I think both sites could both be excellent locations. Obviously for a school at BYU or in Provo to catch up to what is already present in slc would take atleast 2 decades. But in terms or medical school development that is considered easy if that makes sense.
I think both are separated enough with distance that both could sustain excellent training facilities. I believe the population in Utah valley especially with its growth could sustain its own very soon. The question of level one be two is always intriguing in that the difference between the two is typically volume and education programs.
I trained in Phoenix after Med school, we were the only level 1 trauma center for years there, now there are 4-5. As far as training is considered the question is if the student and resident are getting enough contacts etc.
As for space I think where BYU is located presents a bit of a problem however many major schools and hospitals have their medical school campus removed from its main campus etc. very common amongst the Texas schools.
But ultimately my comments refer to the idea that Aamc and others have approached BYU for both medical school and dental schools but there has never been any interest from them.