Salt Lake City will suffer an "incalculable loss" if Nordstrom isn't allowed to move from Main Street's Crossroad Plaza to The Gateway mixed-use development, according to three independent consultants hired by the City Council.
The three consultants spoke at the City Council's two "fact finding" hearings Thursday at City Hall, where various experts and interested parties weighed in on how a potential Nordstrom move will affect downtown's future.
The council is expected to make a decision Oct. 14 on whether it will lift a prohibition on stores larger than 45,000 square feet from opening at The Gateway and allow department stores such as Nordstrom there.
Council vice chairwoman Jill Love said the council went to great lengths to find objective consultants who weren't previously familiar with The Gateway-Nordstrom issue.
Still, Love said, those objective consultants — Maureen McAvey and Michael Beyard, senior fellows at the Urban Land Institute, based in Washington, D.C., and David Wilcox, senior vice president of Economics Research Associates in Los Angeles — were paid $10,000 each and gave the council the same advice they have heard from other objective retail consultants: Let Nordstrom go to The Gateway.
"It's in the city's best interest to allow some anchors at The Gateway," McAvey said. "Ultimately you're going to have to take off that 45,000-square-foot trap."
Citing declining sales at its Crossroads location, Nordstrom has said it will abandon Salt Lake City altogether if it is not allowed to move to The Gateway when its lease expires in 2005.
"It's a loss to the entire Salt Lake City if they pick up their trunks and move elsewhere," McAvey said. "Let Nordstrom make a business decision about whether they should go . . . to The Gateway."
Consultants hired by Property Reserve Inc., the real-estate arm of The Church of Jesus Christ of Latter-day Saints, which owns both Crossroads Plaza and the neighboring ZCMI Center, argued against allowing Nordstrom to move. Along with the May Co., which owns Meier & Frank at ZCMI Center, Property Reserve Inc. consultants have argued that allowing Nordstrom at The Gateway will divide downtown's shopping hubs and make for an even worse retail climate on Main Street.
But Wilcox and Beyard discounted those arguments, saying that downtown is already divided between the Main Street malls and The Gateway and even Trolley Square.
"You're already bifurcated," Wilcox said, pounding his fist on the table.
Beyard said it is foolish for Property Reserve Inc. and the May Co. to oppose Nordstrom's potential move. Having Nordstrom at The Gateway would be much better than having Nordstrom leave Salt Lake City, Beyard said.
Instead of thinking about The Gateway vs. Main Street, city dwellers should start thinking about downtown, including Trolley Square, 400 South, 300 South and 200 South, The Gateway and Main Street vs. the suburbs.
"The loss of Nordstrom downtown would be an incalculable loss for Salt Lake City," Beyard said. If Nordstrom wasn't allowed to move and left town, it would send "a very distressing message" to the rest of the retail community that Salt Lake City is a place that doesn't "want to do business," Beyard said.
From an economic perspective Wilcox agreed.
"We should not lose Nordstrom," Wilcox said.
"I believe that Gateway does require some addition of well-selected tenants and larger floor space occupiers, and I think that's pretty darn clear," he added.
Property Reserve Inc. is also undergoing a massive planning effort to renovate and connect both its downtown malls. According to Property Reserve Inc.'s consultants, the redesigned malls will be mixed-use development with housing and less retail, although they will have a strong retail component.
Not to be outdone by Property Reserve Inc., Gateway owner The Boyer Co. produced its own consultant who agreed with the council's independent consultants that not allowing Nordstrom to leave will be detrimental to downtown.
The council will hold a public hearing on the Nordstrom move Oct. 9. Officially, The Boyer Co. has asked the city to allow for department stores like Target at The Gateway. However, a decision to allow any department stores would also make way for Nordstrom, if the city also removes its 45,000-square-foot rule on The Gateway. Most department stores like Nordstrom and Target are between 120,000 and 150,000 square feet.
When the city helped Boyer to build The Gateway it included financial restrictions — through a Redevelopment Agency deal — if it stole businesses from Main Street. The penalties would reduce the $16 million the RDA was set to pay back, though taxes, to Boyer for infrastructure improvements it made when it built The Gateway mixed-use development.
Also, there has been some debate as to whether city planners ever wanted large stores at The Gateway. Initially, Mayor Deedee Corradini encouraged Boyer to go after a "Saks" department store, but the store declined to come to Salt Lake City. In January of 2000, however, former planning director Bill Wright wrote a memo to Community and Economic Development director Alison Weyher, noting city plans and zoning for The Gateway "clearly support small commercial uses and specialty retail shops that are oriented toward neighborhood services" rather than large department stores.
Boyer Co. chairman Roger Boyer, however, noted Thursday that The Gateway master plan, which governs a 650-acre area on downtown's western borders including Boyer's 30-acre Gateway project, calls for "large-scale uses such as retail" and a "cohesive retail shopping center."
McAvey and Beyard argue that history shouldn't matter in this decision, and instead the City Council should make a decision based on the current situation, not history.
Brenda Case Scheer, dean of the University of Utah's department of architecture, agreed, noting "every decision now made has to be made on the criteria at this moment of time."