Downtown Alliance - Salt Lake City, Utah

Do Gateway closures signal shift to City Creek?

By Lesley Mitchell

The Gateway shopping center in downtown Salt Lake City has lost several tenants in recent weeks, including children’s clothier Gymboree and apparel retailers Lane Bryant, American Eagle and Express.

Are they headed to City Creek Center, the upscale shopping project set to debut March 22 a little over a half mile away?

Employees packing up at Express at The Gateway on Wednesday said their store is indeed moving over to the new mall, which is anchored by Macy’s and Nordstrom. The other retailers won’t say, and neither will Inland Real Estate Group of Companies, which operates The Gateway shopping center.

But commercial real estate brokers in Salt Lake City say they wouldn’t be surprised to see City Creek lure away some Gateway tenants. The Gateway faces real competition with City Creek’s location and its heavy-hitting operator Taubman, market observers note.

“They (Taubman) are one of the best in the country for what they do,” said Geoff Kaessner of commercial brokerage GSK Realty Services in Salt Lake City. “Nobody wants to go against the financial clout that City Creek has — the power of Taubman and the financial strength of the LDS Church.”

City Creek Center, spanning between Salt Lake’s State Street and West Temple and 100 South and South Temple, will be an upscale shopping center nestled amid the larger City Creek project owned and managed by the development arm of The Church of Jesus Christ of Latter-day Saints. In September, Taubman released a list of more than two dozen tenants planning to open in the mall, which will have about 80 stores and restaurants, led by retailers Macy’s and Nordstrom.

Bloomfield Hills, Mich.-based Taubman said Wednesday it would have no comment about any new tenants right now.

“We aren’t ready to release the names of the rest of the retailers that are coming to City Creek Center, but we will be very soon,” general manager Linda Wardell said.

Most of the tenants already announced by Taubman — a who’s who of upscale retailers including Tiffany & Co., Coach and Michael Kors — are either new to Utah or, as in the case of Disney Store, new to the Salt Lake area.

While many retailers and restaurants could justify a location in both City Creek Center and Fashion Place Mall in Murray because the two properties are miles away from each other —Cheesecake Factory, for example, will be in both shopping centers — The Gateway, further west on 400 West, is simply too close to City Creek for many tenants to want to be in both.

“There’s not enough demand to have two upscale malls in downtown Salt Lake City,” Kaessner said.

That leaves a question whether tenants such as Ann Taylor, which recently announced plans to open a store in City Creek Center, will keep its Gateway location. Ann Taylor has stores in both Gateway and Fashion Place.

Other shopping centers are competing with The Gateway as well.

Sky Grant, owner of the high-end men’s shop D. Grant, closed his store in The Gateway shopping mall late last year after a proposed rent increase. Rather than pay higher rent or go elsewhere downtown, Grant now sells his pricey men’s suits and other apparel and accessories out of a shop on the north end of the Foothill Village shopping center.

Apparel retailer Arden B., which is closing its Gateway store this weekend, doesn’t have any immediate plans for another Salt Lake-area store, its employees said Wednesday.