Nu Skin plans massive expansion in downtown Provo

Nu Skin plans massive expansion in downtown Provo

Grace Leong - Daily Herald | Posted: Wednesday, February 3, 2010 12:50 am

After years of looking at expansion opportunities in downtown Provo, Nu Skin Enterprises, one of Utah County's largest employers, is moving ahead with a proposed multi-million-dollar expansion of its corporate headquarters that will include consolidating most of its Provo operations in the downtown area.

On Tuesday night, the Provo direct seller of nutritional supplements and personal care products presented its expansion plans to the Provo Municipal Council. The proposal calls for an additional 120,000 square feet to be added to an area that is now occupied by the Kress building and three existing businesses on the southwest corner of 100 W. Center Street.

Nu Skin is also seeking the city's approval to vacate 100 West from Center Street to 100 South to make way for a 5,000-square-foot atrium that will connect its global headquarters on 75 W. Center Street with a proposed new six-story building on 100 W. Center Street. The atrium will serve as a gathering place for Nu Skin's distributors and employees and as a venue for community events.

The council unanimously approved a motion to move forward with discussions about vacating the portion of 100 West and selling it to Nu Skin. The decision to move discussion forward to the March 2 action agenda is not a decision to vacate the street or approve of any project plans, Redevelopment Agency director Paul Glauser stressed in the meeting. It is, however, a message to Nu Skin that the city is interested in working with one of its major partners in the downtown area.

Several council members voiced early approval for the project, though they had questions about how much an effect closing down a street in the downtown area would have. A traffic study showed that area of 100 West has about 2,000 cars on it a day. Center Street in front of Nu Skin, conversely, has between 10,000 and 12,000 cars on it daily.

This also could be big for the city; elected officials have made downtown revitalization a major focus of the recent campaign as well in the last few years. This, combined with the planned convention center and the redesign of the I-15 interchange, could be that plan they've been looking for.

"Momentum is really picking up in our downtown," Mayor John Curtis said.

Lower real estate prices, cheaper construction costs and Nu Skin's sound financial position are among factors that made the company's expansion possible in the midst of the country's worst recession since the Great Depression, company officials told the Daily Herald at an editorial board meeting Tuesday.

"We've needed a new tech center for some time, and construction costs are much more favorable now," said Gary Garrett, vice president of corporate relations and managing director of Nu Skin Force for Good Foundation. "The new tech center and the research center will give us the opportunity to showcase our innovation in terms of our products and direct selling opportunities."

Nu Skin, which is releasing its fourth-quarter earnings Thursday, reported net income of $59.5 million for the third quarter, up 17 percent from a year ago. In the third-quarter earnings report, CEO Truman Hunt cited consistent improvements in its operating margins since it restructured its business in 2006 and strong growth in Japan, its largest market, and several other Asian countries and Latin America.

To make way for the new building, Nu Skin has made offers to buy property from the owners and landlords of B. Ashworth's on 127 W. Center Street, Pioneer Book on 129 W. Center Street, and Art Services on 125 W. Center Street. The offers are contingent on the city's approval of Nu Skin's proposed expansion.

"If we get the city's approval, then the tenants will eventually vacate their buildings and we will take on that space," said Kara Schneck, senior director of corporate communications for Nu Skin. The company is also considering the option of acquiring the now closed Biomedics plasma center on 153 W. Center Street for future expansion.

Pending the city's approval, construction is expected to start this year, and the project is expected to be completed by 2012.

"We've heard rumors of the expansion but our landlord, who was approached by Nu Skin, told us it may be a few months down the road before it happens," said Brent Ashworth, owner of B. Ashworth's. "We need something to keep downtown Provo alive. It will be good for the tax base if Nu Skin expands. I'd hate to lose my bookshop, but I'm sure there are other places we can relocate to."

The new building will be home to the Nu Skin Center for Anti-Aging Research, which will relocate its 50 workers from an existing 30,000-square-foot building on the northwest corner of 100 South and 100 West.

The proposed building will also be home to Nu Skin's network operations center and call center, which will relocate up to 400 workers from their current location in East Bay. Its distribution center, however, will remain in East Bay.

Company officials say they've not decided whether Nu Skin's U.S. operations and human resources division will remain at the Kress building or move to the corporate headquarters.

The proposed vacation of 100 West will help facilitate the creation of a green space on what is now the site of the anti-aging research center. Garrett said the company hopes to bring a sense of place and community to downtown Provo with what it calls a "privately owned public green space" that's similar to that found near the Main Street Plaza and Gallivan Center in downtown Salt Lake City.

"This public-private space can be home to events like the Freedom Festival, First Night, Taste of the Valley. It can function as a city park, and bring more people to the downtown area," Garrett said.

Founded in 1984, Nu Skin has 4,500 workers companywide including 1,200 in Provo. The company also has 750,000 distributors globally.

Kim Anderson of Provo Art and Frame, another longtime downtown business owner, is positive about Nu Skin's proposed expansion.

"I think it's great they're expanding. We really need to invest in downtown Provo and get rid of the old nasty squeaky floor buildings and get something that's sellable and rentable. We need to get people on the sidewalks," Anderson said.

"There are so many old buildings in downtown Provo that a new building will be an improvement. The only negative is the disruption caused by the construction. But in the long term, it'll be great for downtown Provo," he said.

• Daily Herald reporter Heidi Toth contributed to this story.