The Olympic Games skated and skied through Utah this year, leaving in the visitors' tracks an economic boost for Salt Lake City and the rest of the state. Even neighboring states Colorado and Idaho felt the benefits.
The Utah Governor's Office of Planning and Budget estimated that $2.8 billion in sales, or economic output, would be realized between 1996 and 2002 as a result of this year's Winter Olympics. Net visitor spending was predicted to reach $123 million. Utah hoped the Olympics would be an important source of new job growth — and it was. The Olympics were calculated in bringing 23,000 jobs with it, representing 21.4% of 2001's employment growth.
A net increase of 50,000 visitors per day during the Games was forecast out of a total of 70,000 visitors per day. Almost 29% of last year's population growth was estimated to have occurred because of the Olympics.
And now, with Salt Lake City's successful hosting of the games, Utah's capitol has entered the lexicon of world venues.
Enough building to meet demand
A glance at the 2000 Census figures points up the tremendous growth from 1990 to 2000 in the Intermountain West states. Colorado's population increase was a button-buster with a 30.6% increase, its population swelling from 3,294,394 to 4,301,261. Utah spurted up 29.6%, from 1,722,850 to 2,233,169. And Idaho's population shot up by 28.5%, from 1,006,749 to 1,293,953. Only Nevada and Arizona — two other Western states — posted bigger percentage increases (66.3% and 40%, respectively).
Those impressive population gains in Utah, Idaho, and Colorado mean that these states are on major retailers' site location lists. But the slowing economy of the past couple of years has meant that the pace of building in the retail market has kept up with demand but is not considered overbuilt because of very little speculative development.
Grocery-anchored shopping centers are the most favored retail investments, with credit single-tenant properties a close second, according to the Salt Lake City office of CB Richard Ellis. Buyers of both types of properties count on cap rates between 8.5% and 10%, with internal rates of return (IRRs) in the 11% to 14% range, reports thefirm.
In Salt Lake City — and by extension the region's other major cities — rents for new projects will continue to increase because of land andcosts, as indicated by CB Richard Ellis' 2001 market report on the city. Rents for existing projects are predicted to remain stable and increase slightly as long as vacancy remains tight. Big-box rents were not expected to rise, although national retailers' development costs were expected to grow.
Revitalizing downtown Salt Lake
To serve the long-term and the Olympics in Salt Lake City, The Boyer Co. opened the first phase of The Gateway this past November in downtown Salt Lake City. The crown jewel in the city's 600-acre Gateway redevelopment district, the multilevel, multi-use project is situated in a ripe-for-redevelopment but centrally located part of town. The Gateway is close to the Delta Center, home of the Utah Jazz basketball team; Temple Square, the city's No. 1 tourist attraction, drawing 6 million visitors a year; and the Salt Palace Convention Center, where 200,000 people attend meetings each year.
The Gateway's 2.5 million sq. ft. will comprise retail, hotel, office, residential, and cultural destinations on three blocks (28 acres) surrounding the historic Union Pacific Station, which will be completely renovated.
About 20 minutes south of the city along I-15 at Lehi, Gilad Development Inc. is assembling plans for a water-oriented entertainment/retail complex called the Port of Utah. According to Brian Tiedge, partner in the Englewood, Colo. office of MCG, the 1.28 million-sq.-ft. project will include stores, cafes, and a theater in a marketplace design inspired by port towns from the Mediterranean to the Far East. A 3,300-ft.-long canal, with working locks and replicas of historic ships, forms the project's centerpiece.
Colorado projects go vertical
In the region's major metropolitan markets of Denver and Salt Lake City, where national retailers are interested in locating in regional and community shopping centers to serve fast-growing markets, developable, ideal sites for retail are as scarce as they are anywhere.
“A mixture of uses in a vertical fashion is often seen in Denver's urban corridor,” says Tiedge. For example, at Aurora City Place, a 68-acre lifestyle center being developed in nearby Aurora by Miller Weingarten Realty LLC and designed by MCG Architecture, residential units will top retail space within an urban street scene, Tiedge says. The project will be anchored by a 185,000-sq.-ft. SuperTarget. Miller Weingarten is a local partnership of developer Skip Miller and Weingarten Realty of Texas. Site grading began in January, and construction is due to start later in the first quarter.
The Mills Corp. is targeting an October or November completion for Colorado Mills, a 1.2 million-sq.-ft. entertainment/retail destination in Lakewood, 10 miles west of downtown Denver. The project will include 18 anchor stores, more than 200 specialty retailers, and a variety of theme and casual dining restaurants and interactive entertainment venues. Tenants include Last Call by Neiman Marcus, Saks Off 5th, Gart Sports, Off Broadway Shoes, Bath & Body Works, The Children's Place, a Levi's/Dockers/Joe Boxer/Ancho store and a 16-screen united Artists cineplex.
Nearby, construction is already underway on the United States' largest urban development project — Stapleton. Celeveland-based Forest City Enterprises has already brought Super Wal-Mart, Home Depot and Sam's Club in as anchors for its 740,000-sq.-ft. Quebec Square, which will be the first retail component of the 7.5-square-mile mixed-use development to open. Just For Feet, Party City and Linens N Things have also signed leases at Quebec Square.
Mixed-use comes to downtown Boise
The expansion of downtown housing and retail is key to the success of Boise's recently developed Westside Downtown Master Plan, a 20-year revitalization blueprint for the fast-growing metropolitan area. The plan will include new parking facilities, construction of a new county courthouse, improved access to development financing, and an emerging focus on the River-Myrtle area as the state's most innovative business and residential development.
Also downtown, construction began Feb. 1 on the 14.5 million Idaho Place and Idaho Water Center projects on six acres between Front and Myrtle streets. The developers are the University of Idaho, Idaho State University, the U.S. Forest Service, the Idaho Department of Water Resources and the Capital City Development Corp. plus adevelopment company, Civic Partners Inc., which formed a locally based entity, Civic Partners of Idaho, for the project. Idaho Place will create seven buildings of three to six stories and three underground parking garages to consolidate facilities of the two educational institutions.
To be completed in Sept. 2003, Idaho Place will feature retail along both sides of Front Street, housing, parking and student services along street and plaza levels, offices, classrooms and research programs on the inside and upper levels, and parking below.
Already under way, the Idaho Water Center will consist of one 6-story, 216,000-sq.-ft. building, a 23,000 sq. ft., 3-level structure, and a one-level underground parking garage on four acres. The center will house the U.S. Forest Service, The Idaho Department of Water Resources and space for the University of Idaho's graduate research program. Retail and residential components also are planned. Completion is targeted for August 2003.
ZGA of Boise and NBBJ of Seattle are the planning and design team for the Water Center, as they are for Idaho Place. Civic Partners is leasing the site to the University of Idaho Foundation and acting as construction and leasing project manager. Financing is through low interest bonds, issued by The University of Idaho Foundation, which will be paid by a combination of tenant payments and private donations. Construction costs are being funded by loans obtained by all partners in the initial development. Tenants will be given the option of buying the portions of the buildings they occupy.
Paula Stephens is an Atlanta-based writer
Gateway opens new era for Salt Lake
Amazingly, the Boyer Co.'s Gateway urban project fills 700,000 sq. ft. of retail and entertainment space with a galaxy of non-anchor tenants, including Galyan's, Barnes & Noble, Abercrombie & Fitch, and J Crew. Crows Boyer's director of retail development Skip Stephenson in a tumble of mixed metaphors: “It's been a white-knuckle ride. We've been aiming for the moon, and we've been ready for touchdown three years out.”
But fill it he and Boyer Co. principals Roger Boyer and Kem Gardner did — a feat all the more remarkable because the company has been a developer of grocery-anchored strip centers. The project was completed in plenty of time for the city's Olympics visitors, with NBC taking 60 days' residence in The Gateway's 500 residential units.
The multilevel Gateway ushers in a new era of world-class retail shops for Salt Lake City, and, by extension, the other Mountain States. Negotiating with the House of Blues in January, Stephenson said The Gateway will have nine full-service restaurants and a food court, an IMAX giant-screen theater and planetarium, and the Children's Museum of Utah.
Designed by The Jerde Partnership International Inc., Los Angeles, as an urban village with streetscape appeal, The Gateway features an Olympic Legacy Plaza lined with cafes and shops. Stephenson likens the plaza's people space to Atlanta's popular Centennial Park, a legacy of the 1994 Summer Olympic Games.
— Paula Stephens
Breathing life into tired centers
Aging community centers with sagging sales are gaining new interest under the master touches of the Mountain States' retail redevelopment specialists.
In Denver, Miller Weingarten Realty LLC is creating the grocery-anchored Lowry Town Center as an adaptive reuse of a military base, according to Brian Tiedge, partner in MCG Architecture's local office. The former base's separate buildings will be connected via skybridges.
In Murray, Utah, a settled community on Salt Lake City's higher-demographic east side of Interstate 15, and south of the city, Intermountain Development of Salt Lake City, headed by J. Floyd Hatch, took “an old, tired 120,000-sq.-ft. shopping center and remodeled it into a 200,000-sq.-ft. center with a 58,000-sq.-ft. Albertson's,” according to project manager Mary Ricks. The 9th Street Marketplace opened in May 2001 and now boasts Blockbuster, Papa Murphy's Pizza, SuperCuts, Wendy's and Big Lots.
In Twin Falls, Idaho, Intermountain is redeveloping and expanding older Albertson's and Rite-Aid stores on Blue Lakes Boulevard to a 100,000-sq.-ft., 7-acre center. Albertson's is expanding from 40,000 to 57,000 sq. ft. A June 2003 opening is targeted.
— Paula Stephens