May 16, 2014

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Article

Point of the Mountain: Real Estate Experts Discuss its Future

By Rachel Madison

May 16, 2014

The point of the mountain—the corridor of land between southern Salt Lake County and northern Utah County—is one of the many areas of Utah where new growth is occurring rapidly. When it comes to residential and commercial real estate, big changes are coming down the pipeline, specifically because of this area’s available space.

A panel of commercial and residential real estate experts spoke to Utah’s Urban Land Institute group Thursday about the point of the mountain area, which includes cities like Draper, Bluffdale and Lehi, and what they see happening in the area in the next decade.

Bryan Flamm, co-owner and managing partner of Candlelight Homes and Development Associates, Inc., said when it comes to housing, the south end of the Salt Lake Valley is where land is left. He acknowledged that it’s been a struggle to bring people there to live, mainly because of a resistance to change from the communities that up until recently have been rural farming areas. He said his company has seen a heavy push back from a lot of cities like South Jordan and Saratoga Springs that are passing resolutions to prevent high-density, multi-family housing.

Russell Fox, assistant city manager for Draper City, said because the city wants to attract developers, it’s begun zoning areas to tailor to developers.

“We want to work with the development community, so we’re trying to think out of the box,” he said. “If you want to build something, we’re going to try to tailor that area to what the community and the developer wants. Looking at the population and growth projections for Utah, those people have got to go somewhere, and we’re hoping it’ll be here.”

Draper City is also excited about the prison relocation project, Fox said. Because the prison has been recommended to be moved, the Legislature has created a committee to determine when and where to move it.

“We’re going to see a lot of great potential at that site,” Fox said. “We created a concept plan to show what it could be. I doubt that’s how it will develop, but 10 years from now, the prison will be phasing out and we’ll see some other developments start happening on big properties. We hope to see five-, six-, seven- and eight-story buildings, more industrial, and more density around transit.”

Fox said the area is gaining in popularity in part because of the variety of transportation options.

“We’ve got I-15, Bangerter Highway, Frontrunner and other connectivities starting to happen,” he said.

While transportation is a benefit to the area, Fox said he also understands the current limits. One major UDOT project, along I-15 from the 12300 South to the Lehi exit, will begin this summer to widen the freeway and help with congestion. Fox is also hopeful that Trax’s blue and red lines will be extended further south and link up with Frontrunner.

Mark Murdock, vice president of development at the Gardner Company, said he thinks the growth between Draper and Lehi is here to stay.

“Everybody from the Provo area is now looking at moving to the Lehi-Draper area,” he said. “I can see it for the foreseeable future as a high-growth area.”

Jeff Richards, first vice president at CBRE, said he’s been through a couple of market cycles in the South Valley area, and he’s seen that it doesn’t get hit as hard as other areas during recessions.

“There’s 16 million [square feet of industrial space] in the South Valley, but there’s just enough demand for it that even in the bad times we don’t see the 35 percent reduction in rents that we saw across the board everywhere else [during the last recession],” he said.

In the next 10 years, Richards expects the area to be built out as far as industrial space goes.

“From Bluffdale to Sandy, we’ll be done,” he said. “There is some land left in Lehi, but over the next 20 years, I think we’ll be done there too. Toward the end of my career, I think I’ll spend a lot of time in places like Tooele, Saratoga [Springs] and maybe Eagle Mountain. That’s where industrial is going to push.”

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