Council briefed on plan to replace 8-unit site with 68 permanent supportive-housing units; city would release $2.4M reversionary interest

Administration presented a public-benefit analysis and a proposed resolution to release Salt Lake City's reversionary interest in Valley Behavioral Health's property at 107 South 800 West. Staff said the reversionary interest is valued at approximately $2,400,000; releasing it would forfeit that value but allow redevelopment of an 8-unit building into a 68-unit permanent supportive housing project for people who were formerly homeless.

A staff speaker described the project's supportive services: in-house treatment services, case management and housing supports intended to improve housing stability for residents. Staff also said the permanent lender has changed to Utah Housing Corporation, and that language intended to keep a 60% AMI requirement in place after foreclosure would likely not survive foreclosure mechanics; instead staff said they are comfortable proceeding given Utah Housing Corporation's role as the permanent lender.

A Valley project representative said the team hopes to break ground in about two weeks and aims to move residents in by mid-2027. Council members asked about proximity to other intensive service sites and about maintaining mixed-income neighborhood opportunities. Councilmember Petro urged attention to mixed-income housing goals to avoid concentrating services in a single neighborhood.

Staff said the restrictive-use agreement terms and related findings will be included in a December 9 public hearing packet; the action is scheduled for the same night. The council did not take final action at the work session; staff will return with final agreement text and the public hearing will be held on December 9.