When the Provo Towne Center opens for business in about 18 months, one of its anchor stores will be a store now anchoring the University Mall in Orem.
No official announcement has been made, but word is out that JC Penney will leave the University Mall in favor of a new store at the south Provo mall. JC Penney hasn't announced the move, but officials from JP Realty, the development firm building Provo Towne Center, said a deal has been reached where JC Penney will build a 152,000-square-foot store in the Provo mall."Everyone knows they are coming," Provo Economic Development Director Leland Gamette said. "They're actively involved in getting the plans ready for the new mall."
Provo Mayor George Stewart said JC Penney is a major catch and will solidify the mall's viability.
"It's huge because it means we have three committed tenants," Stewart said.
Dillard's will be the main anchor with a 210,000 square-foot store. Sears will vacate its downtown location and build a 124,000-square-foot store at the new mall. Ground-breaking on all the anchor stores should take place sometime this summer.
JP Realty has awarded contracts to clear the land, remove debris and prepare the site between south University Avenue and I-15 for construction. Work on infrastructure, parking lots and roads is scheduled to begin in June.
"The focus is to have it up and open by October 1998," Gammette said.
City officials believe close freeway access and the visible location will make the mall the county's hottest retail spot. They estimate the mall will generate about $1 million each year in new sales tax revenue.
"They are not going to invest as much money as they are unless they're comfortable that they'll get a good return on the investment," Gamette said.
For the next 20 years, however, much of the new property tax will go back to JP Realty in incentives to repay the development firm about $7.5 million in land costs. Land acquisition at the mall site was expensive because a hotel was demolished and tenants of a large trailer park had to be relocated.
"In essence, (the incentive package) brings the cost of the land down to what it would have been had the site been vacant," Provo Redevelopment Director Ron Madsen said.
University Mall officials say losing JC Penney will hurt for a time. However, tenants coming and going is part of a mall's cycle. Eventually, another large department store will likely fill JC Penney's building, and the other stores will have to compete harder for shoppers' dollars.
"We just have to do a more aggressive job of doing what we've been doing for the past 20 years and we'll be fine," mall manager Rob Kallas said. "Everyone will have to do a better job of retailing to compete for those spending dollars."
Still, University Mall officials are not standing idly by waiting for the Provo mall to open. A major renovation plan is in the works. Kallas said the interior will be redesigned and the mall will be expanded to the south and east. Planned for north of the mall are an office building, entertainment building and parking terrace.
The expansion will include areas where large department store anchors can easily be added. Kallas said the mall eventually hopes to have five anchors, instead of the current three.
"We have decided to go ahead and renovate without securing the expansion of a department store," he said.
Kallas said Utah Valley is experiencing a major retail explosion right now and the department store market might be saturated. The new Provo mall will likely affect the valley's entire retail picture. He believes the strong will survive and the weak won't.
However, Kallas believes University Mall is still in a better location than the Provo mall because it is located along the valley's largest commercial corridor. The 1200 South and University Parkway corridor is the main connection to Brigham Young University campus, and many large retailers have chosen to build new stores along the route.