Who is Getting Rich From Failed Homeless Housing in Utah?

Why is no one asking questions about the sale of the property on North Temple and Redwood Road to the Larry H. Miller Company for their Power District? The original plan for the site was homeless housing.

Richard Markosian

April 16, 2024

One year ago, the Ramada Inn located at North Temple and Redwood Road was slated to become a huge facility offering housing to more than four hundred homeless people in 197 units. After a series of missteps, the facility and the land were sold to the Larry H. Miller family to become part of their Power District plans. How and why did this happen? The newspaper covering this story mysteriously stopped asking questions when Miller’s family name came up. Why?

Back in 2021, The Ramada Inn was purchased by the Salt Lake City Redevelopment Agency. The Ramada was then used in 2022 as the winter overflow shelter. It was opened late, before a winter camp called Fort Pioneer opened up under the 600 South viaduct. Still, it provided warmth and housing for around 400 formerly unsheltered individuals.

After the facility was closed as the winter overflow shelter in the spring of 2023, Mayor Mendenhall and the Salt Lake City Council announced that the facility would be converted in a manner similar to the The Point — a Switchpoint facility at the Salt Lake City International Airport — to become permanent supportive housing for the unsheltered.

Salt Lake City set aside $6 million in grants to be awarded to three developers to build or convert existing properties into more (much needed) permanent supportive housing. Developer Keith Warburton was awarded both the Ramada land-use as well as a $3.85 million grant, a total of $5.85 million to convert the motel units into housing units offering those with permanent-supportive housing vouchers market-rate rents. This type of housing isn’t “deeply-affordable” housing, but it is “permanent supportive” housing for market-rate rents. This type of housing is heavily subsidized, mostly for tenants and landlords who would traditionally not want to rent due to their criminal background, drug usage, mental illness or other disabilities.

Keith Warburton has experience operating several housing units like this including the Salt City Inn, requiring each unit to be upgraded to include small kitchens or kitchenettes. Similar former motel conversions were retro-fitted for housing in downtown Salt Lake City such as Wendell Place Apartments and Palmer Court.

What happened next is still a mystery. Keith Warburton was then supposed to submit his plans to the Salt Lake City Planning Commission and get them approved so that he could move forward with construction. This never happened. Instead, according to Warburton, he started receiving water bills for $9,000 per month and garbage bills for $12,000 per month. Furthermore, the city failed to issue him his funding grant to begin drawing up plans for the facility to secure an additional construction loan.

Instead, Mayor Mendenhall was campaigning for her reelection and including the Ramada conversion as one of her many accomplishments as mayor. The site remained idle and no construction was occurring because the city was holding up financing.

Rocky Anderson was running for mayor against Mayor Mendenhall. He pointed out the lack of movement on the project. After Anderson held this press conference in front of the Ramada in July, The Salt Lake Tribune never attended Anderson’s press conference and instead they quickly released the story about the lack of progress on the Ramada and why the hold-up was occuring.

In their account, the Salt Lake Tribune reported that Warburton decided to “find other opportunities elsewhere.”

Neither Warburton nor the Salt Lake City Redevelopment Agency owns the land rights but only the building rights. According to the Salt Lake Tribune, the reason for the hold up is explained this way:

Tammy Hunsaker, Deputy Director with the city’s Department of Community and Neighborhoods, said issues with the terms of Warburton’s ground lease prevented the city from attaining legal assurances that the property would be used for permanent supportive housing for decades. Those legal snags, she said, delayed the issuance of the grant.

“We definitely need to make sure that the appropriate legal mechanisms are in place to ensure that that money will be used as intended for the long term,” Hunsaker said.

For this reason, while Warburton was never given access to the $2 million and he was unable to begin using the money to develop the property. What happened to the additional $3.85 million grant awarded to Warburton is uncertain.

Were there legitimate legal issues? If so, why did Mayor Mendenhall apparently only learn about these issues after reading Hunsaker’s comments in the Tribune?

Certainly the Mayor knew that the Ramada (Ville 1649) was not progressing, so why was Mayor Mendenhall including the Ramada units in the total number of units she had developed towards homeless housing under her administration when she was campaigning?

Could another plausible answer be that the Larry H. Miller family was developing their grand vision for their $3.5 billion, 100-acre Power District project and the Ramada facility would get in the way of their vision?

Utah Stories would like to find the answer to these questions, because it seems very convenient for the city and the LHM family that they never proceeded. Warburton’s resale of the property to the Miller’s likely resulted in a windfall. It was certainly a win for the Miller family and the Power District project. The Miller Family says they will use a portion of their 100-acres to build affordable housing, but this project will be years in the making. Clearly, the priority of the SLC RDA was not to use the land for homeless housing but to further the Miller’s plans for a successful MLB Stadium and Power District.

The losers are the thousands in need of affordable housing. On a higher note, the SLC RDA has approved nearly $18 million in affordable housing grants for 14 projects. In examining these projects we find that the cost per unit is incredibly high, making it extremely difficult without heavy incremental tax subsidies for these units to be anywhere near “deeply-affordable” if relying on current housing conditions.

Despite all of the unanswered questions, The Salt Lake Tribune never inquired exactly how or why the project failed? Why didn’t the city pick up the pieces and reinitiate the project? Questions remain unanswered, such as: Where did Warburton’s nearly $6 million in grant funding end up? How many “affordable-housing units” has the Mayor’s office helped build compared to what she was saying on the campaign trail?

To demonstrate the failure of permanent supportive housing programs, we profile a few of those who have been trusted with affordable housing and permanent supportive housing leadership who are earning big bucks despite their failures to provide homeless housing.

Who is Keith Warburton?

Keith Warburton operates a business called ETNA Properties. This business buys “distressed properties and develops them into affordable housing.” Warburton owns and operates several permanent supportive housing facilities including Ville 647 in Richfield, Utah which was destroyed in a fire in 2022. Warburton has received affordable housing grants for Ville 647. The Salt City Inn at 1025 North 900 West, also owned by Warburton, is in downtown Salt Lake City. It is designated as “permanent supportive housing.” We visited this facility and it is currently undergoing a new “deeply-affordable” housing project called Ville 9, but construction has been stalled. Area business owners are complaining that the residents are trafficking and using drugs. Warburton also owns the Elko Inn, in Elko, Nevada. On March 6, 2024, that hotel was raided by a SWAT team for drug trafficking violations.

Who is Wayne Niederhauser?

In 2021 Wayne Niederhauser was appointed by Utah Governor Cox to become the State Homeless Coordinator after retiring as the Utah State Senate President in which capacity he served 12 years.

Niederhauser was earning a paltry $42,000 including benefits per year as a State Senator. He now earns $258,000 per year including benefits for “helping the homeless” by meeting with his committee members and allocating the funding for homeless initiatives and projects. This salary is on top of the significant wealth Niederhauser acquired operating CW Management, a real estate development and property management business.

Niederhauser and his partner Chris McCandless developed a large number of properties in Bluffdale, UT called Spring View Farms and Sage Estates where they collect upwards of $900 per month from most homeowners in the form of HOA fees, thanks to the pristine beauty of its location near the Jordan River Parkway.

Niederhauser was actively seeking to use his power as Utah State Senate leader to move the Utah State Prison site out of Bluffdale. Why wasn’t this ever questioned as a potential conflict of interest? Why is a man so intimately involved in development considered to be the best choice to be the State Homeless Coordinator?

While Utah Stories and our readers ask these questions, perhaps a better question is: Why isn’t The Salt Lake Tribune asking or attempting to answer these questions? The Salt Lake Tribune operates as a non-profit and is partially supported by donors and banks affiliated with housing and development in Utah.

Who is Michelle Flynn?

Michelle Flynn is the CEO of the Road Home Organization, earning over $177,000 per year including benefits from her off-site executive offices. The Road Home operates multiple permanent supportive housing apartments as well as homeless shelters. Utah Stories has investigated the failure of the Magnolia Apartments in Salt Lake City over the past 18 months. This facility, according to both residents and managers Utah Stories has spoken with, hosts “drug parties, and nearly every tenant in the facility is using drugs,” we were told by one of the managers. Three of the tenants who reside there corroborate these facts.

Fifteen residents have died at the Magnolia since its opening, according to the manager. Utah Stories GRAMA request showed that as of October 2023 eight residents had died from mostly drug overdose deaths. The neighborhood around the Magnolia located at 165 South 300 East has severely deteriorated since the facility was opened in the summer of 2021. Many residents are moving out and selling their condominiums at a loss, according to area resident David Ibarra.

“This is now Salt Lake City’s Skid Row,” one resident said of the neighborhood, with drug dealers on every block intersection. The $16.4 million facility offers permanent supportive housing for mostly formerly homeless individuals. Utah Stories attempted to ask Flynn why drug users and traffickers are not screened and evicted? And/or why better rehab and support and work programs are not made available to residents? We are told that very few of the residents at the facility work or try to find work, but instead “use drugs all day.” Is this true?

Flynn has rejected our inquiries and invitations to come on the Utah Stories podcast. Wayne Niederhauser, Mayor Mendenhall’s office and Michelle Flynn have all refused to return our multiple calls or answer our most pressing questions concerning the failure of the Ramada Inn project and its sale to the Miller family, as well as the failure of the Magnolia Apartments.

Other Side Village tiny home community is currently under construction at 1882 West Indiana Avenue.

Who is Succeeding in Helping Provide Affordable Housing and Homeless Housing?

There are some exceptional success stories worth mentioning when it comes to providing the housing that the homeless greatly need. Many individuals work tirelessly to support the homeless in meaningful, life-changing recovery efforts.

A top provider of both homeless housing and permanent supportive housing is Switchpoint, operated by Carol Hollowell. Switchpoint provides wrap-around services that homeless individuals require as well as the peer-support they need to feel at home in their facility. Drug use at Switchpoint is never tolerated. Switchpoint is operating the new “micro-pod camp” which is 50 micro-units in downtown Salt Lake City offering chronically-homeless individuals a warm place to stay with support from multiple other non-profit organizations who provide food and mental health support. This first-ever sanctioned camp in Utah is exceptionally well-operated and the neighborhood around the facility has not deteriorated as neighbors feared, but instead is flourishing as many people who are in the camp have been able to get jobs and better housing.

The Other Side Academy (TOSA), operated under Joseph Grenny and David Dorocher, is doing an incredible job transforming the lives of former felons and drug addicts into productive citizens. TOSA also offers a peer-support model and work program that provides all of their tenants work, support, food, lodging and a stable environment for a long-term recovery without drugs or alcohol.

TOSA is currently building the first-ever tiny home village in Utah located on 86 acres at 856 West Indiana Avenue. The Other Side Village will offer housing to residents who have suffered from chronic homelessness or who suffer from disabilities. None of TOSA’s endeavors are supported by public tax dollars, but instead rely on the residents to provide revenue to support the facilities by paying rent through their work programs.Other organizations that are doing an excellent job helping the homeless include: Catholic Community Services, Unsheltered Utah, The Inn Between, First United Methodist Church, LDS Church Welfare Square, Crossroads Urban Center, Rescue Mission, Mental Health of America Utah, and many more.

Feature Image: The Ramada Inn on Redwood Road and North Temple, originally slated for homeless housing. Photo by Richard Markosian.

Housing, HUMAN DIGNITY, Investigation

Richard Markosian

I am a story teller and journalist. I have a passion for farmers, local craftspeople, and folks who aspire to create, build and grow their business in the local marketplace. Why local? By supporting locally-owned businesses we create more opportunity for entrepreneurs, and we claim our sovereignty to shape our communities how we want to see them. I aspire to build Utah Stories Magazine into a household Utah name, and assist Utah businesses and makers with marketing. On the journalism side of things my passion is investigative journalism that offers true insight into issues. I believe strongly in the forth estate: strong, meaningful, insightful journalism is essential to a free market Democracy.

Housing

Working, Homeless, and Out of Options: How Utah’s Housing Market Broke the Working Class

People who fry our burgers, care for our elderly, clean our hotel rooms, and package our deliveries are sleeping in congregate shelters or in their cars. They are not unemployed. They are not addicts. They are workers priced out of their own state.
Podcast

Growing Up in Utah’s Foster Care System: One Child’s Story

Celeste was five years old the first time she dragged a kitchen stool across the linoleum, climbed up to the stove, and made dinner.

On good days there was a blue box of mac and cheese from the food bank. If they were really lucky, there’d be a pack of hot dogs or some bacon to slice into the pot. She’d stir the noodles, cut the meat with careful little hands, and call it a gourmet meal. Then she’d walk her younger sister to school, help with homework, run the bath, and put her to bed.

While most Utah kids her age were learning to color inside the lines, Celeste was learning how to keep another human being alive.

Her father drifted in and out of jail and drug rehab. Her mother usually lay passed out on the couch, sleeping off hangovers and long nights with men and drugs. The grown-ups in the house didn’t mark time by dinner, bath, or bedtime. Celeste did.

“I knew enough to know she wasn’t doing her job,” Celeste says of her mom. “But I also knew enough to know I would need to do it for my sister.”

By seven years old, Celeste wasn’t anyone’s daughter in the way most people think of it. She was the mom.

In and out of “the system”

Her life didn’t start out that way. For the first 18 months, Celeste was being raised by an aunt and uncle. They already had a houseful of kids, but they loved her and wanted to keep her. Years later, Celeste would learn her aunt even asked to adopt her—with one condition.

“She said, ‘You can’t be involved in how we do that. We have to be able to parent her the way we parent our children,’” Celeste recalls. “And he said, ‘I can’t do it. I can’t promise I won’t interfere.’”

The deal died there. Her biological father chose the possibility of control over the certainty of safety.

At about 18 months, Celeste’s parents moved away from family “to figure this out on our own.” What followed was five years of drift and chaos. She bounced between relatives, foster homes, and her parents’ place. Sometimes she and her sister would go together. Sometimes people begged to keep her baby brother because he was so little.

By age seven, the state officially removed them. Her father was back in jail. Her mother’s addiction had swallowed up whatever was left of her ability to parent.

Most people assume this is where the story turns. Parents lose rights, kids go into foster care, things get better. For Celeste, they didn’t.

“I moved every six months until I was 16,” she says. “I lived in about 32, 33 cities.”

In between were “mother-child” drug rehab programs, including one that uprooted them from Salt Lake and dropped them in Detroit, Michigan. On paper, those programs allowed mothers to get clean without permanently losing their children. In practice, at least where Celeste landed, they were barely controlled chaos.

“You have little kids all the way up to almost-18-year-olds together, and you’re not even allowed to see your mom until she’s at a certain level in the program,” she says. “We basically managed ourselves. That’s not going to go well.”

Children who’ve already learned to parent themselves simply become young generals in a kid-run unit. In Celeste’s case, that meant fighting other kids and stepping into situations no child should have to navigate.

“I chose to fight, to put myself in harm’s way to protect my sister,” she says. “Later it made it hard to see myself as abused, because in my mind, I chose it. I wasn’t thinking ‘I’m a victim.’ I was thinking, ‘Look at me taking charge. Look at me keeping her safe.’”

The parentified child in a foster world

If you’ve never seen it up close, “parentified child” sounds like another clinical label. If you’ve lived it—or tried to parent a kid like that—you know it’s anything but abstract.

My own family took in three foster siblings. The oldest was six and arrived in our home with his shoulders squared and jaw set like a tiny drill sergeant.

“He was exactly like you,” I tell Celeste. “He’d say, ‘Just so you know, I’m in charge of these two.’ He coached us: ‘Here’s how you calm Riley down. Here’s what you do with Abby.’”

Like Celeste, he wasn’t really acting like a child. He’d become the caretaker, without the brain development or support to do it.

“You think your decisions are better than what happened to you,” Celeste says, “but your brain’s not developed enough, and nobody’s taught you how to make healthy decisions. And yet you know enough to know something has to be managed.”

That constant managing keeps kids stuck in fight-or-flight. One therapist described it to us as a train without brakes trying to pull into a station. The child wants to calm down, but doesn’t have the internal wiring to do it.

“It feels chaotic and unstable, putting it mildly,” Celeste says. “Only time and consistency can help a kid start to regulate. If you move them every six months, you never get either.”

“Broken” or just brutally complicated?

Listening to stories like Celeste’s, it’s easy to slap one big label on Utah’s foster care system: broken.

We felt that way. The three siblings who came to us were bright and funny. Ninety-seven percent of the time, life with them was joyful: playing in the mountains, trips to Moab, board games, laughing with the dogs. The other three percent was absolute crisis: kids beating on each other, getting kicked out of school and daycare, becoming pariahs at karate class.

That three percent slowly swallowed all the oxygen in the house.

As behaviors escalated, more professionals got involved—caseworkers, attorneys, therapists. Too often, it felt like the machinery of the system was trying to solve its own problems, not understand the children at the center of them. At one point, it felt like the state was more interested in removing the kids than helping them heal.

“We felt like the system was hell-bent on destroying the kids,” I tell Celeste.

She doesn’t flinch.

From her vantage point—as someone who lived it and now works alongside the people running it—Celeste resists the simple “broken” verdict.

“People ask me all the time if I think the system is broken,” she says. “And my answer is no, it’s complicated.”

Coming from her, that’s not spin. She’ll tell you bluntly: “I feel like the system failed me 100 percent.” She can’t point to one thing it did that felt good or healing at the time.

But as an adult, she can see what she couldn’t as a kid shuttled from house to house: massive gaps. Service gaps, resource gaps, legal gaps. People inside the system working under mandates and timelines most foster families never see.

“Children aren’t designed to be raised by a system,” she says. “That’s the problem. They’re designed to be raised by a healthy community and a family. So when we take them out of any chance of that happening—even if there was dysfunction there—and put them into this clunky system, it’s chaos.”

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Housing

From $65K Homes to Million-Dollar Athletes: What Happened to Utah’s Middle Class?

In March of 1979, the center of the NCAA sports world landed in Salt Lake City to witness history. Magic Johnson faced Larry Bird for the NCAA championship on the floor of the old Special Events Center — now the Huntsman Center.

The game would help launch a new era of sports television money, branding, and big personalities. A modern American spectacle was born: Magic vs. Bird face-offs would be legendary. It was the beginning of a new era of celebrity basketball.

Back then, the average Utahn wasn’t rich, but there was still a basic bargain in place: if you worked hard, got married, started a family, and lived somewhat responsibly, there was a decent chance you could still buy a home and build a stable life. A house in Salt Lake City cost around $30- $65,000. The average Utahn earned a fraction of that, but homeownership still felt like a ladder you could climb — not a luxury product reserved for the already connected or already wealthy.

Today, college basketball — like politics, housing, and much of American life — has become a marketplace where nearly everything is for sale. We are told this is progress because Utah is so much more famous and important today. As Salt Lake County tax payers, we are footing the bill to expand the Salt Palace in the name of “progress.”

But what it increasingly looks like is a society where institutions that once at least pretended to serve ordinary people have been reorganized to serve money and elites first.

That is not just true in sports and real estate. It is true in Utah’s government.

In this issue, we look at a BYU basketball star reportedly commanding a seven-figure payday in the NIL era — a system that has turned college athletics into a cleaner, more legalized version of what used to happen in the shadows. The point is not to blame the player. If the money is there, of course he should take it. The point is to ask what it says about a culture that can somehow produce millions for a teenager to play basketball while telling young families there is simply no realistic way to make housing affordable.
And that contradiction doesn’t stop with college sports.

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Housing

Utah Homelessness Crisis: Tyler Clancy Challenges ‘Housing First’ Failures

“It’s not normal to see someone sleeping on the sidewalk in a sleeping bag with a needle sticking out of their arm.”

That sentence should not be controversial. In a sane society, it would barely need saying. But in Utah — where politicians, nonprofits, consultants, and bureaucrats have spent more than a decade congratulating themselves for “addressing homelessness” while the streets of Salt Lake have become more dangerous, more drug-soaked, and more morally disorienting — it lands like an indictment. And it came not from a crank, a talk-radio host, or a downtown business owner at the end of his rope, but from Tyler Clancy, Utah’s newly appointed homeless coordinator.

That matters because if Clancy is serious — and after sitting down with him, he appears to be — then he represents something Utah’s homelessness system has not had in a very long time: someone willing to say the obvious out loud. The old script is dead. Everybody knows it, but almost nobody in power has wanted to admit it.

For years, Utah’s homelessness policy has been built on a polite fiction — that if we build enough units, distribute enough funding, and avoid being too “judgmental,” the crisis will gradually resolve itself. That story was easier to maintain when Utah was receiving national praise for “solving chronic homelessness.” It is much harder to sustain now, when the conditions on the ground tell a very different story.

Magnolia Apartments opened to help alleviate homelessness, but the results were not all positive.

Part of that failure became painfully clear over the last four years. By most accounts, former homelessness coordinator Wayne Niederhauser was a decent man and a very nice guy. But one person close to him described his tenure as that of “a tiger without stripes”— someone with the title, but not the appetite to challenge the sprawling network of nonprofits and service providers receiving millions in taxpayer dollars. That lack of accountability has had real consequences. Multiple former and current residents have told Utah Stories that of the roughly 60 original tenants who moved into Magnolia when it opened, about 20 have since died — most, they say, from accidental drug overdoses.

If those accounts are even close to accurate, they should have triggered a public reckoning. Instead, the system kept moving, protected by good intentions, insulated from scrutiny, and largely unbothered by outcomes that would be considered a scandal in almost any other context.

That is the machine Clancy is stepping into, and unless he is willing to confront it directly — not just coordinate around it — his role risks becoming one more layer of management over the same failures. The reality he inherits is not complicated in the way policymakers like to suggest. It is visible, immediate, and increasingly impossible to explain away.

Open drug use, fentanyl addiction, untreated mental illness, rising disorder, and a growing sense among both the public and the homeless themselves all indicate that the system is not working. Complexity exists, but it has also become a convenient shield for cowardice. It is the language people use when they want to avoid saying what is plainly in front of them: Utah has spent years managing visible human collapse while calling it compassion.

The Lie Utah Told Itself

For years, Utah’s approach to homelessness rested on a narrative few in power were willing to question. It sounded compassionate. It polled well. And it avoided uncomfortable truths.

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