OGDEN — The developer for the city’s massive downtown restoration project says it’s already spent about a million dollars on the effort, ahead of any real construction activity.
And consequently, the Ogden City administration is proposing that the city take out a loan to temporarily cover further “predevelopment costs” associated with the project, which includes things like final architecture work, design and engineering.
Brandon Cooper, Ogden’s deputy director of community and economic development, said JF Capital, the city’s developer for its large-scale “Wonder Block” redevelopment southwest of the Ogden Municipal Building, has spent approximately $1 million in consulting, legal and design fees and is hesitant to spend any more money before certain terms of a “land transfer and development” agreement are met, specifically the company’s formal acquisition of the land the development will sit on.
The administration’s proposal, which is set to be considered by the City Council next week, involves pursuing a commercial loan with DL Evans Bank to fund remaining predevelopment costs. Cooper said loan terms have not been established yet but would likely include a principal amount of $1.5 million to $3 million over a three- to five-year term with an interest rate between 3% and 7%.
As part of the proposal, Cooper said, JF Capital would reimburse the city once it acquires the land and obtains its first building permit for construction. Several other items in the LTDA must be met before the land can be transferred to JF Capital, so Cooper said that the administration’s proposal essentially allows for necessary work on the project to continue while those other details are hashed out.
“This is advancing some of the work that has been happening there and needs to continue to fully realize the built project,” Cooper said.
The project at question involves reconstructing the now vacant property into a mixed-used site consisting of hospitality, commercial, retail, office and multifamily housing.
The development site, which was once home to the large Hostess and Wonder Bread factory, is to eventually include nearly 300 residential units on top of what could be as much as 63,000 square feet of retail space. Office space and a boutique hotel with about 100 rooms will also be part of the project, along with a new 754-stall parking structure.
The project is part of the city’s larger Continental Community Reinvestment Area. Located inside a six-block area between Wall Avenue and Washington Boulevard and 25th and 27th streets, the Continental CRA will use tax increment financing to help fund a host of redevelopment projects. TIF works by freezing the tax valuation for all taxable properties inside a specific area of land that the city has tabbed for reinvestment. For a certain amount of time or up to a certain dollar amount, future increases in property tax revenue are used in the redevelopment effort, an oft-used development incentive.
Other potential redevelopment sites include the Weber County Jail, the Ogden Justice Court and the Salvation Army, Bank of Utah and American Linen buildings. Project expenditures for the CRA could total as much as $236.2 million.