Sales drop at Utah mall facing Mormon-built competitor
SALT LAKE CITY (AP) - A Salt Lake City mall touted as an example of urban renewal when it opened more than a decade ago is facing deepening financial problems amid competition from online retailers and a lavish nearby shopping center built by The Church of Jesus Christ of Latter-day Saints.
The Gateway Mall has lost key tenants such as the Apple Store, and its sales have fallen by more than 50 percent since the $1.7 billion City Creek Center opened blocks away, according to Utah Tax Commission numbers reported Friday by the Salt Lake Tribune (http://bit.ly/1ymOYIY). The Gateway's owner says the property is worth less than half of what it was four years ago.
The mall's woes come as brick-and-mortar stores all over the country struggle to keep up with online retailers, but some tenants like the Discovery Gateway Children's Museum remain upbeat about plans to reinvent the property as a regional entertainment center.
"I'm optimistic," CEO Maria Farrington said. The museum drew more than 238,000 visitors last year, and the mall has added new tenants like Mystery Escape Rooms, where people work through timed puzzles and clues in themed rooms.
The Gateway first opened in 2001, shortly before the Olympic Games came to the city, as a mixed-use blend of condominiums and office space as well as stores, restaurants and movie theaters. The Salt Lake Tribune moved to the space from its building on Main Street four years after it opened.
The $375 million project, built using taxpayer money as well as private funding, was designed to revitalize a part of the city along 400 West that was once home to warehouses, railroad lines and heavy industry.
In 2011, the mall reported taxable sales of $210 million a year to the state. The following year marked the opening of the City Creek Center. Built by a for-profit firm owned by the Salt Lake City-based LDS church, the mall spanning two downtown blocks features a set of retractable roofs as well as outdoor fireplaces, metal sculptures and a trout pond.
The clothing stores Anthropologie and Forever 21 were among those who joined Apple in leaving the Gateway for City Creek, where sales soared to $250 million a year.
By 2013, Gateway annual sales had dropped to $100 million. Top U.S. rating agency Moody's Investors Service called the property troubled in a report released last month.
The mall's parent company, Illinois-based Retail Properties of America Inc., declined comment Friday. But the Tribune reported senior officials have told analysts they're hoping to sell the property.
The Gateway has nearly 90 stores anchored by a 12-screen movie theater, Dick's Sporting Goods and Barnes & Noble bookstore. It has also brought in new businesses, including an Italian restaurant with live music called DOPO and the national arcade chain GameWorks.
Salt Lake City real estate expert Darin Mellott said malls are facing stiff competition online, but businesses can still lure customers to updated stores.
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Information from: The Salt Lake Tribune, http://www.sltrib.com