Park City condos going up for auction

More developers want to auction off new units
Success of Silver Strike Lodge prompted two more in March

by Andrew Kirk, OF THE PARK RECORD STAFF
Posted: 02/19/2010 05:02:22 PM MST

On Dec. 26, The Park Record reported that developers of the Silver Strike Lodge at Empire Pass would auction off eight brand-new units. The developers thought this may have been a first for Park City. In essence, it was a kind of experiment, and response to the article indicated some wished them well, others thought it was a charade.

As a result of the auction on Jan. 17, all but one of the units in the lodge have now been sold, and two other Park City developers have signed up with the same auction company Accelerated Marketing Partners.

Developer Matt Mullin said in December he wanted to put Silver Strike Lodge units on the auction block because willing buyers are out there, they just aren't buying because they're worried about overpaying.

An auction allows the buyers to come forward and together establish the true market value of a unit without any suspicion of someone getting a better deal. It also allows for a quick disposal once the agreed-upon value is established.

Mark Waltrip, chief operating officer for Westgate Resorts will offer 44 condominium residences at The Lodge at Westgate Park City Resort & Spa on March 28. Located at The Canyons, these condominiums are much smaller than those at Silver Strike Lodge (they average at about 750 square feet) a but have much better amenity packages, Waltrip said. The Silver Strike Lodge condos sold for about 20 percent of true retail, and Waltrip said he'd be more than happy with the same.

Because the
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units are smaller, at a good location and fully furnished, he expects them to sell quickly. And like Matt Mullin, that's part of the appeal of the process. Westgate manages timeshares and wants to be rid of the unsold whole-ownership condos at the Park City resort, he explained.

"This is a good approach to sell off balance of our inventory," he added. "This is not a company in trouble You're dealing with a 42-year-old company servicing (this resort) to the same level we're servicing all other resorts."

The other developer, Henry Sigg, will auction off seven "homes" in the development Lookout close to the Silver Lake Village on March 27. They're all "condos" he said, but some are attached, some detached ranging from 4,317 to 5,866 square feet.

Sigg, too, said he's perfectly fine letting the units go for less than market price. It's about moving inventory, he said. The market has gone through a correction, and in order for stability to return, inventory levels need to go down.

"You've got to remember, prices in the heyday were too high to begin with," he said.

When auctions dispose of units quickly it spurs demand. The same number of units it takes a whole season to sell can find buyers in a single day. They also attract a variety of bidders, which drives up the winning bid.

There's a need for transparency in real estate, he said.

"People have trepidation. They don't want to overpay People are comfortable when they know what the guy next door paid, they like knowing they got the same deal everyone else is getting," he said.

Could the popularity of the method drive down prices too far? Ken Stevens of Accelerated Marketing Partners said not with this kind of uniqueness in each development.

When similar properties are auctioned en masse, that might happen, but there are no other seven homes like the ones at Lookout and no other vacation condos with the amenities offered by Westgate.

Also, buyers come in and go out of the market every four to six months so it's always changing. But there's a finite amount of product to be sold, he said. These quick sales will speed the day when buyers are all confident the market has hit bottom and price pressures will resume.

"The folks we're selling to are very, very smart," he said. "They're buying now below replacement costs, and sooner or later that's not going to happen anymore, we'll run out of supply first."

Overlooking the Mormon Temple, a New Center

Overlooking the Mormon Temple, a New Center

By LINDA BAKER, New York Times
May 13, 2009

SALT LAKE CITY — While the economic crisis has silenced hundreds of real estate projects around the country, 1,100 construction workers are toiling on a 20-acre development here that is springing up across the street from the Mormon Temple in the center of downtown.

A private development of the Church of Jesus Christ of Latter-day Saints, City Creek Center will be the largest mixed-use project in Salt Lake City. When completed in 2012, it will encompass 900,000 square feet of retailing, including an outdoor pedestrian shopping mall capped by 115 apartments; 1.6 million square feet of office space in eight buildings; a grocery store; and five residential towers with about 600 condominiums.

The development, which is within sight of the Mormon Tabernacle, will also feature six acres of public spaces and a retractable glass roof over the retail component. A man-made creek will run through the property.

The Mormon Church, which has its headquarters in the city, is investing “hundreds of millions of dollars” in the project, said Mark Gibbons, president of City Creek Reserve Inc., a real estate arm of the church, while declining to be more specific. The project will reshape downtown, Mr. Gibbons said. “We believe there won’t be anything anywhere that compares with it,” he said.

City Creek is not immune to the recession, Mr. Gibbons conceded. But he said the church has always had a “debt averse” philosophy that is proving especially helpful in the current climate.

“For which of you intending to build a tower does not first count the cost to see if he have money to complete, so he doesn’t look like a fool,” said Mr. Gibbons, paraphrasing Luke 14:28-29. “We set aside reserves to build this project, we counted the cost before we started, and we have the resources to complete.”

Bounded by the Great Salt Lake and the Wasatch and Oquirrh mountain ranges, Salt Lake City is home to 200,000 people, about 40 percent of them Mormons. It is a center for outdoor recreation, with several ski areas within 30 minutes of the city; a financial services hub, and a film festival mecca.

But the Mormon Church also wields considerable clout as the city’s largest employer and landowner. “We don’t have a Microsoft or Coca-Cola,” said Jason Mathis, executive director of the Downtown Alliance. “In many ways, the L.D.S. church fills that role.”

Now the church is a bringing a high-density, mixed-use project to Salt Lake City, with its own imprint: outsized, environmentally friendly and with a history of controversy. Two other companies have taken relatively small stakes in parts of the project.

Located at the intersection of the city’s primary commercial and ecclesiastical corridors, Main and South Temple Streets, the City Creek site, which is owned by the church, previously housed two poorly performing malls.

When Nordstrom, which anchored one of the shopping centers, threatened to leave seven years ago, Mormon leaders decided it was time for a makeover. The mayor at the time, Rocky Anderson, called enclosed malls “a failed paradigm,” and the church eventually agreed to a design that is much more open than the former malls.

To integrate the project with the surrounding neighborhood, City Creek planners put all parking underground and carved new streets into Salt Lake City’s monolithic 10-acre blocks — a legacy of the church’s founder, Joseph Smith, who developed a plan for the “City of Zion” in 1833.

The project features sweeping promenades and urban plazas “in line with the great plazas in Italy,” said Joe Collins, a project architect with Zimmer Gunsul Frasca. Fountains that include fire and bells — designed by the company responsible for water features at the Bellagio hotel in Las Vegas — will grace one of the plazas. “It’s going to be marvelous,” Mr. Gibbons said.

City Creek’s two-story 100-store retail center consists of several structures and will be developed by Taubman Centers, a developer based in Michigan, which is investing $75 million.

Its chief operating officer, William S. Taubman, said he had re-signed Macy’s and Nordstrom as anchor tenants, but declined to comment on the number of additional commitments he had secured. The center, which will open in 2012, will provide more upscale shopping than currently found in Salt Lake City, he said.

Nationwide, about 12 other major shopping centers were scheduled to open in the next year, Mr. Taubman said, but almost all of them have been delayed. City Creek is one of the few that has not been hampered by the economic downturn, he said.

Signs of the church’s financial strength — and managerial approach — abound. City Creek’s retractable glass roof will provide protection for shoppers during inclement weather. It would not be feasible without the deep coffers of the church, Mr. Collins said.

In keeping with religious dictates, the mall will be closed on Sundays, and only a few establishments, located on land whose title is held by Taubman Centers, will be allowed to serve alcohol.

Elements of the project are controversial. Some people scoff at the plan to use potable water to evoke City Creek, which determined the location of the city but which will remain underground.

“It’s the Disneyfication of what for many of us who are not members of the church find to be our sacred places, the natural environment,” said Stephen A. Goldsmith, a former city planning director who first approached the church with the mixed-use proposal for the City Creek property in 2002.

A sky bridge to be built over Main Street, where a light rail train operates, has also drawn criticism on the grounds it would mute street-level activity.

But Mr. Goldsmith, who now teaches at the University of Utah, is in favor of many aspects of the project. “To think we are going to have thousands of people living downtown — it’s something we only dreamed about,” he said

About 30 percent of the condos in City Creek’s Richards Court, a 10-story twin tower opening this year, have sold, Mr. Gibbons said. So far, most of the buyers are church members who will pay more than $900,000 for a one-bedroom unit with a view of the temple. “It’s the equivalent of living across the street from the Vatican or the Wailing Wall,” said Babs De Lay, a local real estate agent. “They will pay anything for this location.”

To accommodate the retail and residential components, City Creek developers demolished two office buildings. The ensuing demand led to the construction of 222 South Main Street, a $125 million tower a block from City Creek that will open in November.

Downtown Salt Lake has always had “good bones,” Mr. Gibbons said. But multiuse development is the future of the city — and the church, he said. “The existence of the temple dictates that our headquarters always be here,” he said. “We have a vested interest in making certain the vitality of this area.”

Copyright 2009 The New York Times Company

Overlooking the Mormon Temple, a New Center

Overlooking the Mormon Temple, a New Center

By LINDA BAKER, NY Times

SALT LAKE CITY — While the economic crisis has silenced hundreds of real estate projects around the country, 1,100 construction workers are toiling on a 20-acre development here that is springing up across the street from the Mormon Temple in the center of downtown.

A private development of the Church of Jesus Christ of Latter-day Saints, City Creek Center will be the largest mixed-use project in Salt Lake City. When completed in 2012, it will encompass 900,000 square feet of retailing, including an outdoor pedestrian shopping mall capped by 115 apartments; 1.6 million square feet of office space in eight buildings; a grocery store; and five residential towers with about 600 condominiums.

The development, which is within sight of the Mormon Tabernacle, will also feature six acres of public spaces and a retractable glass roof over the retail component. A man-made creek will run through the property.

The Mormon Church, which has its headquarters in the city, is investing “hundreds of millions of dollars” in the project, said Mark Gibbons, president of City Creek Reserve Inc., a real estate arm of the church, while declining to be more specific. The project will reshape downtown, Mr. Gibbons said. “We believe there won’t be anything anywhere that compares with it,” he said.

City Creek is not immune to the recession, Mr. Gibbons conceded. But he said the church has always had a “debt averse” philosophy that is proving especially helpful in the current climate.

“For which of you intending to build a tower does not first count the cost to see if he have money to complete, so he doesn’t look like a fool,” said Mr. Gibbons, paraphrasing Luke 14:28-29. “We set aside reserves to build this project, we counted the cost before we started, and we have the resources to complete.”

Bounded by the Great Salt Lake and the Wasatch and Oquirrh mountain ranges, Salt Lake City is home to 200,000 people, about 40 percent of them Mormons. It is a center for outdoor recreation, with several ski areas within 30 minutes of the city; a financial services hub, and a film festival mecca.

But the Mormon Church also wields considerable clout as the city’s largest employer and landowner. “We don’t have a Microsoft or Coca-Cola,” said Jason Mathis, executive director of the Downtown Alliance. “In many ways, the L.D.S. church fills that role.”

Now the church is a bringing a high-density, mixed-use project to Salt Lake City, with its own imprint: outsized, environmentally friendly and with a history of controversy. Two other companies have taken relatively small stakes in parts of the project.

Located at the intersection of the city’s primary commercial and ecclesiastical corridors, Main and South Temple Streets, the City Creek site, which is owned by the church, previously housed two poorly performing malls.

When Nordstrom, which anchored one of the shopping centers, threatened to leave seven years ago, Mormon leaders decided it was time for a makeover. The mayor at the time, Rocky Anderson, called enclosed malls “a failed paradigm,” and the church eventually agreed to a design that is much more open than the former malls.

To integrate the project with the surrounding neighborhood, City Creek planners put all parking underground and carved new streets into Salt Lake City’s monolithic 10-acre blocks — a legacy of the church’s founder, Joseph Smith, who developed a plan for the “City of Zion” in 1833.

The project features sweeping promenades and urban plazas “in line with the great plazas in Italy,” said Joe Collins, a project architect with Zimmer Gunsul Frasca. Fountains that include fire and bells — designed by the company responsible for water features at the Bellagio hotel in Las Vegas — will grace one of the plazas. “It’s going to be marvelous,” Mr. Gibbons said.

City Creek’s two-story 100-store retail center consists of several structures and will be developed by Taubman Centers, a developer based in Michigan, which is investing $75 million.

Its chief operating officer, William S. Taubman, said he had re-signed Macy’s and Nordstrom as anchor tenants, but declined to comment on the number of additional commitments he had secured. The center, which will open in 2012, will provide more upscale shopping than currently found in Salt Lake City, he said.

Nationwide, about 12 other major shopping centers were scheduled to open in the next year, Mr. Taubman said, but almost all of them have been delayed. City Creek is one of the few that has not been hampered by the economic downturn, he said.

Signs of the church’s financial strength — and managerial approach — abound. City Creek’s retractable glass roof will provide protection for shoppers during inclement weather. It would not be feasible without the deep coffers of the church, Mr. Collins said.

In keeping with religious dictates, the mall will be closed on Sundays, and only a few establishments, located on land whose title is held by Taubman Centers, will be allowed to serve alcohol.

Elements of the project are controversial. Some people scoff at the plan to use potable water to evoke City Creek, which determined the location of the city but which will remain underground.

“It’s the Disneyfication of what for many of us who are not members of the church find to be our sacred places, the natural environment,” said Stephen A. Goldsmith, a former city planning director who first approached the church with the mixed-use proposal for the City Creek property in 2002.

A sky bridge to be built over Main Street, where a light rail train operates, has also drawn criticism on the grounds it would mute street-level activity.

But Mr. Goldsmith, who now teaches at the University of Utah, is in favor of many aspects of the project. “To think we are going to have thousands of people living downtown — it’s something we only dreamed about,” he said

About 30 percent of the condos in City Creek’s Richards Court, a 10-story twin tower opening this year, have sold, Mr. Gibbons said. So far, most of the buyers are church members who will pay more than $900,000 for a one-bedroom unit with a view of the temple. “It’s the equivalent of living across the street from the Vatican or the Wailing Wall,” said Babs De Lay, a local real estate agent. “They will pay anything for this location.”

To accommodate the retail and residential components, City Creek developers demolished two office buildings. The ensuing demand led to the construction of 222 South Main Street, a $125 million tower a block from City Creek that will open in November.

Downtown Salt Lake has always had “good bones,” Mr. Gibbons said. But multiuse development is the future of the city — and the church, he said. “The existence of the temple dictates that our headquarters always be here,” he said. “We have a vested interest in making certain the vitality of this area.”

Copyright 2009 The New York Times Company

Credit crunch leaves trendy mixed-use developments on shaky ground

By Rebecca Palmer, Deseret News
Published: Saturday, April 11, 2009 11:00 p.m. MDT

HOLLADAY — On a drizzly day last spring, the mayor of Holladay climbed into an immense yellow tractor to help break ground at the site of the Cottonwood Mall.

Accompanied by bombastic symphonic music and the cheers of construction workers and local dignitaries, Mayor Dennis Webb then overturned a load of rocky soil, signifying renewal of the mall property into a walkable "European village."

Almost a year later, the dead of winter is again sprouting into a verdant spring but the mixed-use project on the eastern foothills hasn't taken root.

The fenced lot is now blocked off to the public. Its 57 acres are devoid even of tractors, footprints or "coming soon" signs.

"It's sad they haven't built it," said Ellie Drees, who was shopping recently in Macy's department store, the only business open on the block. "I was looking forward to it."

Drees, a German immigrant, used to shop Cottonwood Mall from end to end, she said. She now misses the bustling of customers in the almost-empty Macy's and fears the store could go out of business, like the nearby T.G.I. Friday's restaurant.

Similar scenarios have played out across the Wasatch Front, from Layton to Orem. The largest projects all have stalled, with the exception of The Church of Jesus Christ of Latter-day Saints' City Creek Center development in downtown Salt Lake City.

Smaller projects financed prior to last year's credit crunch are moving forward, but few if any mixed-use ventures — those featuring residential, retail and office space — are seeing the light of day.

Many of the largest projects were billed as one-of-a-kind proposals that would put their respective cities on the map by using New Urbanism trends such as "walkability" and structures built to "human scale."

Some, such as Sandy's high-rise Proscenium, did feature unique architectural plans. But taken as a whole, the trend toward mixed-use projects is more like a flavor-of-the-decade than a novel notion.

"Where it is a problem is where this has become formulaic," said Stephen Goldsmith, a professor of urban planning at the University of Utah. "These are so scientifically produced — housing and retail for a target market (of 13- to 30-year-olds) and a splash of Coldwater Creek. That's what removes the vibrancy. Instead of these organic, self-organizing streets, they might as well become Disneyland."

But Goldsmith was quick to add that he isn't against mixed-use development.

"As long as mixed-use development is understood for its real value, there are only things to be gained from that," the former Salt Lake City planner said.

Fellow academic James Wood, director of the University of Utah Bureau of Economic and Business Research, has researched Utah development extensively.

"Those massive projects, they're all, I think right now, in a holding pattern to see how this (recession) all shakes out," Wood said. "Consumer business is going to be very different once we get through this."

Large projects that have been interrupted statewide include Market Station in South Salt Lake, Station Park in Farmington and Midtown Village in Orem. Other projects, such as a new West Valley City center and redevelopment of Valley Fair Mall, have seen work slowed but not stopped completely.

Most of the projects have been promised future property-tax breaks and infrastructure help from the municipalities in which they are located.

For spots such as the former Cottonwood Mall, where profitable buildings once stood, stalled projects are hurting those same municipalities by depriving them of a commercial tax base.

Wood said he believes some of the largest projects could be forever halted.

"People tend to spend when they feel like they have a lot of wealth," he said. "When markets go south, everyone suffers. There is just too much in the macro market."

When cities approve these large developments and agree to tax-increment financing, they don't look at the "market mosaic" in the valley, Wood said. Elected officials instead rely on property developers to gauge the playing field.

Contributing; Aaron Falk. E-MAIL: rpalmer@desnews.com
© 2009 Deseret News Publishing Company | All rights reserved

Hyatt enters Utah market

Hyatt enters Utah market

By Mike Gorrell, The Salt Lake Tribune
Updated:03/06/2009 08:27:56 PM MST


Absent from Utah's hotel scene until now, the Hyatt brand is establishing a presence in three diverse areas of the Salt Lake Valley.

A Hyatt Summerfield Suites opened in November in Sandy, positioned so its 137 suites will appeal to destination visitors skiing in the Cottonwood canyons and business people with south valley clients.

Joining downtown's cluster of hotels this summer will be a 128-room Hyatt Place Hotel at 55 N. 400 West, the overnight lodging component of The Gateway development.

Another Hyatt Place is scheduled to open this fall at 52 N. Tommy Thompson Road (4700 West) in the growing group of hotels near Salt Lake City International Airport.

Why now, after not being Utah for so long?

"For lack of a better description, the stars just aligned right with the right developers," said Jim Chu, Hyatt senior vice president of franchise and owner relations. He and other Hyatt-affiliated hoteliers met this week at the Sandy Hyatt Summerfield.

"There's no particular reason the brand wasn't in Salt Lake before," he said. "It's not that we didn't want to be. We just didn't have the right opportunity for the right project at the right time."

But now, hard as the economic times might be, turns out to be that right time.

Kevin Ludlow, the Hyatt franchisee whose company owns the 30-employee Sandy hotel, is not surprised.

"Small business can still succeed in a down economy," said Ludlow, owner of Sequoia Development, which pays Hyatt a royalty to use its name. "It's still the engine that makes things work. The hospitality business has taken a hit, but we've got to believe small business is important and can make it in tough times."

Chu said Hyatt believes it has solid partners in the Salt Lake Valley projects.

Sequoia Development has worked on commercial real estate, resort condominiums at Deer Valley and gated community projects for two decades. The Gateway Hyatt is being built by The Boyer Co. and the Gardner Co., while the airport Hyatt Place is part of the Commonwealth Hotels chain.

Commonwealth is part of Corporex Cos., LLC, a Kentucky real estate company with $1.1 billion in assets. Those include 23 hotels in 11 states and another 10 hotels in development, including a Springhill Suites by Marriott in South Jordan.

Chu said these partners "know the Salt Lake City market and the success it's had in years past … It has had consistent performance. It hasn't gone through the big explosion of growth in new hotels over the last five to seven years, so market demand has stayed ahead of the supply curve."

In addition, Utah's overall economy is more upbeat than most states. "Even in today's environment, it's a bit more stable than most other markets. There's been a bit of insulation from the general severity of the economy," he said.

One advantage of bearing the Hyatt name is inclusion in a reservations and promotional system for 370 hotels worldwide, Chu said. Four new hotels were added last month.

mikeg@sltrib.com