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Gateway to liven up Salt Lake City’s downtown

By Edmund Mander

The Gateway, a 2.5 million-square-foot, mixed-use project in downtown Salt Lake City, is set to open in time for the 2002 Olympic Games.

A 2.5 million-square-foot, mixed-use project under construction in Salt Lake City will give the city something it has never had before, proponents say: a compelling downtown destination, with nearly 700,000 square feet of world-class, street-level shopping and entertainment.

The three-block redevelopment, called The Gateway and described as the largest undertaking in the city’s history, is scheduled to open in time for the 2002 Olympic Games. It also is seen by the developer as the crown jewel in a longer-term plan to develop 650 acres of surrounding land.

“This is going to pump Salt Lake City up;this is going to be the most exciting thing that has happened to Salt Lake City in years,” said Jake L. Boyer, project manager at The Boyer Co., the Salt Lake City firm behind the development. “It will really be a gathering place for the people of Utah.”

The $375 million Gateway is centered around the Union Pacific Depot, an architectural treasure in the style of the French Renaissance that once served as a grand entrance to the city in the golden age of railroad travel. Covering three whole blocks, the project’s tree-lined thoroughfares will feature restaurants, a children’s museum, a “boutique” hotel and possibly a planetarium. In addition, there will be 700 residential units, 500,000 square feet of office space and more than 4,000 enclosed parking spaces.

Salt Lake City has a clean, pleasant downtown, but does not offer much to draw visitors, according to Boyer and others. “There is no gathering place,” he said.

When business executives come to the area, they stay out near the airport and hold their meetings there, agreed John Jones, a Salt Lake City-based vice president at CB Richard Ellis, the international real estate services firm.

“Salt Lake City desperately needs something other than the Temple grounds as a draw,” Jones said, in a reference to the city’s fame as the world headquarters of the Mormon Church. “People are looking for something.”

But not everyone is cheering The Gateway, and one of its leading critics is recently installed Mayor “Rocky” Anderson, who pledged during his election campaign to rein in the project, claiming it would hurt downtown retail. He has scaled back public improvements in the area and expressed displeasure over $16.5 million in tax-increment financing redevelopment funds from the city, which Boyer negotiated with the previous administration.

“Redevelopment money is supposed to be used for redevelopment of areas, and in my view it’s far more crucial to have a vibrant, healthy downtown area than to try to create something new that’s going to undermine the downtown area,” Anderson was quoted as saying recently in The Deseret News, a Salt Lake City daily newspaper.

Anderson could not be reached for comment.

The owners of two downtown malls are opposing the project, too.

“This will be a third mall in a four-block radius; that’s an incredible amount of retail,” said David Neilson, manager for Crossroads Plaza, a 621,000-square-foot, four-level, locally owned mall on Main Street that was built in 1980 and offers a mix of national and local tenants. “That could have a profound effect on the downtown — not a good one,” he said.

Crossroads is across the street from the ZCMI Center Mall, a center built in 1975 by the Mormon Church and occupied by predominantly local and regional retailers.

Boyer and others say The Gateway poses no threat to the city’s center. On the contrary, the project abuts the downtown, and its array of successful national tenants will reverse a steady hemorrhaging of shoppers to the suburbs that has taken place in recent years, they argue. Since 1980 the city’s share of Salt Lake County’s retail sales has declined from 43% to 28%, despite the creation of 10,000 downtown jobs and a “several-fold” increase in convention business, according to a report on Gateway and the downtown by the Bureau of Economic and Business Research at the University of Utah’s David Eccles School of Business.

“[The mayor’s] worried about killing our Main Street, when our Main Street doesn’t exist,” Boyer said. “For years and years we’ve been underserved by retailers.”

Even Mayor Anderson, in a “State of the City” speech delivered in January, acknowledged the problem, blaming it for contributing to a hole in the budget.

“From the perspective of Salt Lake City, the situation is aggravated by the fact that our rates of growth in retail sales and sales tax revenues have plummeted in recent years,” he said. “Adjusted for inflation, the taxable sales grew at a rate of 11.11% in 1992; 10.82% in 1993; then dropped to 1.82% in 1997 and 0.65% — less than 1% — in 1998.”

The Gateway will generate $20 million a year in sales taxes and another $5 million in real estate taxes, while providing employment to about 6,000, according to The Boyer Co.

Many of the tenants coming into The Gateway will be new to Salt Lake City, and some will be new to Utah. Tenants include Ann Taylor Loft; bebe; J. Crew and its children’s store, Crew Cuts; Abercrombie & Fitch; California Pizza Kitchen; Flemings Prime Steakhouse; and Sur La Table, the high-end kitchen supply store.

The development also will have an 84,000-square-foot Galyan’s Trading Co. sporting goods store, Victoria’s Secret, Bath & Body Works and Nicole Miller.

Stores geared to young people will be located close to the Children’s Museum and a multiscreen cinema, while some of the high-end retailers will sit opposite a block of luxury condominiums and the hotel.

It also has drawn some interest from tenants in the Main Street area, and that has further irked the mayor. When Anderson learned that Nordstrom, an anchor at Crossroads Plaza, had been talking to Boyer, he hit the roof, according to Boyer and others.

“It really set him off,” he said.

In January, Anderson imposed a temporary moratorium on retail buildings larger than 45,000 square feet outside the Central Business District. It was lifted three weeks later by the City Council after Boyer agreed that for the first four years, existing Main Street merchants would make up no more than 10% of the retailers at The Gateway or occupy more than a tenth of the retail space. Violation of the agreement would cost Boyer a portion of the $18 million in reimbursements the city is due to pay for public roads and sidewalks constructed by the developer.

Nordstrom’s lease at Crossroads is due to expire in 2005, and Boyer said he does not know what the Seattle-based retailer plans to do. David Mackie, vice president of real estate at Seattle-based Nordstrom, told SCT the retailer has yet to decide whether it will relocate or stay where it is.

In the meantime, Boyer is focusing on completing the project in time for the Olympics. The games, he said, have helped everyone involved in the project to keep to the tight 23-month construction schedule.

During the Olympics about 10,000 media employees will be housed at The Gateway, and the nightly awards ceremony will take place a block away.

Heading up the project is H. Roger Boyer, Jake’s father, and his partner Kem Gardner. The company, founded in 1972, has developed more than 13 million square feet of retail and office space.

The Jerde Partnership International, based in Venice, Calif., is designing The Gateway, while its leasing is being handled by Carian Wills & Associates, of Beverly Hills, Calif., The Foy Bradford Co., of Chicago, and Colliers CRG, the international commercial real estate firm.

The project will make a profound improvement on Salt Lake City that will last long after the excitement over the Olympics has died down, Jake Boyer said. “It’s going to lift the tide of all our downtown.”