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It is a muddy bog now. And it has been pummeled as a punch line — a cautionary tale for commercial builders beaten down by the recession — for four years.

But suddenly, the barren heart of Sugar House hugging the corner of 2100 South and Highland Drive is set to rise.

Mocked as the "Sugar Hole," the property owned by developer Craig Mecham finally has secured financing for a planned $50 million retail and residential project that could see construction commence by late spring. Wells Fargo has issued an intent letter to provide $36 million. An additional $9 million would be leveraged from equity the building is expected to generate. And the Salt Lake City Council, acting as the Redevelopment Agency Board, voted 5-1 on Tuesday to green-light an additional $5 million loan to pay for the underground parking.

Mecham, who had planned several condominium buildings before the housing market cratered, wants to erect 204 apartment units atop 44,000 square feet of retail shops and restaurants at 2122 S. Highland Drive. On Tuesday, council members asked if he would favor eliminating the 2100 South cut-out lane that bisects the Sugar House monument and his property to instead create a pedestrian plaza.

"We would applaud that," Mecham said, adding he will pay for the new pavers. "We think that's a great idea."

Under the city loan terms, Mecham agreed to provide a mid-block public easement, to make the west entrance inviting, perhaps by adding retail, and to creating an energy-efficient design worthy of a "LEED Silver" certification. He also agreed to pay fees into a future special-assessment area to help fund an eventual extension of the Sugar House streetcar.

"We're anxious to get started," Mecham said. "We're hopeful of starting late, late spring or summer."

Four years ago, a series of eclectic but run-down shops on the parcel were bulldozed by the developer. When the space sat, empty, residents railed against City Hall and Mecham for prompting, as one publication proclaimed: "The death of Sugar House."

Now, it appears the politicians and property owner will breathe a bit easier.

"I'm glad we're at a point where we're finally going to see something on that corner — it is the key point of Sugar House," said Councilman Van Turner. "It's going to be an excellent starting point to rejuvenate the whole area. I'm very excited about it. We're finally going to get a handle on the problem we've had."

Councilman Soren Simonsen still worries that a planned Highland ramp to the below-ground parking may disrupt the pedestrian experience. But because of a web of utilities along the corridor, city engineers note there is no better option.

The city's loan would be repaid through parking fees collected at Mecham's new project. The bank loan would be covered by residential and commercial rents.

Mecham has said he would consider some discounted lease agreements to possibly lure back some of the displaced merchants. But he has also said he expects some national-chain retailers to pay market rate.

The final design still must be approved by the city.

In other Sugar House news

The City Council, acting as the Redevelopment Agency Board, voted 6-0 to purchase the vacant Deseret Industries building at 2234 S. Highland Drive from the LDS Church for $1.1 million. There is no planned use for the building, but city officials want the property for flexibility in designing a future extension of the Sugar House streetcar. Councilman Soren Simonsen suggested the property could be leveraged to place some public safety facility in the area, but other council members remain hesitant, noting RDA funds cannot be used for public safety.

Derek P. Jensen