centre Development:
It’s a $30-million structure with the cost spiking $3 million in the last six months.
Construction costs for one single parking stall are estimated at $37,000.
The apartment complex went up from 112 units to 140 units.
There will be a spa and cycling facilities.
A retail facility under the hotel will be leased by the owners of Root’d. They will have coffee and small food sources.
The Break, a sports bar and restaurant, will be next to Eight Settlers. They plan to open within the next four months.