Sandy City lawmakers finalized the terms of a series of bonds totaling $8.3 million in late February. The city-issued securities will help fund the purchase of the Arbor Plaza office building and renovations to the council chambers.

The Arbor Plaza, located within the City Hall courtyard, was bought to help meet the growing need for office space for city employees. The three departments with the largest deficits in space are the police, parks and recreation and the arts guild.

Dan Nelson, Sandy's Real Property manager, told the council that city officials have ruled out putting a police station in the Arbor building.

"We just want to make sure whatever we put in there is consistent with the look and feel of the other tenants," Nelson said at a meeting on Feb. 10. "... That's the reason why we concluded pretty early on, and we've had some feedback from leasing agents who said it's probably not a good idea to put police in there."

Planned update for City Hall’s second floor. (Courtesy of Sandy City)

The plan is to house offices for the recreation side of parks and rec employees on the Arbor building's first floor, alongside the Sandy's Redevelopment Agency, and to put a community events center for the Arts Guild on the second floor. A currently unoccupied second-floor suite will also be used as a shared conference room.

Sandy needs an additional 29,702 square feet of office space to accommodate city staff. The Arbor building will help address that workspace deficit with its 13,884 square feet of vacant space.

Sandy's governing body deliberated for over a month on acquiring the Arbor building. On Jan. 20, the council approved the negotiating parameters for the bonds on a 6-1 vote and, on Feb. 17, finalized proceeding with the purchase of the office block by a 4-2 margin.

The planned layout for the Sandy Arbor Center. (Courtesy of Sandy City)

The purchase price of the office building is $12 million. Sandy's Redevelopment Agency will make a cash contribution to cover the remaining cost for the building, according to Brian Kelley, Sandy's finance director. The city will pay the $7.3 million in bond obligations using rent from the leased office suites at Arbor Plaza.

Some members of the public and Sandy elected officials shared concerns about relying on tenant revenue to pay for the bond.

Draper resident Steve Van Maren told the council in January that the city was taking on significant risk because the Arbor building might lose tenants over time.

"That's a big risk to me," Van Maren said virtually on Zoom. "It wouldn't be as big a risk if the city had a policy of collecting rent from every tenant in their buildings … but if you just move in there and don't charge the city for it, you are putting a lot of risk of loss of tenants."

Councilmember at-large Brooke D'Sousa shared some of the Draper resident’s concerns, stating that tenant revenue was the only reason she was "remotely entertaining" the idea of acquiring the office building.

"In order for me to end up on a yes and not pull this plug, then I need guarantees in some way from the administration that the council will be involved … with the administration [in determining] what tenants go in there, and how much they stay occupied at all times until that bond is paid off," the councilmember said.

D'Sousa would later add an amendment to the financial agreement requiring the council-led RDA board's approval for any decision to relocate city staff or departments to the Arbor Plaza.

Other Sandy lawmakers, however, were happy that the payment strategy would not require any money from the city's general fund.

"I think it's a smart approach for our taxpayers," Councilmember Marci Houseman said during the Feb. 10 council meeting. "This is wise [because] it's covered by tenants … I think it does provide a lot of flexibility."

Despite approving the payment approach, Houseman ultimately voted against purchasing the building. Councilmember Kris Nicholl joined her in dissenting on the acquisition of the Arbor Plaza.

About $1 million of the revenue generated from the public bonds will go toward renovating the city council chambers. Sandy lawmakers also set aside roughly $356,000 to fund the renovations in the 2026 city budget.

The lawmakers decided to tack on a bond to cover the funding gap for renovating the chambers during a council meeting in January. But not all councilmembers were on board with adding more debt.

"I'm really uncomfortable with that," said Councilmember at-large Cyndi Sharkey. "Not only are we almost there, but we don't have to do it right away, and we can add some money into [the renovations] too. And there will be revenue that comes in through the lease that will produce some additional cash flow for that as well. So I'd rather make up the deficit there."

Once the chambers are under renovation, council meetings will likely be held in the RDA’s office in City Hall, once it is vacated. The Scope Clinic, an on-site health center for city staff, will also move into the Arbor building, freeing up space for the council, Nelson said.

Public Utilities offices in City Hall will temporarily relocate to the department's main warehouse at 150 East to provide more space for the police department. The city plans to build an office building in front of the utilities warehouse to accommodate the move, but a construction timeline remains undetermined.

Payments on Sandy's bonds will last until 2046. After interest, the bonds will cost the city $13,970,444.64, according to the debt schedule prepared by Sandy's public finance advisors.