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Sugar House And Cottonwood Mall Redevelopments
November 21th, 2008

Salt Lake County's empty holes: Public opinion seems to favor mixed-use projects in Salt Lake City, but current economic conditions are preventing developers from finishing projects, leaving our cities looking like graveyards.

by Jonny Glines

cottonwood mall plans
Sketch plans for the Cottonwood Mall mixed-use redevelopment project.

Across the nation, malls are being demolished and replaced with "mixed-use" communities. The euro-style communities are designed to create dense neighborhoods, providing residents with all their needs within walking distance. The design has turned into a fad and Salt Lake City was one of the first to jump on the band-wagon with the Gateway nearly seven years ago. The success of the Gateway is apparent with recent expansions and nearly all units filled to capacity.

Urban planners have termed the mixed-use model, "The Paris Pattern." Over 2 million residents live in the urban metropolis of Paris. The design is compact and limited. Every district has its own shopping, entertainment, food and what's most appealing: identity and sense of place.

Vacationing in Las Vegas, six months ago, I learned the mixed-use model is in no way new to America. In Vegas there are now two cities. "New Vegas," is used to label the current main strip. I visited Caesar's Palace, the Mirage and the Luxor. This is where all the action is, but "Old Vegas," presents some authentic character and history in the city. "Old Vegas" was once the main strip in the 1950's. The area was pedestrian focused, with large boxy buildings that contained everything a resident or tourist could ever need, without leaving the street. After World War II Americans left the city for the suburbs, but few knew the Vegas strip would preview how some U.S. communities would look 40 years later.

Steve Izenour, a Philadelphia architect and the author of Learning From Las Vegas writes, "What we can learn from Las Vegas is that buildings aren't permanent. Main streets do happen as density increases and more money gets spent. Sprawl happened in Las Vegas first and now it was undone there first."

Suburban Sprawl is currently being "undone" in Salt Lake City by both market conditions and developers' plans. More infill development is going up while structures are being torn down with the plans for mixed-use developments. Developments in places like Harriman and Woodscross remain with houses unsold as (formerly high) gas prices made people more willing to live in dense areas.

The Gateway Mall was one of the first projects in Salt Lake that truly followed the Paris Pattern. The mall features early French Renaissance architecture that provides housing, over 100 retail stores and restaurants, entertainment and work places such as Fidelity Investments and The Salt Lake Tribune.

The plan was a success and now other developers are taking their sledgehammers to old Salt Lake structures. For many, the Sugarhouse area was full of nostalgia. The downtown area featured local shops including a boutique, record store and a corner coffee shop that became a commons area for many residents. All this was lost when the developer Craig Mecham demolished the Granite Block of Sugarhouse for a new mixed-use project. The plans were to create a live-work-play dense pedestrian friendly environment for citizens.

"I actually think it's a great idea because it's going to bring housing to Sugar House," said SLC resident Zach Moses. "There's a lot of housing around Sugar House, but there's not really any in it."

But with America's economy reaching its lowest numbers since the Great Depression, Mecham lost his funding and left a huge hole. Now city officials want Mecham to fill the hole, only to later dig it up again when he achieves the funding. This would result in an extra $80,000 added to the cost of the project.

Mecham has denied requests from the mainstream media, but in a Utah Stories exclusive interview, he said, "it seems futile to me to fill up that hole and then dig it back out. That's just added expenses, it hinders the project and it certainly isn't beneficial to the merchants. It's not even beneficial to the city. The taxes will remain the same."

cottonwood mall plans
The Cottonwood Mall site remains vacant while GGP attempts to secure

The situation echoes in Cottonwood. The Cottonwood Mall was one of the first malls built west of the Mississippi River, until Chicago based company General Growth Properties demolished the mall, intending to build another mixed-use project. On October 2, GGP announced the project will be postponed an extra year due to "market conditions."

"Worldwide, we have a financial credit crunch which has made it very difficult to move projects like this forward," said James Greham, GGP. Senior Director of Public Affairs. "As liquidity returns to the market, I think we will be able to take a fresh look at the Salt Lake City regional market and begin to reassess our plans." Both projects are experiencing lendig shortages causing their respective developers to postpone construction. But on January 15, the Granite School District voted to provide funding to GGP for the Cottonwood project under the ( Tax Increment Funding) TIF financing provision.

There is an essential question regarding the funding differences in the two projects. Why does the city require a local developer to spend $80,000 to fill in a hole and then dig it up again for his mixed-use project; while an out-of-state company receives Utah tax dollars for the same type of project?

The answer is one developer wanted to largely self-finance the project, while the other wanted government help. The Cottonwood Mall was determined a "blighted area," so the state qualified the project as an RDA project (Redevelopment Agency). This designation made the project eligible for TIF funding from the Granite School District.

Basically, GGP said they couldn't complete the project without the funding and the city determined they needed the project to increase Holladay's retail economic shortage, due to the loss of Cottonwood Mall tennants.

"We don't pay anything unless the project is successful," said David Garrett, Granite School District Business Administrator and Treasurer, in a phone interview. Under an RDA designation, Garrett says the school board will "not pay any money until there is additional new tax money collected, and then a portion of [tax revenue] will go back into paying the debt on the project."

In other words the city is off the hook with GGP if the project is a failure- Sounds fair. This begs the question: Why didn't Mecham try to obtain government assistance like GGP?

"Not all construction projects are RDA projects," said Garrett. "I don't know what the conditions are in Sugar House. My guess is that it was a smaller project and he was trying to do that on his own. The Cottonwood project is larger. [GGP] probably felt they couldn't finance it themselves entirely, so they turned to the RDA assistance."

Hopefully, the assistance can prevent the former Cottonwood Mall area from turning into the urban sand dune that Sugarhouse has become. One thing to keep in mind is that GGP has only postponed the project for a year, while the Sugar House project still holds an imaginary question mark, hovering over the rubble.

Jennifer Dunn, Owner the Pizza Restaurant, Gepettos, is excited for the completion of the project. "I love the idea of the housing. I think it'll be great and hopefully it would bring in more residents that will find us," Dunn said.

But like most residents, Dunn worries that Sugarhouse's history could repeat itself in Cottonwood.

Unfortunately, there are no crystal balls to indicate future market conditions. But one thing all mixed-use projects have in common, is that residents want these plans completed and their cities back to looking like --well, cities.

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