February 1, 2012

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Article

Urban Renaissance

City Creek Center Reawakens a Lackluster Downtown

Gaylen Webb

February 1, 2012

            “We will continue to be an active lifestyle center, serving the public seven days a week,” she says (perhaps in a rub to the retail portion of City Creek’s closure on Sundays). “Our leasing team is continuing to meet with local and national retailers, including first-to-Utah stores,” Nash says.

            One such store is G-Star Raw, a Dutch designer clothing company that produces fashionable urban clothing that is frequently used in runway modeling. The recently opened G-Star Raw selected The Gateway as its first Utah location; The Gateway has also signed a lease with Bettie Page Clothing, known for its vintage style and pin-up clothing of days gone by. The Gateway will be this retailer’s first Utah location as well.

 

An Unprecedented Investment

City Creek has also attracted a new breed of stores to Utah. Upscale specialty retailers opening in City Creek include Tiffany & Co., Coach and Michael Kors. Brewer believes Utah is ready for the chic, the trendy and the upscale, and says Taubman is attracting such stores here—many of which have not been available in Utah until now.

            “We think the retail mix at City Creek Center will draw a broad mix of local, regional and tourist shoppers, and that is going to be an important part of how we are marketing ourselves,” he says, noting that City Creek will offer a mixture of younger, older, trendy and timeless brands. Furthermore, he notes that leasing has gone well and he is pleased with the success. “The collection of stores and restaurants that will be opening at City Creek will be very impressive.”

            City Creek’s development will be anchored by Macy’s and Nordstrom. Macy’s will be located on the east side of Main Street with a three-story, 155,000-square-foot store, while Nordstrom will occupy a two-story, 125,000-square-foot store on West Temple.

            Farrington says the combination of The Gateway and City Creek provides Salt Lake City with a tremendous retail presence that very few cities of similar size have in their downtown areas. “Just between the two centers there are almost 150 retail stores, including the two large department stores. Many cities, even cities bigger than ours, have lost all of their epartment stores downtown. We’ve got probably one of the highest concentrations for a market our size in terms of total retail activity,” he explains.

            Both Mathis and Farrington have high hopes for adding more retailers on the streets between The Gateway and City Creek. “We have already seen some interest from businesses that want to be close to City Creek, but not necessarily in it, to capitalize on the foot traffic without having the rent structure of City Creek,” says Farrington. He adds that the Downtown Alliance is looking at ways to knit the two projects together better—better signage for pedestrians and the TRAX lines, for example.

            As the City Creek Center prepares for its opening, empty retail space nearby is being absorbed rapidly. As a result, only about half a dozen retail spaces are available for rent within a block or two of City Creek. Taubman retail projects typically attract additional retailers that spillover into surrounding areas, “And that is clearly happening right now down town in Salt Lake City,” says Mathis.

            Will all of the retail growth drive up lease rates? Mathis thinks so, but says the market has a way of regulating lease rates. “As long as people are successful in their sales, that will justify whatever the lease rates are.”

            Farrington notes that some of the retailers that have had to put up with the construction mess have enjoyed cheap rent, but are now nervous that rents will rise. “If you are a property owner near City Creek, you have to think that if a major retailer couldn’t get into City Creek, they might be willing to pay a lot more to be nearby, and that may drive up rents around the City Creek development,” he says. “Rent is a function of sales. If you have good sales you can generally afford to pay more rent. It’s a two-edged sword.”

            Nonetheless, Mathis says the construction and opening of City creek Center is ushering in a new era for Salt Lake City, but it is really only a step in the development of the city. “This is an important milestone—but it is not a bookend. The city will continue to expand and evolve forever.”

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