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Sugar House (Non) Developments 

City Council moves to smash ordinance loopholes that allow developers to "sugarhole" the city.

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Nearly two years later, Salt Lake City is still sore from getting “sugarholed” by a developer who razed the Granite block in Sugar House and left a crater instead of a shopping district. Now, after a year’s worth of study, the Salt Lake City Council’s Planning Subcommittee is building momentum behind ordinance changes to the city’s inconsistent demolition regulations.

The proposal, however, may create more problems than it will fix. For example, demolitions may become onerous enough that developers will instead neglect their properties, or crafty developers could still game the system to demolish properties under false pretenses, if they were willing to pay the cost.

In essence, the debate about the regulations is not focused on whether the city should address the loopholes that allowed the Sugar House crater, but on whether new regulations will cause different problems.

Since the proposal would require developers to get a permit approved before demolition, the big “if” hanging over the reform was whether this requirement would prevent eyesore craters but encourage boarded-up eyesores.

“Would it be better for the person who bought the properties to just board them up and sit on them, rather than just get the permit?” Councilman Van Turner asked Neighborhood Development Director Orion Goff during a meeting about the changes Nov. 5.

“In the ordinance proposed now, it doesn’t appear that loophole is closed,” Goff says.

That concern was echoed by Frank Gray, Community and Economic Development director. “Sometimes the neighborhood tells us ‘we’d prefer to have a vacant lot there,’” instead of lots filled with boarded-up buildings.

The new ordinance would, likewise, provide minimum standards of required landscaping for vacant lots. Existing ordinance has this requirement in many areas of the city, but not all, says Councilman S%uFFFDren Simonsen.

“When the city was negotiating with [Sugar House developer Craig Mecham], the zoning there doesn’t require any landscaping. So the developer’s position was ‘I don’t have to install any landscaping.’”

While, ultimately, the city was able to negotiate with Mecham to provide some upkeep to the lot, Simonsen says codifying the requirement will force future developers to, at the very least, clean-up their messes if construction halts after the demolition is already done.

Using existing fee schedules, the new ordinance imposes fines on developers for every day their lot does not comply with landscaping requirements. Simonsen says even with boarded-up buildings, a standard of maintenance can be brought to bear on property owners. Goff, however, told the council boarded-up buildings had more leeway to remain ugly.

“If the building is stable and not a nuisance, it can sit there and deteriorate until it meets those standards,” Goff says.

Simonsen says the ordinance is strong in that requiring the permit before demolition will keep developers from creating another Sugar House hole. In that case, Mecham sidestepped Planning Commission requirements to formulate a plan that would preserve historic buildings on the Granite District block, and instead submitted a landscaping use that allowed him to ignore the Planning Commission’s request.

Still, Goff told the council there were other ways to game the system. A developer who was willing could submit a plan, get a permit, demolish the property and then resubmit an entirely new plan for the property.

“There’s still going to be that loophole, and then you’re bouncing that against property rights,” Goff says.

The meeting ended with a mandate to draft a purpose statement before Mayor Ralph Becker’s office makes a recommendation. In the meantime, Simonsen believes concerns about other loopholes won’t defeat the reform. In the scenario of a developer changing his mind after already demolishing a property, Simonsen says the economics of the lengthy permit process could make developers think twice about trying to pull a fast one. If a developer under the new proposal used a loophole like that on a project of “Sugarhole” magnitude it would likely cost the developer hundreds of thousand dollars to do the process twice.

Change may be slow, but it is coming, Simonsen says. He sees the purpose of the ordinance very clear.

“In order to demolish a building, you will have to have a viable reuse that is permitted, and if you’re going to demolish you have to meet minimum improvements so it’s not an eyesore. I think that’s a reasonable approach.”%uFFFD

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