Developer earns tax credits after preserving 64-year-old building in new housing project

SALT LAKE CITY — A new mixed-use housing development east of downtown Salt Lake City has now received tax credits for preserving a historic building within its design.

Woodbury Corporation officially received both federal and state tax credits for preserving the historic IBM Building near 348 S. Temple in Central City, Utah State Historic Preservation Office officials noted on Thursday.

The Source on South Temple, which opened earlier this year, features over 180 residential units, including 20 that are in the IBM Building, which first opened in 1962. A coffee shop and amenities, ranging from a bowling alley to a golf simulator, are also in the building, while a seven-story addition behind the building was constructed over the past few years to fill out the complex.

State historians lauded the project for showing how adaptive reuse can protect Utah’s unique architectural history while also tackling its vital housing needs.

“Preserving our historic spaces is also one of the best ways to attract the wide array of people who love history and architecture or who just want a cool place to live, work or visit,” said Amber Anderson, Utah’s deputy state historic preservation officer.

The building is one of over 100 contributing structures that remain within the South Temple Historic District, which was added to the National Register of Historic Places in the 1980s. All of these range from historic homes, like the Governor’s Mansion, to gathering places like the Salt Lake Masonic Temple, to office buildings like the IBM Building.

It, like the historic mansions, stands out because of its fascinating design. Drawn up by Salt Lake architect Donald Panushka and James Hunter and Associates, it features post-tensioned concrete arches — one of the first projects in Utah history to use post-tensioned concrete — and columns that differ from many of the other offices in the area.

Panushka also designed multiple structures at the University of Utah, as well as the lodge at the Park City Ski Resort and many homes, before he died in 2003. The IBM building is one of his lasting “bold” designs, Preservation Utah officials noted.

It’s also one of a handful of office-to-housing transitions that have emerged since the COVID-19 pandemic, located within a few blocks of Seraph at South Temple, Arbor 515 and Maye House.

When Woodbury focused on the IBM Building, its officials said it wanted it to be a “nod to the building’s original era,” which is why they gave its common area and gathering space a midcentury modern design. The project also preserved and rehabilitated the building’s iconic arches, barrel-vaulted ceilings and terrazzo flooring, while adding new exterior railings that mirrored its original aesthetic.

“This project thoughtfully combines historic preservation with modern design and amenities,” said Jeff Woodbury, the company’s senior vice president of development and acquisitions, in a statement after its grand opening in June.

Since it was within the National Register of Historic Places district, the project qualified for tax credits to offset some of the project costs. Being a housing project allowed it to collect both state and federal incentives, which can total up to a 40% tax credit.

Woodbury ultimately received $3.2 million in credits for its preservation of the IBM Building. Anderson said projects like it, where old office space is converted into housing, have been one of the office’s biggest returns on investment.

“Not only is the building often already broken up to manageable spaces, but residential rental use is also the only way to capitalize on both of these large tax incentive programs at the same time,” she added.