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Utah Business

The Best Real Estate In The Silicon Slopes

With the upcoming move to bring the Utah State Prison out of Draper and into Salt Lake City’s northwest quadrant, more than 700 real estate acres are going to be up for grabs in the next few years—and city and state officials, along with city’s mayor Troy Walker, are going to make the most of this chance to craft the future of the Point of the Mountain and the real estate in the area.

“We’re about built out with respect to residential potential,” Mr. Walker says. “Other than the prison site.”

Prison For Sale

The prison has called Draper home since 1951, when the original state prison, in need of costly repairs and sitting on a once-isolated property that had become part of a thriving city center, was moved from Sugar House. At the time, Draper was just a dot of a town between Salt Lake City and Provo. But little over 60 years later, it found itself under similar conditions that prompted the prison’s move from Sugar House.

State leaders started discussing moving the prison in the mid-2000s, but the first serious steps to move the prison didn’t come until the winter of 2012, says Rep. Brad Wilcox, a state legislator who was instrumental in shepherding the move from idea to legislative vote. “We had a prison that needed about $250 million capital investment for maintenance, and we were trying in essence to determine whether or not it was wise to invest that money in Draper or if we should invest it somewhere else,” he recalls. “We made the decision over the course of about 18 months that it made sense to find a new location for it, and then the decision was where we move the prison to.”

That part of the process brought no small amount of controversy as multiple sites across the state were considered. But in August 2015, a special session of the Legislature voted to relocate the prison to a swath of land in the northwest quadrant of Salt Lake City. The new prison is currently expected to open its doors in 2020.

Who Will Grab It?

When lawmakers decided to move the prison, the Silicon Slopes hadn’t fully blossomed into the booming tech hub that it is today. Seeing how much the region has grown even with the prison still sitting in the middle of it is proof that Mr. Wilcox and others involved made the right decision.

“If we ever had any doubts that there’s a tremendous amount of economic prosperity that we can unleash in the Point of the Mountain area and moving the prison would enhance that, I think the last three years have proven that we made the right choice,” he says.

The site represents a rare opportunity, says Theresa Foxley, president and CEO of the Economic Development Corporation of Utah. “We’re very enthusiastic to see that site as a potential catalytic real estate opportunity for the state. Not just real estate, but employment and opportunities for us to keep up the momentum in the IT sector,” she says.

There are far too many unknown variables at this point to say what the site will look like a decade down the road, but that doesn’t stop people from speculating. As far as speculations go, Mr. Walker has heard it all: a professional sports stadium, a research-oriented university extension, the next corporate headquarters for a mysterious company. Just as there’s too little information to definitively say what will go in, there’s not enough to rule anything out, either. “It’s got the potential for anything,” he says.

The fate of the current site, which belongs to the state, not Draper City, is in the hands of the Point of the Mountain State Land Authority. Ms. Foxley says the collaborative approach the authority has taken in getting feedback, not just from Draper City, but all of the communities incorporated in the Point of the Mountain region—commonly regarded as the stretch between Sandy and Lehi—demonstrates the means to unite common goals.

“What they were able to do is say, hey, here’s the listening that we did, here’s all of the feedback that we got, here are the values the community has, and here are some ways you can capture those values through development… the power of the commission is through persuasion,” she says.

Rep. Lowry Snow, a state legislator and chair of the authority, says the group is focused on guiding the site to its full potential, both in the real estate sector and otherwise. “We made a commitment that we would create economic growth that would offset the costs of the new site. I think we can go far beyond that, not just offsetting the costs but create such a blueprint for our state but a model that could be used by other areas for urban planning,” he says.

Although there’s never been anything like the prison site, there is a recent example that gives a hint of what could come. A little over seven years ago, Draper rezoned a 110-acre parcel alongside a Frontrunner stop for transit-oriented development. In the years since, development has boomed. What once had been nearly empty land now houses offices and headquarters for tech heavyweights like 1-800 Contacts, DellEMC, eBay, and Tesla. There are commercial properties too, including a large hotel and a big residential complex.

When the council rezoned the area, it brought in $6.5 million in taxes; today, tax revenue for that parcel is approaching $400 million.

Mr. Walker notes the Frontrunner parcel was a fraction of the size of the prison site and had no state involvement, but it’s hard not to look at it as a microcosm of growth in the area. “It’s a view of what could happen,” he says.

Property Cons (No Pun Intended)

There are still kinks to be worked out with the site itself, as well as accommodating the growth that developing it will bring.

For some, the idea of bringing more people and businesses along the already-congested stretch of I-15 is a nightmarish thought. The freeway serves as the artery for the Silicon Slopes but as well as any north-south travel through the state. Despite Frontrunner and Trax stops, bus routes, and carpooling, the traffic issue is already an item of top concern for residents and lawmakers alike.

“We know from doing our traffic studies that there is a tremendous amount of traffic utilizing I-15 for local destinations, and one of the goals of this is creating a grid to get local traffic off I-15 as much as possible that allows them to go from the north end of the area to the south,” says Mr. Snow, noting the freeway would ideally be prioritized for through traffic.

Mr. Walker also points to an acute and pressing need for more real estate and affordable housing. In Draper, the median house price is $397,000. Even factoring in apartment and condo prices, that number only drops to $320,000. Utahns love their yards, he says, but the state needs more high-density housing.

Regardless of the outcome, Mr. Walker is excited for what the move of the prison will bring to his hometown. “Whatever happens now is going to be a positive,” he says. “It’s just a question of how positive.”