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2014 STATE OF DOWNTOWN 2013-2014 Economic Benchmark Report CContentsontents 04 08 12 16 20 2013 YEAR IN CURRENT EMPLOYMENT DOWNTOWN RESIDENTIAL REVIEW AND FUTURE OFFICE DEVELOPMENT MARKET 24 28 30 32 36 HOSPITALITY, RETAIL AND CULTURE AND TRANSPORTATION QUALITY OF TOURISM AND RESTAURANTS ENTERTAINMENT LIFE CONVENTION PURPOSE OF THE STATE OF DOWNTOWN The 2014 State of Downtown report for downtown Salt Lake City off ers a comprehensive analysis and factual update of the downtown economy to inform decisions for key stakeholders: property owners, investors, developers, retailers, brokers, policy makers and civic leaders. This study collects historic data to highlight trends and compare downtown to statewide and regional economic indicators. These comparisons are important to gauge opportunities for improvement and growth in the district. The following economic indicators will be treated with detail in the report: current and future development, employment, downtown offi ce market conditions, housing, hospitality, tourism, conventions, retail and restaurants, culture and entertainment, transportation and overall quality of life. 2013 YEAR IN REVIEW A vibrant metropolitan center is an important economic engine for the entire region. Downtown Salt Lake City is one of the region’s most dynamic and diverse economies. As such, Salt Lake City serves as a hub for culture, commerce and entertainment and is Utah’s capital city. Economic activity and tax revenues continue to recover from the Great Recession of Downtown retail sales 2007-2009 with retail sales continuing to reach new highs. The surge in activity is augmented by solid performance from City Creek Center and its 700,000 sq. ft. of retail space. However, reached all-time highs success is not only limited to the new mall; continued retail leasing activity on Main Street and at The Gateway Mall are indicators that downtown is poised to continue growing its share of with sales reaching Salt Lake County’s retail sales. over $800 million in eating, drinking, clothing, department and other categories. Table 1: Downtown Economic Profi le-2013 (Constant 2013 Dollars) Category Amount Employment 69,235 Wages Paid $2,645,796,000 Available Offi ce Square Footage 10,572,513 SF Offi ce Vacancy Rate 17.1% Retail $800,304,200 Retail Square Footage 2,400,500 Hotel Occupancy 64.7% City-wide Convention Delegates 197,809 Spending by Convention Attendees $183,962,370 Parking Spaces 33,000* Total Downtown Property Value $3,175,981,590 Total Acreage 501.02 Total Properties within Special Assessment Area 870 * Estimate of surface level and parking structures. Source: Bureau of Economic and Business Research, University of Utah, CBRE, Visit Salt Lake, Downtown Alliance. 2013 YEAR IN REVIEW 5 2013-2014 DOWNTOWN ECONOMIC HIGHLIGHTS Utah Legislature authorizes new convention Downtown Salt Lake City’s share of retail sales HOTEL facility development incentive provisions at an all-time high The legislation provides a post-performance Downtown retail sales reached all-time highs tax incentive to a private developer to build of more than $800 million for eating, drinking, public meeting room space in addition to clothing, department and other retail sales privately developed hotel rooms. The hotel is categories. While countywide sales are declining, expected to signifi cantly impact downtown’s downtown’s retail performance continues to convention business, which will in turn spill out grow with downtown representing 10.8% of total to existing hotels, restaurants and retail. The RFP county sales. process will begin summer 2014. A 24/7 lifestyle continues to grow Bi-weekly Winter Market debuts in Rio Grande Depot New retail, restaurants and bars continue to bring additional vibrancy and liveliness to downtown. Building on the success of the Downtown Notable openings are BEER BAR, Brio, Whiskey Farmers Market, the Winter Market—from Street, Bistro 222, Bodega, Good Dog, Red Hot, November through April—brought more than Spitz, From Scratch, Copper Common, Rocket 24,000 people into a challenged downtown Fizz and the Urban Arts Gallery. neighborhood. Each Winter Market supported more than 50 local businesses and family farms while indirectly injecting positive impacts on neighboring business and contributing to a lively atmosphere. The Summer Downtown Farmers Market helps to attract more than 10,000 people weekly and acts as an incubator for as many as 300 small local businesses. 6 2013 YEAR IN REVIEW 2014-2015 DOWNTOWN OPPORTUNITIES Depot district redevelopment The Gateway development created a strong foundation for this burgeoning entrepreneurial and transit-oriented district. With a public market planned, a 10-acre urban park and over 1,000 new residential units expected, this district has the potential to be a thriving neighborhood in downtown. However, the district needs additional resources and approaches to help service providers and their clients address issues of homelessness and vagrancy. Nightlife economy A vibrant nightlife is an important part of a dynamic and diverse downtown that is welcoming to locals and visitors alike. While new restaurants and bars are opening doors downtown, current statewide liquor laws signifi cantly impact tourism potential and additional development. Consensus-driven policies should address issues of “the Zion curtain,” intent to dine and the number of full-service restaurant licenses for downtown. Residential development Salt Lake City is in the midst of a dramatic transformation with new business, shopping, dining, arts and entertainment rising throughout the district. However, it is residents that bring the life and soul to a true urban center. Downtown needs more residential opportunities for all ages and income levels. Year-round residents help to create a livelier, more dynamic community. Development-friendly codes and zoning One of the biggest concerns threatening any new investment in downtown development projects are impact fees and demolition ordinances. Roadway fees for offi ce infi ll development and Parks impact fees for residential dwellings undermine investments in new development. Local policies should incentivize developers in order to remain competitive in attracting business and residents to the downtown area. 2013 YEAR IN REVIEW 7 CURRENT AND FUTURE DEVELOPMENT Continued development is vital to the future success and vibrancy of downtown. New offi ce, residential, hotel, and arts and entertainment developments will continue to redefi ne downtown’s growing skyline and bring additional employees, residents, visitors and wealth into the district. OFFICE DEVELOPMENT 101 Tower The Boyer Company’s 101 Tower is open and currently for lease on the corner of 100 South and 200 East. The building, designed to service Class A offi ce tenants, consists of a granite and glass exterior with steel frame construction. The $34 million tower has 144,000 sq. ft. of leasable space and an on-site parking structure. 111 South Main 111 South Main Tower is a new Class A development being developed by City Creek Reserve. Construction of the 24-story offi ce building adjacent to City Creek Center is underway, along with the neighboring George and Dolores Eccles Theater. Featuring 440,452 sq. ft. of offi ce space, the anticipated LEED-certifi ed gold project will help bolster downtown’s economy with added businesses and jobs. Parking, access, functionality and design will be integrated from the foundation through the façade so that the project as a whole will extend the investment in City Creek down Main Street and throughout the rest of downtown. 151 State Street The Boyer Company’s 151 State Street project consists of an 18-story offi ce building with a full basement and rooftop penthouse. The building footprint is approximately 22,000 sq. ft. and the building height will be 273 feet to the fl oor level of the mechanical penthouse, with the penthouse extending approximately 22 feet in height. The schedule for opening and a time frame for construction have yet to be released. A parking structure adjacent to the development site is currently under construction. Broadway Media Center Wasatch Partners is in the process of retrofi tting the bottom two fl oors of the 50 West Broadway Offi ce Tower to accommodate a full-service restaurant and Wiseguys Comedy Club, which hopes to open for business in September 2014. The sky bridge connecting the Tower to the former Key Bank Building to the west is also being converted to house a Broadway Media Group radio station. RETAIL DEVELOPMENT Three and Three Un.commons Located on 300 East and 300 South, Three and Three Un.commons is a 16,000 sq. ft. renovated restaurant and retail space leasing at $22 per square foot. The former antique renovation will include a market that focuses on fresh, local produce and a restaurant featuring natural foods. CURRENT AND FUTURE DEVELOPMENT 9 RESIDENTIAL DEVELOPMENT Edison Quarter La Porte Group is currently in the construction phase of a mix of 180 new market-rate residential units along with local retail, theater space and food outlets on 237 State Street. Other planned highlights for the project include the restoration of the Cramer House into a restaurant space and a new community piazza. The $39 million project is scheduled to be completed in 2015. Liberty at Gateway Cowboy Partners is the developer of the Liberty at Gateway, a 160-unit, 203 parking stall, market-rate residential apartment project located on two acres of land directly west of The Gateway. The $25.2 million dollar project fronts most of 500 West from South Temple to 100 South and opened spring 2014. Monthly rental rates start at $699 for studios up to $1,302 per month for two-bedroom units. Cowboy Partners also has another apartment project that is slated to begin construction later this spring on the west side of 200 East between 100 and 200 South. Broadway Park Lofts Located at 360 West 300 South, Broadway Park Lofts is an 82-unit downtown loft community adjacent to the Pioneer Park.
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