Making way for the next big thing: The ugly side of land-banking and “economic development.”—by John deJong
Some of the more interesting views of downtown Salt Lake City are from the second floor of the soon-to-be-former Salt Lake Roasting Company site on 4th South. On a late January morning after a weekend of storms. the view is beautiful.
The view north, through the bud-rich branches of the middle-aged trees, reveals much about Salt Lake City’s history and its future. That entire 4th South block between 3rd and 4th East is a testament to the plague that is land banking and government-sponsored development.
On the north side of the block, a series of properties, from the 7-Eleven to the vagrant-claimed Sizzler tells the urban tragedy of private land banking. The south side testifies to the distorting effects of the city getting into the “development business.”
With the exception of the Roasting Company, the rest of the block has the economic vitality of the West Desert.
It’s hard to do business in such a wasteland. And, even though the Roasting Company’s coffee is worth going the extra mile for, a thriving local community is the essence of a coffee shop.
Last month we learned from a City Weekly story (“Land Banked,” by Colby Frazier) that after 25 years in the current location, the Roasting Company will move to the former Wasatch Pizza building at 820 East 400 South.
It began with the city acquiring the properties around the Roasting Company in order to build offices for one of its bureaucracies. When that plan fell through, the city was left with an odd lot of property—unpalatable to developers without the central piece, the Roasting Company. Rather than return the properties to the market, the city sat on them for a decade like a classic land banker, until Roasting Company owner John Bolton cried uncle and offered to sell the property to the city.
One feature of bureaucracy is the “thickness” of an organization. Important decisions are made so far below the top/elected level that the idea of accountability is essentially meaningless. Sure, the city council and the mayor are informed of the plans of the Redevelopment Agency and other city departments, but most projects are presented as inevitable faits-almost-accomplis by the bureaucracy with no real input from elected officials. The mythic benefits of “economic development” are usually the main selling points of these projects.
The ugly side of land-banking and “economic development” is economic undevelopment, where buildings, blocks and even whole neighborhoods decay for decades as land bankers place so much emphasis on the future value of their properties that the present value sinks to zero.
This is how someone makes a living?
Developers are allowed to raze buildings on their properties in order to reduce the tax burden until they get around to building their dream development. When they finally do build, they receive generous tax rebates as thanks for the increased economic activity. The result usually is economic activity that goes from zero to 60 in a couple of decades.
A notable exception to this tear-it-down-to-save-on-property-tax dodge is the building that housed the old Zephyr Club which closed in 2003. The owners thought they could take advantage of a super development deal. The deal fell through and the building still stands empty. Not a victim of the wrecker’s ball because a half-block-long blank in the already gap-toothed smile that is downtown Salt Lake City wouldn’t look good. Not that the rank of dead teeth on the south side of 3rd South between Main and West Temple looks much better.
The land-banking game is really a vicious cycle where the longer a piece of property is kept off the market, the larger the development must be in order to provide the land-banker with an indecent rate of return. This taxpayer-funded economic shell game has been the death of many viable neighborhoods and could, if it continues, be the ruin of Salt Lake City.
The obvious answer is to get government out of the economic development and redevelopment game and let market forces determine growth patterns. Salt Lake City is rife with neighborhoods scarred by the effects of this development roller coaster, whether it’s a neighborhood like the Roasting Company’s, that languishes for decades before developers come up with a lucrative enough deal to try to lure economic activity from other parts of town, or the faded heroes of economic development like Crossroads, Triad and Gateway, whose economic “benefits” are siphoned off by the next big development, well before the mortgage is paid.
Speaking of views: As an engineer and crypto-architect, I’ve always been fascinated by visual alignments.
Here’s one of Salt Lake City’s grandest alignments: Looking to the northeast from the curved steps ascending the SLC Main Library are, on a bearing of about 45 degrees:
• the spires of the Central Christian Church
• the twin onion domes of the Greek Orthodox church on 3rd East
• the old Christian Science church on 3rd South
• the old Greek Orthodox church on 4th East
• the Masonic Temple on South Temple
• and the entrance to the Salt Lake City cemetery in the Avenues.
On a nice day, you can go see it for yourself. Or go to Flash Earth or your favorite satelite photo site and check it out.
John deJong is associate publisher of CATALYST.