City Hall, happily, loses $350,000 on Old Town housing deal
City Hall will lose $350,000 on its purchase of two rundown houses in Old Town if a deal is finalized to sell them to a group planning to build a nontraditional development at the site.
Park City leaders, including Mayor Dana Williams, endorse the deal regardless of the loss. The Park City Council in late November approved the sale of the houses and the accompanying property. The purchase is expected to be completed in early June.
City Hall in 2009 paid $750,000 for the two houses — 1450 Park Ave. and 1460 Park Ave. — and the land in a purchase that was approved unanimously. At that time, as the recession wore on, officials were pleased with the purchase price, saying it was an opportune time to buy.
Officials since then have considered how the houses and the land should be developed. Instead of building on its own, City Hall decided to sell the property.
A deal was reached in late November with a firm called GreenPark Cohousing, LLC. The group will pay $400,000, leaving City Hall $350,000 in the red on its $750,000 purchase. The Summit County Assessor’s Office values the two properties at just less than $865,000, meaning the sale price will be less than half of what the County Courthouse says the houses are worth. The assessed value has fallen sharply since City Hall made the purchase.
The City Council in the spring chose GreenPark Cohousing, LLC over two other firms that were interested. Those deals could have been more lucrative, into the $700,000s or $800,000s, but the money was not guaranteed immediately.
GreenPark Cohousing, LLC wants to develop the site with a 10-unit project incorporating the two houses. The firm plans to sell the places at prices below the market rate and there will be restrictions capping the appreciation. City Hall would collect 80 percent of the net profit on the sales, but profits are not anticipated given the purchase prices will be below market value.
Cohousing is a new concept to Park City. It holds that the people who intend to live in a development are heavily involved in its design. GreenPark Cohousing, LLC intends to build an environmentally friendly project designed in a U-shape fashion with front doors opening up to a green space.
There has not appeared to be widespread interest among Parkites in the sale. People involved with GreenPark Cohousing, LLC, though, filled some of the seats in the City Council chambers as the deal was endorsed by the City Council. Nobody testified in a hearing just before the vote. Mayor Dana Williams told the group City Hall was excited with the prospects of the development.
In an interview, the mayor said the $350,000 loss is acceptable in the case of the Park Avenue land since leaders see there being benefits to the GreenPark Cohousing, LLC project. He said housing sold at below the market rate will be created, something City Hall has long supported, and two old houses will be restored. Historic preservation has also been a longtime priority for leaders.
Williams supported the sale to GreenPark Cohousing, LLC. He does not cast votes unless he is required to break a tie. He said he has not received criticism for the deal. Williams noted that City Hall has provided land for other projects that were built as work force housing, such as the parcel where the Snow Creek Cottages were put up.
"The greater good was better than the ROI, the return on investment," Williams said about the GreenPark Cohousing, LLC deal.
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Beerman said he is aware of landlords offering relief of some sort, but he also acknowledged the landlords earn a living off the rents they collect.