Standing Tall in SLC

222 South Main a historic project for Hamilton Partners

Chicago-based real estate development company has acquired an impressive collection of buildings in the downtown Salt Lake area in less than seven years. When completed in November, the 22-story, 495,000-sq-ft 222 South Main office tower will stand as the firm’s crown jewel in Utah’s capital city.

By Brad Fullmer

Standing on the top floor of the unfinished, 22-story 222 South Main office tower project in Salt Lake City, Bruce Bingham of Hamilton Partners soaks in the majestic view of the bustling downtown area.

His life is different since he moved to Utah’s capital city in summer 2002, and he realizes how much effort has been spent by his firm in getting the $125-million high-rise project to this point.

“It’s interesting how life leads you to different places,” says Bingham, who grew up on a farm in Northern Illinois yet attended college at Brigham Young University in Provo. “I never wanted to live here, but this has been a good experience.”

Founded in Chicago in 1987 as an offshoot of the Trammel Crow Co. – at the time the largest real estate development firm in the U.S. – Hamilton Partners might never have expanded into the Salt Lake City market had it not been for one of its partners getting bumped from a flight over a decade ago and forced to spend a night in Utah’s capital city.

Ron Lunt had flown to Big Sky, Mont., in 1998 for a ski trip and had never stayed in Salt Lake. During his 24-hour layover, Lunt and his son toured the downtown area and saw potential.

“I looked around and saw that there weren’t a lot of nice buildings downtown,” Lunt says. “When I got back to the office in Chicago, I told Bruce – since he went to school at BYU – ‘Let’s check out Salt Lake.’ I thought it was a market we could add some value to and saw some opportunities.”

Bingham wasn’t so sure moving back to the Beehive State was something he was interested in long-term.

“I remember Ron saying, ‘This is a great city – we should do something here, Bruce,’” says Bingham, whose family converted to Mormonism when he was in high school. “He thought I’d want to come back here. I’d never lived in Salt Lake, nor frankly did I want to. But one thing led to another – the invisible hand was at work – and we opened this office in July 2002.”

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Hamilton Partners initially purchased property at 222 South Main in August 1999 with the intent of constructing the 22-story office tower. Salt Lake had a 2% office vacancy rate at the time, so the firm was highly optimistic a new stylish high-rise could be leased quickly. But the American Stores office tower across the street on Main, which was completed in 1998, was sold to Albertson’s, and all of a sudden 625,000 sq ft of prime office space was back on the market for lease.

“We didn’t know what was going to happen at that point,” Lunt says of the American Stores building being sold. “Part of the risk of a smaller market like Salt Lake is the absorption rate (of leased buildings). It didn’t make sense to start our building at that time.”

Despite those tough market conditions at the turn of the 21st Century, Hamilton Partners forged ahead with its Salt Lake development plans. The firm purchased and renovated two existing historic buildings (the Lollin & Karrick buildings at 240 South Main) and also constructed a single-story retail property at the 222 South Main site prior to the 2002 Salt Lake Olympics. In early 2002 the historic 11-story Newhouse Building at 10 Exchange Place was purchased, and it remains the hub of Hamilton Partners’ Salt Lake operations.

After Bingham relocated to Salt Lake, he helped the firm’s only branch office outside Chicago grow into a 13-person operation.

Hamilton Partners has since purchased the following properties in Salt Lake: the Broadway Centre, a 14-story, 235,000-sq-ft, Class A office building at 111 E. 300 South; California Business Park No. 1, a 144,000-sq-ft warehouse/light manufacturing building at 3687 W. California Ave.; and the Boston Building at 9 Exchange Place, an 11-story, 100,705-sq-ft building that was originally completed in 1910 and was one of Salt Lake’s first skyscrapers. The Boston Building was completely renovated last year.

Bingham says the firm invested about $10 million in the Boston Building renovation, a project completed by Pentalon Construction of Draper, Utah, and the winner of an Intermountain Contractor ‘Best of 2009’ award for interior construction.

The firm’s signature project, 222 South Main, was designed by Skidmore Owings & Merrill’s San Francisco office and is being constructed by Salt Lake-based Okland Construction, which has remained on board for this project since being selected as the general contractor in 2002. The project didn’t get started in earnest until last fall, at a time of extreme economic uncertainty, which remains somewhat of a concern for Hamilton Partners. The firm has leased out roughly 80,000 sq ft of space thus far, including 67,000 sq ft to Salt Lake law firm Holland and Hart.

The building will include 9,000 sq ft of retail space on the first floor, which Bingham hopes will attract an upscale restaurant and retail shops.

He remains optimistic the building will attract good, long-term tenants in a timely manner, especially given that the project will aim for LEED gold certification, which added an extra 1.5% to the overall project cost. Bingham also says he believes Salt Lake will rebound from the current economic crisis in better fashion than other markets nationally.

“We originally had hoped to have our building under construction during the (2002) Olympics so it could get some exposure,” he says. “The economy delayed us. I believe we’ll start seeing evidence of the economy turning around by the first part of next year. Salt Lake City and Utah in general don’t have the highs and lows that other places do. I think we’re going to be in a faster recovery mode.”

Bingham adds that he’s been impressed with various city leaders and their willingness to bend over backwards to help 222 South Main come to fruition.

“Salt Lake City is a unique place in terms of the attitude of wanting to see things grow and develop right,” Bingham says. “There are no pushovers here – they want it done right. The whole city process of approval and zoning – if they don’t like it, they’ll tell you. They’re willing to help you find solutions and collaborate together.”

Salt Lake Mayor Ralph Becker adds: “This is a signature project for our downtown. It’s a project that is being built to a standard we strive for – we are trying to promote quality and environmentally efficient design. In some respects, it’s setting a new standard for office buildings in Salt Lake. We may be facing tough financial times, but I think everybody is optimistic about long-term opportunities here.”

Jason Perry, executive director of the Governor’s Office for Economic Development, says the building demonstrates “that people are still very confident at investing in the state of Utah and Salt Lake City.”

According to Okland project manager Fred Strasser, the project is on schedule for a Nov. 4completion and remains within budget.

“We have a good working relationship between Okland and Hamilton Partners – Bruce Bingham is the ultimate professional,” Strasser says. “Bruce is genuine and treats people with a lot of respect.”

Okland president Randy Okland, adds: “What’s been interesting is (Hamilton Partners’) attitude that they were going to make this project happen. A lot of people don’t realize what it takes to put together a project of this size. We congratulate them on the efforts they made to get this project going.”

As for future development prospects for Salt Lake, Bingham says “we don’t have any other land right now, but I would like to build another office tower in the downtown Salt Lake area sometime in the next five years.”