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SALT LAKE CITY — When City Creek Center opens for business next March, it will include 760,000 square feet of retail space housing stores like Tiffany and Coach, a 30,000 square foot retractable glass roof for open-air shopping. Those figures may make the project sound impressive, but one little fact stands out. Next year City Creek is scheduled to be the only major shopping mall that opens in the U.S., according to the International Council of Shopping Centers. After a recession, with high unemployment and falling housing prices, there's one reason City Creek even happened — it pays to avoid debt. 
Jeffrey D. Allred, Deseret News -Dale Bills looks over City Creek in Salt Lake City
The estimated $1.5 billion development from The Church of Jesus Christ of Latter-day Saints and its Bloomfield Hills, Michigan-based partner The Taubman Co. moved forward during a time of recession, when progress on most other major U.S. retail developments has either slowed or stopped. "The uniqueness of City Creek is not the project itself," said Darrell Tate, a retail specialist for Commerce Real Estate Solutions. "It's the fact that it was able to move forward." Underwriting standards have fundamentally changed since the boom days of 2006 or 2007, Tate said, making it more difficult for developers to secure financing for retail developments. The LDS Church, however, is "debt-averse," said Dale Bills, spokesman for the for-profit church subsidiary City Creek Reserve Inc. No loans were taken out, nor was any public money sought. Those specifics helped bring in an established national partner. "Before we started any demolition and eventually construction, reserves were set aside," Bills said. Those funds, he noted, were generated by church-affiliated businesses, not tithing donations from church members. Because of that, "we were able to build through the recession." Taubman operates 26 retail centers in 22 markets nationwide, possessing the managerial expertise and national retail relationships that LDS Church officials say they needed to make the project a success. It's the partnership that made City Creek survive while others did not, Commerce Real Estate's Tate said. "Many of the projects in major metropolitan areas were put on hold because there was just too much risk associated with those dollars," said Darrin Liddell, managing director of the New York-based Integra Realty Resources, a real estate advisory firm. Now, with the economy showing signs of recovery, City Creek Center is poised to attract retail tenants at a time when they're looking for viable expansion opportunities. |
