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It's one of the biggest shopping centers in development today, anchored by Nordstrom and Macy's. It is nestled in one of Utah's largest-ever commercial real estate projects. A stream will run through it, and there will be two 18-foot waterfalls and a retractable roof. Bucking an industry trend, much of it will not be open for business on Sundays.
In many respects, City Creek Center in the massive 23-acre City Creek development being built in downtown Salt Lake City will be like no other shopping center in the country when it opens in March 2012.
Yet much of the center is shrouded in a bit of secrecy. Not one of the estimated 80 specialty stores and restaurants that will fill the nearly 700,000-square-foot center has yet to be revealed by mall owner Taubman Centers Inc., a well-known operator of more than two dozen malls nationwide.
The earliest announcements will wait for May, but newly appointed general manager Linda Wardell describes the company as upbeat about leasing City Creek Center despite difficult economic times. "Interest has remained high," she said in an interview last week.
What types of tenants that interest will attract is unclear, but one thing is certain. Taubman has its share of opportunities and challenges in Salt Lake City.
Not on Sundays • Although Taubman will own and operate the center, it is partnering with the real estate arm of the Church of Jesus Christ of Latter-day Saints, which is developing the rest of the office, retail and residential components of what is simply called City Creek. One result of the alliance is that the center will be the only mall owned by Taubman that won't be open on Sunday, an important weekend shopping day for many retailers but a day on which the church discourages business activities.
Will the lack of Sunday hours make it difficult for the center to attract and keep tenants, given that nearby malls, including The Gateway and Trolley Square, are open on Sunday?
It could to some degree, said Nick Clark, a retail specialist with Commerce Real Estate Solutions, a Salt Lake City commercial real estate brokerage.
Most major chain stores have Sunday hours. And "as the LDS [majority] continues to decline in Salt Lake County, Sunday is becoming a more popular shopping day," he said. "It's definitely starting to shift in that direction."
Unlike the retail stores in the center, Taubman's Wardell said a number of City Creek Center's restaurants will have the option of being open on Sunday and there will be nothing to prevent them from serving alcohol, which the Mormon Church also eschews. Taubman has designed the center with Utah alcohol laws in mind, meaning that nearly all of its restaurant spaces are far enough away from the LDS Temple Square complex that they don't conflict with prohibitions against serving alcohol near churches or schools.
The restrictions under which Taubman must operate in Salt Lake City are just one reason why local commercial real estate brokers are eagerly anticipating the company's announcements in May that will offer the first details about which tenants have signed on to be in the center.
"They (Taubman) are incredibly positive about their leasing efforts and say they are negotiating with major tenants," said J.R. Moore, a retail specialist with CB Richard Ellis in Salt Lake City. "However, they aren't releasing any names, so it will be interesting to hear what they will say."
Susan Kay, vice president of leasing for Taubman, said she isn't worried about filling City Creek Center. Aside from already having two well-known and desirable anchors in Nordstrom and Macy's, Harmon's is building a grocery store near the mall, and the center is close to a number of downtown hotels including two Marriotts as well as the Calvin L. Rampton Salt Palace Convention Center. Its adjacency to Temple Square, one of the state's top tourist destinations, also is a plus, as is its proximity to office buildings filled with thousands of office workers.
A challenging environment • Although City Creek has an attractive central-city location, the battered economy has certainly made launching a project of its size with a mall, condos, apartments and offices much more difficult.
The hundreds of condo units in four high-rises are being developed by the LDS Church. Since City Creek construction began in late 2008, Utah's once-booming economy and real-estate market have taken their hits, with the latter remaining mired in a downturn marked by falling prices and foreclosures.
The church doesn't list its condos on the area Multiple Listing Service, so it's hard to know exactly how that component of the City Creek development is faring, said veteran downtown real estate broker Babs De Lay. But there are hints, based on the overall market, with De Lay characterizing the downtown condo market as sluggish in all price levels. Many finished units remain unsold.
Last summer, the church acknowledged that condo prices in City Creek were being "re-evaluated." Under construction at 35 E. 100 South, units in the 20-story Regent development were originally priced from around $300,000 to as much as $1.7 million. Prices in the 150-unit project, set for completion in mid- to late 2011, were lowered to the mid-$100,000s. Ninety-five have been reserved with deposits.
The twin 10-story Richards Court towers already have opened across from Temple Square at 45 and 55 W. South Temple. But two-thirds of the 90 units, priced from the $200,000s to more than $2 million, are still for sale.
Two other condo projects are in development, the 30-story, 185-unit Promontory tower at 99 W. South Temple, also across from Temple Square, and a fourth tower that will not be built until demand warrants..
Certainly it will be to Taubman's advantage to have as many of the condos as possible full of tenants before it debuts its shopping center.
Competition aplenty • Another challenge for Taubman is the huge investment that has been made in competing mall projects in the past several years, not only downtown but throughout the valley. There's only so much business to go around and so many tenants to lure.
Rivals include The Gateway, just four blocks to the west, which debuted in 2001 and is next to EnergySolutions Arena, a key venue for concerts and shows. The Gateway has many restaurants, the Clark Planetarium, The Discovery Gateway children's museum and one of the most successful movie theaters in the state.
One test The Gateway poses for City Creek Center is that many retailers will not want to be in two malls in such close proximity, commercial brokers say. The two may be "fighting for the same tenants," said Clark of Commerce Real Estate Solutions.
Though farther away, Fashion Place in Murray is one of the most successful regional malls in the West if not in the country drawing from a customer base throughout the Salt Lake Valley and beyond.
Owner General Growth Properties has put a lot of money into Fashion Place in recent years. In 2009, General Growth completed an overhaul of the interior of the main mall property, and a new 138,000-square-foot Nordstrom store opened on the mall's north side.
Soon, Fashion Place also will be home to Utah's first Crate & Barrel store, in an expanded area of the mall that also is home to California Pizza Kitchen and Coldwater Creek both of which are in The Gateway.
East of downtown, Trolley Square has undergone a face-lift and soon will debut will debut a Whole Foods store, which makes the mall even more attractive from a leasing standpoint.
For her part, Taubman's Kay says she isn't worried.
With its location and strategic advantages, she thinks City Creek's distinctiveness will enable it to draw an unmatched mix of tenants, many of which are not "represented in the state today."
In other words, stay tuned. At City Creek Center, there are intriguing developments to come.
City Creek Center
Owners/operators • The shopping center in downtown Salt Lake City at the heart of the City Creek development is being built by the real estate arm of The Church of Jesus Christ of Latter-day Saints. The center, scheduled for completion early next year, will be owned and operated by Taubman Centers Inc., based in Bloomfield Hills, Mich. Taubman owns, leases and/or manages 26 shopping centers in 13 states.
Businesses • The center has nearly 700,000 square feet of retail/restaurant space, and includes anchors Nordstrom (124,000 square feet) and Macy's (150,000 square feet). It will have an estimated 80 restaurants and retailers. There's an additional 60,000 square feet of retail space in office and residential buildings in the City Creek development.
Days of operation • Center will not be open on Sundays, although a number of restaurants that are the part of the mall may be open for business that day.