Commission OKs proposed tower at Sugar House Zions location, but not full height

SALT LAKE CITY — A plan to redevelop an existing Zions Bank branch location within the heart of Sugar House received the green light to move forward, but it might not be as tall as developers envisioned.

Members of the Salt Lake City Planning Commission voted 4-1 on Wednesday to approve the proposed GEM Sugar House project along with the conditional use that will allow the building to maintain a drive-thru on the bottom floor.

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However, that came after the board voted 4-1 to deny a request for additional height, finding it didn’t meet certain design requirements that allow developers to add 25 feet to the project. It lowers the maximum height allowed from 194 feet to 169 feet.

That came after questions about a unique proposal for affordable housing, which have yet to be decided.

Reducing project height

GEM Sugar House emerged earlier this year, when KC Gardner Company, on behalf of Zions Bank, filed paperwork to receive clearance to build a 182-foot mixed-use multifamily tower at 2200 S. Highland Drive.

A Zions Bank branch has sat on the parcel since 1979, and it would remain the owner of the proposed building, which calls for 139 residential units, 52 hotel units and over 9,200 square feet of commercial space. It would also hold 164 parking stalls.

A bank branch would remain on the first floor, and a restaurant would occupy the top floor.

The parcel, along with most of the Sugar House business district, was recently rezoned to mixed-use district 11 (MU-11). That allows for general heights of 125 feet, but buildings can max out at 194 feet with a design review and if they offer certain incentives, such as open space around it and affordable housing, along with exemptions tied to mechanical equipment, city planners point out.

While city planners agreed that developers met a requirement for 10% of the lot to be open space to receive an additional 25 feet in building height, most of this was considered obstructed, not unobstructed, as the city also requires.

The project would have a gathering space on the building’s fifth-floor deck, which could help fill the gap, said Max Muller, senior development manager for Gardner Group, and Cazes Martin, owner of Engine 8 Architecture. They noted that the lot’s irregular shape added challenges to the project design, influencing the unique setup.

It aims to meet the “spirit and intent” of the city’s zoning consolidation, Muller said.

“Our goal here has been to create something in Sugar House somewhat marketably different than a lot of the housing that’s been built over the last five to 10 years,” he said. “We wanted to create a mixed-use project that really provided an amenity to the community.”

But planning commissioners argued that the fifth-floor space would likely only be for paying customers, even if it were open to people who aren’t residents or guests at an envisioned hotel. That led to a vote to deny an extra 25 feet that’s allowed because of open space.

“Evidence has not been presented that demonstrates the proposal complies with (Salt Lake City requirements) to earn the additional height,” said Commissioner Aimee Burrows

While there was some debate on the proposed drive-thru, especially after Salt Lake City passed a ban on new drive-thrus in Sugar House’s business district in 2023, the board ultimately approved the request. Salt Lake City did allow financial institution drive-thrus as a conditional use when it approved its measure.

More decisions to come

It’s unclear when construction might begin or how Wednesday’s vote affects project plans. Developers would need to modify the project’s open space to receive the maximum needed to reach the original plans.

A chunk of Wednesday’s meeting was spent discussing the project’s affordable housing elements, which will be determined at a later time.

Developers floated a “Homes for Heroes” alternative to the city’s traditional affordable housing requirements for incentives, which would be included in a development agreement with the city. While still in a conceptual phase, it would essentially provide teachers and first responders free housing for a year while setting up opportunities for them to use the saved money for a down payment on a future home, Muller explained.

The program, he said, would be funded privately and without a subsidy. The agreement will go through the planning commission for a recommendation, but needs to be approved by the Salt Lake City Council before construction moves forward.

The idea is promising but needs improvement, said Judi Short, of the Sugar House Community Council. She argued it might take three to five years of free housing to help someone save enough money for a down payment in the market. She also urged the city to limit the number of units it applies to until there’s enough evidence that it works.

Others said the hotel units don’t fit the goal of increased density, removing what could have been housing.

“Hotel units belong in hotels, not in long-term, urgently-needed housing,” said resident Lynn Schwarz.