Downtown - Questar Project
The Salt Lake Tribune
Update By Goldcntry - Questar Construction Site
Developer gambled on Salt Lake HQ deal for Questar
By Steven Oberbeck
The Salt Lake Tribune
Eight months ago, Wasatch Commercial Management learned Questar Corp.’s lease to its long-time headquarters building on the southwest corner of 100 South and 200 East in Salt Lake City was set to expire in 2012.
That led the real estate development company to gamble $100,000 it could lure Questar into becoming the anchor tenant in a new office building it wanted to construct at 333 S. State Street.
“We launched the project completely on spec,” Dell Loy Hansen, president of Wasatch Commercial Management said Tuesday. He also noted that Wasatch had discovered Questar was looking at remodeling its headquarters in discussions with EDA Architects to evaluate redesigning the structure.
“With Questar’s permission, we were able to sit down with EDA and learn what they (Questar) were looking for,” Hansen said. “So we were able to come up with a building that addressed all their needs.”
All of which made Wasatch’s gamble pay off.
Wasatch formally announced Tuesday at a gathering attended by the governor and other dignitaries it was partnering with Zions Bank to build a $45 million corporate headquarters building for Questar. The six-story, 170,000-square-foot structure will be one of the first LEED Silver energy-efficient buildings in the downtown area.
“It will be 20 percent more energy efficient than some of the buildings that are being constructed today,” said Peter Emerson, the executive officer overseeing operations at EDA. “And it will be 50 percent more efficient than buildings constructed a decade ago.”
Construction is expected to start next month, with Questar planning to move into its new headquarters in January 2012.
Once completed, Questar will occupy the top five stories, said president and CEO Ron Jibson. He pointed out that about 600 Questar employees will occupy the new space, which is about 20 percent smaller than the company’s current headquarters.
“We looked at all of the available alternatives, and this was the best option for both the company and its ratepayers,” he said, pointing out the new building will offer office space that is better organized and more efficient.
He added the leasing costs will be comparable to what the company would have had to pay had it decided to remain in its long-time headquarters.
Hansen said 6,000 square feet of street level retail and restaurant space is planned for the building.
“We can’t announce the name of that tenant yet because the contract hasn’t been signed,” he said. “But with all of the additional development we are seeing in the area there will be a need for another restaurant.”
The new Questar headquarters will occupy the north half of the parking lot at 175 E. 400 South, which is directly west of the Chamber of Commerce Building. The lost spaces will be moved underground.
Hansen said Questar also has been given a 10-year option to take space in the Chamber of Commerce building if that becomes necessary.
“Their new headquarters will be a very nice building but it will far from luxurious,” Hansen said. “Questar was very adamant about the fact that it needed to keep its ratepayers in mind.”
Amid the hoopla Tuesday, Salt Lake Chamber President Lane Beattie conceded Questar’s move will leave its existing headquarters building vacant and in need of tenants during a time of rising commercial vacancies.
“But we’ve been seeing so much growth downtown, with the City Creek project, Goldman Sachs and other projects, that I do not think it will be vacant for long,” Beattie said.