Buying 9.81 acres before November 2016 may save $15 million.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.
Salt Lake County is positioned to get a sweetheart deal if it purchases land beneath the Calvin L. Rampton Salt Palace Convention Center and Abravanel Hall from the LDS Church before November 2016.
Buy it before Nov. 4, 2016, and the 9.81 acres will cost the county about $6.4 million. After that, the price jumps to an estimated minimum of $21.4 million.
These divergent terms are an outgrowth of a contract between the county and The Church of Jesus Christ of Latter-day Saints that dates to the June 1964 decision to build a then-unnamed "civic auditorium-sports arena-convention center" between South Temple and 200 South from West Temple to 200 West.
The church owned about 30 percent of the land in that area, according to front-page news stories in The Salt Lake Tribune, a major promoter of downtown redevelopment.
On the day the former County Commission selected that site, then-LDS Church President David O. McKay announced the church would lease the two parcels to the county for 50 years, at $1 a year.
Those parcels, which underlie what is now Abravanel Hall and the Salt Palace's north end, had been bought by the church for "construction of a conference hall that would supplement the capacity of the Tabernacle for major church events, such as conference."
In exchange for the generous lease arrangement, the church secured the right to use the convention center free for 24 days annually, saving it the need to spend $12 million on its own conference hall.
"The church is happy for this opportunity to contribute to the good and beauty of our great city and to the unity in good will of church and community," The Tribune quoted McKay as saying.
Over time, the original agreement was modified. The contract now in play was signed in 1984, said county real estate director Lee Colvin.
It continued to include the $1-a-year lease "considering it's valuable land, that's not a bad lease rate," Colvin quipped but also gave the county the option of buying the parcels for their fair market value in 1984, plus interest.
Colvin said the 1984 value was $3.3 million. With 4 percent interest on one parcel and 7 percent on the other, that now adds up to about $6.4 million.
"The contract says we have to purchase it by Nov. 4, 2016, if we want the good deal," he said, otherwise the purchase price automatically becomes its current fair market value. Colvin calculated that to be $21.4 million. "It could be even more. We're talking millions of dollars difference."
LDS Church spokesman Scott Trotter declined comment.
Although Salt Lake County has paid next to nothing so far to occupy the land, owning it outright would make it easier to upgrade the Salt Palace or Abravanel Hall, said Darrin Casper, the county's chief financial officer. He cited a hassle the county experienced several years ago in getting an easement to put solar panels on the Salt Palace.
The money to buy the land might be available now, too, Casper advised the County Council earlier this month.
It could come from a $33 million bond issued in 2010 to pay for construction of a new headquarters for the Salt Lake County District Attorney's Office. The county has three years to be actively engaged in spending those bond proceeds, but only a portion has been expended because soaring costs have held up the DA building. It is now projected to cost $17 million more than estimated initially.
Casper advised the council that remaining funds from the $33 million bond (some was spent on land acquisition and building design) could be used to help pay for projects ready to be built a new Health Department headquarters, a county fleet building and a senior center in Midvale.
Another option, he said, would be to allocate some money to buy the Salt Palace land while the good terms exist. The county then could issue another bond to cover what's left on those projects plus the D.A.'s offices.
"We would have to issue [bonds] for those other projects anyway," Casper added.
Colvin thinks the transaction is too good to pass up.
"We got a super deal on it in the first place because we were getting land worth millions and were able to lease it for $1 a year," he said.
"The only bad deal is if somebody messes up and doesn't make the deal before Nov. 4, 2016."
In the beginning
Salt Lake County residents voted in November of 1963 to issue $17 million in bonds for a convention center complex $5 million for land acquisition, $12 million for construction.