By Vince Phillips
Artspace walked away from the Space to Create Salida project at First and D. The deal is dead.
But here’s the question we must ask: Would “success” have actually been much better for Salida?
Under the signed ground-lease agreement, the answer is no. Even if every financing hurdle had been cleared and the 19-unit building constructed, Salida would have handed over prime downtown land for more than a generation and received almost nothing in return.
The Actual Deal Terms
- 35-year initial ground lease, plus two optional 5-year extensions (up to 45 years total) at Artspace’s discretion.
- City of Salida receives $1 per year in ground rent.
- Artspace would own, manage, and collect all rental income from the units and community space.
- At the end of the 35, 40 or45 year lease, the building and improvements would revert to the City, likely heavily depreciated.
The Court Order & The Promise
The city only won eminent domain because the judge ordered the land be used “to construct and maintain affordable housing.” That was the legal justification for taking private property. Yet the proposed rents were basically market rate for new construction in Salida (mostly 80–120% AMI). In a high-cost mountain town, that is not meaningfully affordable for most working residents. Was Artspace sufficiently “affordable” to fulfill the judge’s order?
The city made extraordinary accommodations to make this deal happen: eminent domain, favorable long-term leases, tax incentives, public grants, infrastructure support, and years of staff time. Despite all that help and expense, Artspace still couldn’t make the numbers work and bowed out. What does this tell us about the fundamentals of affordability? That even greater public taxpayer subsidies would be required to make it work, and the housing still would not be particularly affordable.
Even in the best-case scenario, Salida city officials would have locked up valuable downtown land for 35–45 years, collected almost nothing in return, and our descendants would eventually have received back a worn-out building after decades of Artspace collecting millions in rents.
The Artspace cancellation may feel like a setback, but from a long-term fiscal perspective it saved Salida from a very expensive mistake.
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