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 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. 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 ’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, , 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. The project was acquired by Clearwater Homes and is currently 95% complete.

Westgate Business Center Clearwater Homes will begin to redevelop the historical Westgate Business Center on the northwest corner of 200 South and 300 West into 38 luxury units starting in September 2014. Units will range in size from 750 to over 2,000 sq. ft. The 73,000 sq. ft. building will feature geothermal heating and cooling, as well as LEED Gold certifi cation.

HOTEL DEVELOPMENT

Hyatt House Hotel and Courtyard by Marriott Maryland-based Alex Brown Realty Inc., in conjunction with PEG Development and Blue Diamond Capital, is currently building two hotels on the block directly south of the Energy Solutions Arena. The fi rst, a 159-room Hyatt House Hotel with a 349-space parking garage on the southwest corner of 100 South and 300 West, is expected to open in fall 2014. The second hotel will be a 175-room, select-service Courtyard by Marriott. The Marriott is scheduled to open in 2015.

AIR Hotel AIR Hotel is a 14-story boutique hotel development by Provo-based KPB Equities. Located on the northwest corner of 400 South and West Temple, the hotel will include restaurants, a high-end nightclub, rooftop pool and club and a 350-person, multi-use entertainment space. Formerly known as the AIR Center, the project is expected to break ground in fall 2014. A hotel operator has yet to be announced.

10 CURRENT AND FUTURE DEVELOPMENT ARTS AND CULTURAL VENUE DEVELOPMENT

The George S. and Dolores Doré Eccles Theater Eccles Theater: Demolition and construction for the $117 million George S. and Dolores Doré Eccles Economic Benefi ts at a Glance Theater (formerly known as the New Performing Arts Center) began in spring 2014. The 2,500-seat, Broadway-style theater is expected to be completed by summer 2016 and will be designed to enhance the cultural and economic vitality of the $200-$500 Million region by attracting fi rst-run touring Broadway shows as well as other national and Construction Value local music, comedy and family entertainment acts. Located at 135 South Main, the theater is also anticipated to continue the revitalization of Main Street and add a dynamic new festival street component on Regent Street, bolstering investments made by City Creek (one block north) and Salt Lake City’s (one 2,500 Construction Jobs block south). The theater is being developed in tandem with the 111 South Main Street Offi ce Tower.

Jessie Eccles Quinney Center for Dance and Capitol Theater Renovation 115-168 Permanent Jobs Ballet West and the Salt Lake County Center for the Arts have come together in a public-private partnership to renovate the Capitol Theatre and build the Jessie Eccles Quinney Center for Dance, which will be home to local arts groups Ballet West and the Ballet West Academy. The $33.4 million, 5-story addition to $1 Million Capitol Theatre is currently under construction on the lot just west of the existing New Annual Property Tax Value facility located at 50 West 200 South. The new facility will provide additional classrooms and rehearsal space, offi ces and technical support areas for both the company and the Ballet West Academy. The renovations to the theater itself were $9.4 Million Per Year completed winter 2013 and revamped the historical theater to expand the lobby Estimated Annual Direct, and concessions, increase restroom facilities, improve seating and sight lines, and Indirect and Induced Spending add a new banquet hall. (based on theater alone)

PUBLIC LANDMARK DEVELOPMENT

New United States Courthouse for the District of Utah The new United States Courthouse is located behind the existing Frank E. Moss Federal Courthouse on 351 South West Temple. Construction for the 10-story, 368,000 sq. ft. building began on January 19, 2011 and opened spring 2014. The entire project cost was estimated to be $211 million, providing 1,500 to 2,000 construction jobs.

Salt Lake City Public Safety Building Located on the boundaries of downtown at 300 East and 500 South, the new 313,662-sq.-ft., 4-story public safety building and emergency operation center houses essential emergency services, including police, fi re and emergency response call centers, as well as community meeting rooms and department offi ces. The $125 million project opened summer 2013.

CURRENT AND FUTURE DEVELOPMENT 11 EMPLOYMENT A total of 660 jobs were added to the downtown core in 2013. The small growth in comparison to 2012’s increase of 3,725 jobs can be attributed to the 2012 opening of City Creek Center. Total employment in downtown is 69,235 with an average annual wage of $42,727. Offi ce, restaurant and Table 2: Estimated Employment Change by Sector Downtown retail employment 1990 2001 2005 2007 2013 1990-2013 2007-2013 account for 95% of all Offi ce 42,000 51,350 51,250 53,000 55,500 32.1% 4.7% Restaurants 3,350 7,300 7,400 7,200 7,650 128.4% 6.2% jobs in downtown and Retail 1,550 2,700 2,600 1,800 3,350 116.1% 86.1% 96% of the wages paid Hotels 1,250 1,800 1,800 1,800 1,800 44.0% 0.0% in 2013. Manufacturing 500 500 450 50 50 -90.0% 0.0% Miscellaneous 500 750 1,100 1,100 1,050 110.0% -4.6% Total 49,150 64,400 64,600 64,950 69,235 40.9% 6.6%

Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance.

Offi ce workers dominate employment in downtown. In fact, 80.2% of total employment is classifi ed as offi ce jobs. Restaurant employment ranks second with 11% of all jobs. The restaurant sector has had the highest long-term growth rate, increasing by 128.4% since 1990.

Table 3: Distribution of Employment by Sector Downtown 1990-2013 1990 2001 2007 2013 Offi ce 85.5% 79.7% 81.6% 80.2% Restaurants 6.8% 11.3% 11.1% 11.0% Retail 3.2% 4.2% 2.8% 4.8% Hotels 2.5% 2.8% 2.8% 2.6% Manufacturing 1.0% 0.8% 0.1% 0.1% Miscellaneous 1.0% 1.2% 1.7% 1.5% Total 100.0% 100.0% 100.0% 100.0%

Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance.

EMPLOYMENT 13 Offi ce, restaurant and retail employment account for 95% of all jobs in downtown and 96% of the wages paid in 2013. Downtown’s 69,235 workers earned $2.9 billion in wages and salaries in 2013, with $2.6 billion paid to offi ce workers. In infl ation adjusted dollars, total wages paid to offi ce workers since 2007 increased by 12%. This increase is due to a growing number of offi ce jobs as well as an increase in real wages. Restaurant workers were paid $125 million in wages during 2013; this fi gure understates total restaurant income because it does not include gratuity payments. With the additional retail workers at City Creek Center, total wages for the retail sector are up 92% compared to 2007.

Table 4: 2013 Wages by Sector Downtown Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance.

RESTAURANTS RETAIL OFFICE

Average Annual Wage ...... $16,452 Average Annual Wage ...... $31,884 Average Annual Wage ...... $47,672 Employment ...... 7,650 Employment ...... 3,350 Employment ...... 55,500 Total Wages ...... $125,857,800 Total Wages ...... $106,811,400 Total Wages ...... $2,645,796,000

HOTELS MANUFACTURING MISCELLANEOUS

Average Annual Wage ...... $23,592 Average Annual Wage ...... $40,524 Average Annual Wage ...... $33,550 HOTEL Employment ...... 1,800 Employment ...... 50 Employment ...... 1,050 Total Wages ...... $42,465,600 Total Wages ...... $2,026,200 Total Wages ...... $35,227,500

$42,727 69,235 $2,958,184,500 TOTALS Average Annual Wage Total Employment Total Wages

14 EMPLOYMENT The percent change in wages was most signifi cant in the retail sector. City Creek Center is seen as the strongest impetus for this growth; however, the combined impact of new retail development throughout downtown cannot be ignored. With additional new offi ce space coming to the market and healthy restaurant growth, expect employment numbers to continue to grow in 2014-2015. In the long term, downtown will benefi t from national trends and growing interest in urban growth and metropolitan living. Aggressive marketing and recruitment strategies will help to put downtown ahead of its suburban competitors, particularly in the surrounding counties of Salt Lake, Utah and Davis.

Table 5: Percent Change in Wages Paid Downtown (2013 infl ation adjusted dollars) Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance.

RESTAURANTS RETAIL OFFICE

2007 (Million) ...... $108.8 2007 (Million) ...... $54.6 2007 (Million) ...... $2,362.4 2013 (Million) ...... $125.9 2013 (Million) ...... $106.8 2013 (Million) ...... $2,645.8 Percent Change ...... 15.7% Percent Change ...... 95.7% Percent Change ...... 12.0%

HOTELS MANUFACTURING MISCELLANEOUS

2007 (Million) ...... $44.4 2007 (Million) ...... $2.1 2007 (Million) ...... $36.1 HOTEL 2013 (Million) ...... $42.5 2013 (Million) ...... $2.0 2013 (Million) ...... $35.2 Percent Change ...... -4.3% Percent Change ...... -4.9% Percent Change ...... -2.4%

$2,608,400,000 $2,958,200,000 13.4% TOTALS 2007 Total Wages Paid 2013 Total Wages Paid Total Change 2007-2013

EMPLOYMENT 15 DOWNTOWN OFFICE MARKET Salt Lake City’s downtown offi ce market experienced modest improvement in 2013. Looking ahead, a vibrant and evolving downtown will present new opportunities for businesses. In particular, a generational shift, availability of space, amenities and access to transportation will infl uence growth and activity in the area. A generational shift, The vacancy rate in downtown Salt Lake City decreased by 170 basis points to 17.1% in 2013; availability of space, demand was most concentrated among Class B properties, which accounted for the majority of this improvement. The average asking lease rate for the downtown market increased by amenities and access $0.23 to $21.34 per sq. ft., with the largest increases occurring in Class A and B properties. to transportation will infl uence growth and Table 6: Downtown Offi ce Market Characteristics (2013) activity in the area. Central Business District Base Square Feet Lease Rate (FSG) Number of Buildings Class A 3,672,881 $27.11 15 Class B 2,656,598 $21.56 36 Class C 1,498,562 $16.96 59 Total Leasable 7,096,041 $22.11 110

*Buildings over 20,000 SF in downtown. Source: CBRE.

Table 7: Historical Downtown Offi ce Vacancy

25% Class A - Class B - Class C - All Classes -

20% 23.2% 22.0% 20.6% 20.6% 20.1% 19.6% 19.6% 19.0% 18.8% 18.2% 15% 18.2% 17.5% 17.1% 17.0% 16.8% 16.7% 16.6% 15.7% 14.6% 14.6% 10% 11.7% 11.3% 10.9% 10.7%

5%

0% 2009 2010 2011 2012 2013 2014 (YTD) Source: CBRE.

DOWNTOWN OFFICE MARKET 17 ce Buildings ce

GREENbike TRAX Light-Rail TRAX Stations Stations Share Bike Residential Residential Future DOWNTOWN OFFICE MARKET DOWNTOWN Downtown Offi Downtown 18 Table 8: Historical Offi ce Lease Rates for Downtown and Salt Lake County Utah’s business friendly environment, ability to accommodate growth, and low costs will continue to $32.50 attract businesses and support growth for existing $30.00 fi rms. As evidenced by the latest average asking rates for downtown offi ce markets in the region, Salt Lake $27.50 remains competitive from a cost perspective. $29.44

$25.00 $27.91 $27.86 $27.86 $27.52 $27.36 In the coming years, downtown Salt Lake City will $22.50 benefi t from a generational shift. According to Nielsen research, Salt Lake City’s concentration of “Millennials” $20.00 (those born between 1977 and 1995) is second in the $21.11 $21.58 $21.56 $21.47 $21.46 $21.34 $21.28 $21.25 $17.50 $21.07 $20.53 nation. This generation, also commonly referred to as $20.09 $20.05 $19.70 $19.54 $19.12 “Gen Y,” is becoming more important to employers $15.00 as they make up a larger share of the workforce. The $16.37 Downtown Asking Lease Rates Lease Asking Downtown $16.28 $16.20

$12.50 $15.64 same research shows that almost two-thirds of this $14.75 group prefers to live in mixed-use communities in $10.00 Class A Class B Class C Downtown Avg. County Avg. close proximity to amenities—the type of environment a downtown off ers. In fact, 40% of this group indicates Source: CBRE. - 2010 - 2011 - 2012 - 2013 - 2014 (YTD) they would like to live in an urban environment in the future. Quantitative regional research from the Downtown Alliance indicates that 41% of Utahns Table 9: Regional Downtown Lease Rates between the ages of 18 and 24 want to live downtown.

$35.00 Utah’s concentration of Millennials bodes well for $30.00 the future of downtown Salt Lake City. Locally, some employers, particularly in the tech sector, are utilizing $25.00 the downtown environment as way of broadening $31.07 $30.17 their appeal and attracting the best and brightest to $20.00 their fi rms. $23.86 $15.00 $21.28 $21.06 As growth occurs, availability of offi ce space remains $10.00 healthy. Recently completed projects have created ample vacancies for new, large tenant leasing in $5.00 the near term. This, in addition to new and planned construction, is ensuring the availability of space for $0.00 larger offi ce users. Downtown’s appeal to younger Seattle Denver Portland Salt Lake City Phoenix workers, superior transportation infrastructure and Source: CBRE. ability to accommodate growth with available real estate give reason for continued optimism for the area’s future.

DOWNTOWN OFFICE MARKET 19 RESIDENTIAL The number of downtown residential properties has increased Table 10: Inventory of Condominium Units in Downtown Since 1990 signifi cantly over the past decade, with open lofts, luxury Name Address Units Year Built condos and aff ordable single-family housing units coming Belvedere* 29 South State 131 1978 online in several sections of the district. This is part of a nationwide trend, with most urban metro areas growing at a American Towers 46 West 300 South 370 1983 faster rate than their surrounding suburbs. Driving the urban Eagle Gate 115 East South Temple 66 1983 living resurgence are young adults (18-29 year olds) interested in living, working and playing in dense metropolitan areas. Warehouse Condominiums** 317 West 200 South 25 1997 Dakota Lofts** 380 West 200 South 39 1997

New residential housing growth remains consistent in The Club 150 South 300 East 47 1999 downtown Salt Lake City with a total of 460 units having opened or broken ground in 2013. There has also been a Broadway Lofts** 159 West Broadway 58 1999 substantial amount of residential investments just outside Pierpont Lofts** 346 West Pierpont 42 1999 of downtown. However, a signifi cant increase in impact Tire Town** 300 South 300 West 3 2000 fees threatens to undermine additional needed housing investments. Impact fees are designed to compensate a Karrick Building** 236 South Main 9 2001 community for the cost of extending infrastructure as required The Plaza 300 South State Street 5 2001 to support new development. Impact fees are assessed to new Uff ens Market Place 336 West 300 South 45 2003 developments as a condition of development approval, and are calculated to cover a proportionate share of the capital Library Square 226 East 500 South 29 2004 costs needed to serve the proposed development. Parc at The Gateway 14 South 400 West 152 2004

Brooklyn Condominiums 700 North 300 West 36 2005 In 2012, Parks impact fees for multi-family dwellings increased from $681 per unit to $3,999 in Salt Lake City, a Westgate (Phase I) 200 South 238 West 73 2006 391% increase. After pushback from the local development Metro Condos 350 South 200 East 117 2006 community, the Salt Lake City Council voted to set the Parks fee at $2,875 per unit for two years with the fee returning to Sampson Altadena* 276 East Broadway 18 2006 $3,999 at the end of the two year period if a new plan has not 35 West 300 South* 80 South 300 West 8 2007 been adopted by spring 2014. Broadway Tower* 300 South 230 East 96 2007

Patrick Lofts 163 West 200 South 40 2008

Promontory 99 Wes South Temple 185 2011

Richards Court 45 East South Temple 90 2011

The Regent 45 East 100 South 149 2011

Liberty at Gateway 500 West South Temple 160 2014 New residential growth remains Broadway Park Lofts 300 South 350 West 82 2014 consistent in downtown. Driving the Edison Quarter 237 South State 180 2014 urban living resurgence are young adults Westgate Business Center 300 West 180 South 38 2015 interested in living, working, and playing The Cascade 90 West 100 South 115 TBD * Converted for apartment use in dense metropolitan areas. Source: Downtown Alliance.

RESIDENTIAL 21 Downtown Residential Buildings

22 RESIDENTIAL Plan as Adopted by the Council in 2012 2012 IMPACT FEES AT A GLANCE • Parks Impact fee $3,999 per unit • Roadway fee collected citywide • Roadway fee used for road construction and other modes of transportation • Fees take eff ect January 2013

2013 Salt Lake City Administration’s Recommendation January 2014 • Parks fee decreased to $1,752 • $562 increase per year for fi ve years reaching $3,999 • Collect Roadway fees in NW quadrant and west side industrial areas • Refund diff erence in Parks fee collected in 2013 • Refund Roadway fees collected outside NW quadrant and west side industrial areas

2014 While the reduction in fees to $2,875 per residential unit will help developers in the short term, the return to the original amount of $3,999 by 2015 could signifi cantly impact Final Salt Lake City Council Approval 2014 future development projects. Low interest • Reopen the Impact Fee Facilities Plan rates, combined with growing demand, • Reassess the City’s priorities for projects have allowed developers to continue to • Evaluate level of service required for city growth invest in residential apartments. If either • Create service areas based on growth dynamic changes signifi cantly or impact fees • Collect fees for roadway construction growth areas increase, the margins will not exist to allow • Create separate bike and pedestrian fees development to continue. City policy should • Charge Parks fees based on bedrooms or sq. ft. rather than per door focus on long-term fee structures combined • Assess fees based on geography with incentives for sustainable building to • Parks fee decreased to $2,875 per residential unit 2015 foster a more stable residential development environment in the urban center.

RESIDENTIAL 23 HOSPITALITY, TOURISM AND CONVENTIONS Utah’s world-class outdoor recreation and tourism opportunities fuel the state’s economy and create a Annual Statewide Visitors great quality of life for its residents. More than 18 million passengers arrived at Salt Lake International Source: Utah Offi ce of Tourism. Airport in 2013. Visitors included 7.1 million recreational visits to Utah’s fi ve national parks and another 4.9 million visits to Utah’s 43 State Parks. Utah’s 14 ski resorts hosted 4.1 million skier days, a 4% increase over the previous year. 18,617,769 Salt Lake International Airport Just 10 minutes from an international airport, downtown Salt Lake City is a central terminus for Utah’s tourism destinations. It’s also conveniently located at the base of a magnifi cent part of the Rocky Mountain Range known as the Wasatch Front. Downtown is less than 45 minutes from seven world-class 7,135,076 ski resorts and a day’s drive from 48 state and 5 national parks. In addition to being a gateway to Utah’s National Park Recreation Visits outdoor recreation opportunities, downtown is the convention tourism destination for the entire state and a regional leader in the convention business.

The Salt Palace Convention Center is the main driving force for Salt Lake City’s convention industry. 4,923,727 However, surrounding convention district hotels also attract a convention business of their own. The State Park Recreation Visits conventions held in hotel meeting spaces are smaller than citywide conventions but still contribute important revenue to downtown’s economy.

In 2014, the Utah State Legislature approved legislation that established a tax credit process for a private owner of a new “qualifi ed convention hotel” in Salt Lake City. Criteria for a developer and hotel to qualify for the tax credit are as follows:

• Hotel must include at least 85 sq. ft. of convention meeting space per guest room. • Hotel must be a full-service operation built after July 1, 2014. • Hotel will be located within 1,000 feet of a convention center. • Total project investment includes a minimum of $200 million in private money. • The incentive may only be used for the construction of convention, exhibit or meeting space within the qualifi ed hotel, and the acquisition or construction of related amenities, fi xtures or other improvements.

2013 Citywide Conventions 25 $930 198K $1.8M CITYWIDECITYW AVERAGE CONVENTION TOTAL CONVENTION TOTAL SPENDING CONVENTIONSCON DELEGATE SPENDING DELEGATESDELE BY CONVENTION PER DAY DELEGATES

Source: Visit Salt Lake. 25 93001988HOSPITALITY,1.8 TOURISM AND CONVENTIONS 25 Downtown Existing Hotels and Convention Center Boundary

26 HOSPITALITY, TOURISM AND CONVENTIONS Table 11: Estimated Spending Impacts of a 1,000 Room Table 12: 2013 Monthly Average Occupancy Rates, ADR*, and RevPAR** for Convention Hotel in Salt Lake City Salt Lake County Hotels Type of Spending Construction Operations (annual) Month Occupancy% ADR ($) RevPAR ($) Direct Hotel $335.2 million $83.7 million January 61.5 104.37 64.18 Direct Convention February 68.5 99.97 68.49 - $13.9 million Delegates March 69.7 97.91 68.20 Indirect and Induced $266.6 million $72.8 million April 70.5 94.92 66.89 Total $601.8 million $170.4 million May 63.6 90.19 57.32

Source: Strategic Advisory Group (SAG). June 73.8 93.72 69.16 July 71.1 97.67 69.43 August 73.3 97.60 71.58 According to a study by Strategic Advisory Group, moving forward with the convention hotel will net September 68.4 93.99 64.31 the State and local governments approximately $500 October 68.5 101.63 69.59 million in additional tax resources. An approximate November 52.0 89.45 45.54 $99.5 million investment compared to the $600 million December 51.0 87.99 44.85 tax stream over the same time period equates to a 12 Month Average 65.9 95.78 63.29 14.6% return on investment over a payback period of 7.5 years. * ADR = Average daily rate Source: Visit Salt Lake, STR. ** RevPAR = Revenue per available room A convention center headquarter hotel will fully leverage signifi cant investments in the Salt Palace Table 13: 2013 Monthly Average Occupancy Rates, ADR, and RevPAR* for Convention Center and increase citywide economic Convention District Hotels impacts. The hotel will also serve as a symbol of the city, county and state’s organized plan for establishing Month Occupancy% ADR ($) RevPAR ($) Salt Lake City as one of the country’s premier January 58.2 126.29 73.55 convention and tourist destinations. February 67.2 121.23 81.51 March 65.8 119.48 78.61 April 70.2 119.42 83.88 May 60.5 111.43 67.43 June 73.6 115.34 84.89 July 68.1 119.71 81.55 August 70.2 118.32 83.11 September 69.5 115.32 80.16 October 72.1 131.05 94.54 November 51.4 109.49 56.29 December 49.8 103.37 51.45 12 Month Average 64.7 117.54 76.41

* ADR = Average daily rate Source: Visit Salt Lake, STR. ** RevPAR = Revenue per available room

HOSPITALITY, TOURISM AND CONVENTIONS 27 RETAIL AND RESTAURANTS Retail sales in downtown totaled $800.3 million in 2013, an all-time high in infl ation adjusted dollars. The previous record, set the prior year, was $793.3 million. City Creek Center continues to play a large role in retail sales, acting as a driving force for the surge in sales with its 700,000 sq. ft. of retail space. While retail sales downtown have recovered from the recession, that is not the case countywide. Salt Lake County’s selected retail sales activity is still down 20% from the peak of 2007. The downtown and county comparison includes only those categories relevant to downtown retail. For instance, retail sales of automobiles, gasoline, building and garden were not included. These retail categories have limited activity downtown. The broad retail categories used for comparison were: clothing, furniture, restaurants (including fast food and drinking establishments), department stores, general merchandise and specialty retail (books, stationary, gifts, luggage, sporting goods, hobbies, etc.). In 2013, downtown captured 10.8% of sales in the county, the highest share in recent years. Due in part to City Creek Center, downtown has drawn an increased number of retail shoppers from the suburbs.

Table 14: Selected Retail Sales in Salt Lake County and Downtown (Zip Codes 84101 and 84111: 2013 Dollars) Year County (000) Downtown (000) Share of County 2005 $8,395,801 $675,578 8.0% 2006 $9,056,024 $727,061 8.0% 2007 $9,351,220 $791,460 8.5% 2008 $7,313,282 $685,626 9.4% 2009 $6,835,099 $698,745 10.2% 2010 $6,223,258 $643,788 10.3% 2011 $7,097,341 $580,503 8.2% 2012 $7,534,448 $793,376 10.5% 2013 $7,438,307 $800,304 10.8%

Source: Utah State Tax Commission.

Clothing and shoes sales totaled $157.5 million in 2013. This is a decrease from the record year in 2012, where total clothing and shoes sales totaled $168.1 million. This decrease can be attributed to declining sales at one of downtown’s major malls, The Gateway. Eating and drinking remains the top-ranked retail activity in downtown with $308 million in sales (accounting for nearly 40% of retail activity). In recent years this sector’s share has been as high as 55% of retail sales. Twenty years ago, clothing and shoes accounted for as much as 45% of retail activity.

Table 15: Selected Retail Sales by Category in Downtown Salt Lake City (2013) Retail Sales % Share Eating and Drinking $308,971,424 38.6% Clothing and Shoes Sales $157,572,116 19.7% Department Store Sales $99,439,027 12.4% Other Retail Sales $234,321,633 29.3% Total $800,304,200 100.0%

Source: Utah State Tax Commission.

RETAIL AND RESTAURANTS 29 CULTURE AND ENTERTAINMENT Home to museums, performing arts and music theaters, a professional sports arena and large community spaces, downtown Salt Lake City is the cultural and entertainment center of the region and a premier destination in the Intermountain West.

While physical brick–and-mortar developments are important to downtown, signature events and festivals defi ne what it means to be a great city and create emotional connections between a community’s population and their urban center. These events showcase a city’s physical and cultural identity, creating a sense of ownership and pride for residents and visitors alike. Some of the biggest signature events include the Twilight Concert Series, Downtown Farmers Market, Dine O’ Round, EVE, Holiday Lights, Utah Arts Festival, Greek Festival, Living Traditions Festival, Pride Festival, Tastemakers, Gallery Stroll, Days of ‘47 Parade and Rodeo, Urban Arts Fest, and Urban Flea Market.

Table 16: Arts and Cultural Venues in Downtown Salt Lake City Location Capacity 2013 Attendance # of Events Type of Facility Abravanel Hall 2,768 142,450 122 Performing Arts Capitol Theatre 1,876 81,964 142 Performing Arts Jeanne Wagner Theatre 501 70,594 237 Performing Arts Leona Wagner Black Box 200 15,129 123 Performing Arts Studio Theatre 75 3,040 76 Performing Arts Off Broadway Theatre 250 N/A N/A Comedy/Performing Arts The Depot 1,200 N/A N/A Live Music The Complex-The Grand 850 80,000 28 Live Music The Complex- Rockwell 2,500 80,000 15 Live Music The Complex- Vertigo 425 80,000 52 Live Music The Complex- The Vibe 200 80,000 52 Live Music In the Venue 1,300 N/A N/A Live Music Discovery Gateway 1,500 229,666 N/A Children’s Museum The Leonardo 1,000 34,195 N/A Science Museum Utah Museum of Contemporary Art 500 47,966 103 Contemporary Art Museum Hope Gallery and Museum of Fine Art 300 N/A N/A Art Gallery Clark Planetarium 900 304,180 7,060 Science Museum Energy Solutions Arena 19,911 1.7 million 151 Sports Arena Totals 36,256 2.9 million 8,161

Source: Salt Lake County for the Arts, Clark Planetarium, Larry Miller Sports Properties, United Concerts, Discovery Gateway, Downtown Alliance. * Many facilities also have event space for special events. ** All of Complex facilities totaled 80,000. Facility specifi c numbers N/A.

CULTURE AND ENTERTAINMENT 31 TRANSPORTATION Downtown Salt Lake City’s transportation infrastructure provides unparalleled access from all parts Average Weekday Downtown of the Wasatch Front. At the core of this infrastructure are well-maintained roads, bicycle lanes and UTA TRAX Boardings sidewalks along with the nation’s fastest growing public transit networks.

Downtown is easily accessible from two of the state’s busiest highways, I-15 and I-80. I-15’s main 1,185 entrance and exit points into downtown are located at 400 South, 500 South and 600 South, which 500 West and North Temple see an average of 94,000 vehicles per day. Other signifi cant roads serving downtown are Beck Street and State Street. 2,627 Arena Station Downtown is also home to the intermodal hub (250 South 600 West), which acts as a multi-modal nexus for UTA’s TRAX light rail system, FrontRunner, UTA local bus service, Amtrak, Greyhound, U Car Share and SLC GREENbike. 3,529 City Center Station Multiple transportation options play a role in attracting more businesses, residents and visitors into downtown Salt Lake City. While the automobile still prevails as the most common mode of transportation in and out of downtown , public transit, biking and walking are all growing in popularity. 6,388 UTA TRAX boardings at the 10 downtown stops averaged a total weekday ridership of 21,555. In Court House Station April 2013, GREENbike launched its inaugural season with a network of 10 fully automated bike share stations and 65 bicycles. Immediately, the system garnered widespread usage necessitating 2,061 an expansion in July 2013. This included the addition of two new stations and the expansion of fi ve existing stations. The bike share network of 12 stations and 75 bikes has proven to be useful for both residents and visitors. GREENbike’s 2013 season produced 26,000 bike trips, eliminated more than 52,000 vehicle miles traveled (VMT) and 12,000 vehicle cold starts. In 2014, GREENbike plans to 665 expand existing stations and add seven new stations (19 total stations), resulting in an estimated Old Greek Town Station 45,000 trips, curtailing more than 93,000 total VMT, and more than 21,000 cold starts. Additionally, GREENbike estimates its users eliminated more than 66,000 pounds of CO2 and burned more than 2.7 million calories in 2013. 1,564 Library Station 1,032 1,683 Salt Lake Central Station 1,153 Temple Square Station 21,555 GRAND TOTAL

Source: .

TRANSPORTATION 33 Downtown Surface and Structure Parking

34 TRANSPORTATION Several additional planned transportation Table 17: Downtown Transportation Survey - Transportation Within Downtown projects will enhance downtown’s place as a Purpose Percentage (%) Mode Percentage (%) regional multi-modal hub. These include: Home-Based Other 9.7% Auto - 2 Occupants 7.5% Separated Bike Lanes Downtown Home-Based Personal Business 5.6% Auto - 3 Occupants 6.4% Starting summer of 2014, 300 South and 200 Home-Based Shopping 7.7% Auto - Single Occupant 25.9% West will undergo substantial infrastructure Home-based Work 6.6% Bike 5.5% changes to improve walkability and bicycle Non-Home-Based Non-Work 29.0% Other 0.8% access. Curbside parking will be shifted toward Non-Home-Based Work 41.4% Transit 6.0% the center of the streets and physical barriers will separate auto traffi c and parking from a Walk 48.1% curbside, separated bike lane. Source: 2012 Household Travel Survey, Salt Lake City Transportation Department.

UTA TRAX University to Downtown UTA is working to reintroduce the direct Table 18: Downtown Transportation Survey - Transportation Into Downtown University of Utah to downtown TRAX line, Purpose Percentage (%) Mode Percentage (%) which will provide transportation to all major downtown stops for university students and Home-Based Other 18.5% Auto - 2 Occupants 16.3% faculty as well as neighborhoods east of Home-Based Personal Business 3.8% Auto - 3 Occupants 11.4% downtown. Home-Based School 1.8% Auto - Single Occupant 52.7% Home-Based Shopping 5.0% Bike 3.3% Downtown Salt Lake City Streetcar Home-Based Work 37.9% Other 0.6% Streetcars enhance and accelerate walkable, transit-oriented redevelopment in urban Non-Home-Based Non-Work 15.5% Transit 11.4% centers. In 2013, Envision Utah, Salt Lake City Non-Home-Based Work 17.5% Walk 4.3% and Utah Transit Authority began a federally mandated alternatives analysis to catalogue Source: 2012 Household Travel Survey, Salt Lake City Transportation Department. potential routes along 200 South and 300 South, stretching from downtown to the Table 19: Downtown Transportation Survey - Transportation Out of Downtown University of Utah. This project will continue to gain momentum in 2014 as the city determines Purpose Percentage (%) Mode Percentage (%) additional funding mechanisms. Home-Based Other 18.8% Auto - 2 Occupants 16.8% Home-Based Personal Business 4.0% Auto - 3 Occupants 12.4% Home-Based School 1.5% Auto - Single Occupant 51.6% Home-Based Shopping 6.5% Bike 2.5% Home-Based Work 30.7% Other 0.8% Non-Home-Based Non-Work 16.9% Transit 10.8% Non-Home-Based Work 21.7% Walk 5.0%

Source: 2012 Household Travel Survey, Salt Lake City Transportation Department.

TRANSPORTATION 35 QUALITY OF LIFE Cities off er unmatched possibility. They are centers for science and technology, for culture and innovation, for individuality and collective creativity, and for proximity and effi ciency. Anchored by an educated millennial generation, cities across the United States are growing Salt Lake City is a at unprecedented rates. In more than two-thirds of the nation’s 51 largest cities, the young, college-educated population grew twice as fast within three miles of urban centers as in the burgeoning metropolis rest of the metropolitan area in the past decade. and the regional center With a median age of less than 30, Utah has the youngest median age of any state in the for culture, commerce country. It is also one of the most educated. 90% of Utah citizens have at least a high school education and more than 55% have attended some college, with more than 28% having earned and entertainment. a Bachelor’s degree. This is good news for employers. With an abundance of highly educated, young individuals who are motivated to work and eager to succeed, and a state that is pro- business development, business sectors are diverse and rapidly growing. Utah is a national leader in aerospace and defense, energy, fi nancial services, life sciences, outdoor product and recreation, software development and information technology industries.

The capital city, Salt Lake City, is a burgeoning metropolis and the regional center for culture, commerce and entertainment. Whether it is business, innovative policy, arts, culture or nightlife, the “what’s there” question off ers limitless answers. The proximity of natural beauty and recreation, complemented by a dynamically built work and social environment, make Downtown Salt Lake City the ideal place for young professionals to work and play.

Salt Lake City Notable Accolades

BEST 5TH 6TH 6TH [ [ [ LEAST STRESSED [ CITIES WITH THE AMERICA’S 25 BEST 10 BEST CITIES FOR CITY HAPPIEST EMPLOYEES PERFORMING CITIES PUBLIC TRANSPORTATION

[ (CNN MONEY, 2014) [ (GLASSDOOR, 2014) [ (FORBES, 2012) [ (US NEWS, 2012)

7TH 7TH 8TH 12TH [ [ [ 19 BEST CITIES FOR [TOP 10 CITIES STEALING 12 CITIES LEADING THE BEST PLACES FOR MILLENIALS JOBS FROM WALL ST. WAY IN SUSTAINABILITY BUSINESS AND CAREERS [ (BUSINESS INSIDER, 2014) [ (FORBES, 2014) [ (MOYERS AND COMPANY, 2013) [ (FORBES, 2013)

QUALITY OF LIFE 37

Research, Writing and Compilation

• Jesse Dean, Director of Urban Development Downtown Alliance • Darin Mellott, Senior Research Analyst CBRE • Kami Taylor, Research, Marketing and Enterprise Manager CBRE • James Wood, Director, Bureau of Economic and Business Research University of Utah

Design

• Chris Bennett, Senior Graphic Designer CBRE • Derrick Cox, Graphic Designer (Maps) Salt Lake Chamber

Photography

Austen Diamond, David Newkirk, Brent Rowland, Margie Richlen, Jason Mathis, Jesse Dean, Doug Barnes, SLC Photo Collective

Credits

• Boyer Company • Larry Miller Sports Properties • Bureau of Economic and • Moyers and Company Business Research at the • Salt Lake Arts Council University of Utah • Salt Lake City CED • Business Insider • Salt Lake City Transportation • Downtown Alliance • Salt Lake County Center For • CBRE The Arts • Clark Planetarium • Select Health • Clearwater Homes • Smith Travel Research • The Complex • Strategic Advisory Group • Cowboy Partners • US News • CNN Money • United Concerts • Discovery Gateway • Utah Department of • Forbes Magazine Workforce Services • GOED • Utah Offi ce of Tourism • Glassdoor • Utah State Tax Commission • GREENbike SLC • Utah Transit Authority • Hamilton Partners • Visit Salt Lake • HKS Architects • Wasatch Partners • La Porte Group

©Copyright 2014, CBRE and the Downtown Alliance. The property set for this report is unique and not equal to quarterly updates provided by CBRE. Data refl ects properties located within the submarkets known as the Central Business District (CBD) and CBD/Periphery. Downtown Alliance boundaries are: 700 West to 300 East and North Temple to 400 South. This report also contains information from third party sources we presume to be reliable.