Existing downtown retailers would survive the proposed Grand Salt Lake Mall on Salt Lake's west side, though the under-construction Gateway project would have to change its focus, according to a draft study.
"Our analysis of the current performance of Salt Lake City's downtown malls leads us to believe that the malls will be able to absorb a small loss of visitor sales to the new (mall)," states the study submitted this week by Rick Giardina & Associates.
"In our judgment, the viability of ZCMI Center and Crossroads Plaza would not be threatened by the presence of the Grand Mall. Sales would certainly drop, but would still remain well above the average of regional malls in the Western United States even under the worst case scenario."
Giardina cautioned that the study was not in final form.
The City Council commissioned the study to determine the proposed mall's potential fiscal impact. And they weren't happy about having to do that.
Many council members are upset that Mayor Rocky Anderson's intransigence on the matter has council staff doing work that planners and others on the administration side would normally do — analyzing utility hookups, financial deal structure, possibilities of mitigation and the like.
"The members of the administration are shirking their responsibility and not offering the services the residents are entitled to," said Councilwoman Nancy Saxton.
"It's a travesty. I'm very disappointed that they aren't taking their oaths of office more seriously. There might be bike paths or nature routes that could be incorporated into this, things that school kids could do, but Rocky won't consider it. He's good at negotiating, but he refuses even to talk."
Anderson did not return phone calls Thursday and Friday seeking comment.
The consultant concluded that, while the mall's own developers are overly optimistic in their projections, the mall still would be financially beneficial for the city.
"I think most of us were very surprised," Saxton said. "For me it was a relief. Even in a worst-case scenario, it seems it's a viable option for Salt Lake City."
The sales and property taxes generated by the mall would exceed costs of public services, a proposed infrastructure sales-tax rebate program and lost sales at other major Salt Lake retail centers.
The study presupposes that all impact fees will be paid. The mall's developers, KFR Utah/Forest City Enterprises, however, are seeking partial waiver of those fees which, if granted, would require two years for the city to absorb.
The consultants assumed that 90 percent of the Grand Mall's revenues would be siphoned off from existing Salt Lake-area malls and retail centers, with 10 percent generated from new spending by residents and visitors. In the "base case" scenario, 7 percent of the mall's sales would be taken out of the hide of ZCMI Center, with 12 percent coming from Crossroads Plaza.
While the two downtown malls would still perform better than about 70 percent of malls in the Western United States, ZCMI Center would dip slightly below the median locally. Crossroads Plaza would remain well above average in the local market.
Both malls are thriving right now, according to the study, with Crossroads second only to Fashion Place with regard to market share among the 14 malls in the valley.
A number of people have expressed their concern about saturating the retail market. However, a study completed two months ago concluded there is tremendous potential for more retail downtown, if a unified strategy is adopted.
"There is more than sufficient retail demand," consultant Chris LeTourneur said.
The Giardina study concluded that since the Grand Mall would be oriented to the "shoppertainment" concept with theaters and restaurants, it "may discourage development of entertainment retail centers elsewhere in Salt Lake City," particularly the Gateway, the study states. "Retail sales in the Gateway area may need to focus more on the local resident market and less on visitor sales."
Even with a sales-tax rebate the developers have requested, the city would receive $1.1 million in sales taxes by the mall's fifth year of operation, the study concludes, with another $970,000 generated in property taxes. And should the mall go out of business before the 20 years of infrastructure bond payments are completed, the city will not be at risk for making sure investors don't lose money. Its credit rating, however, could be affected.
George Riemer, a partner in the Grand Mall development company, said he was pleased with the study.
"It pretty much agrees with our findings that it would be very good for Salt Lake City," he said.
If the mall goes to West Valley City or North Salt Lake or another nearby location, as Riemer has suggested, the study concluded the negative impacts would be the same.
E-MAIL: alan@desnews.com