A new megamall is ready to open Thursday in Salt Lake City. The City Creek Center, a 700,000 square foot mall is a joint venture between Taubman Centers, Inc. and the Church of Jesus Christ of Latter-Day Saints, known also as the Mormon church, and sports such high-end attractions as a man-made creek that runs through the center, a retractable roof, and a fountain spouting choreographed jets of water and fire.
While news of such a new mall wouldn’t have raised eyebrows ten years ago, in this economy the risk of opening such a project is something that many developers are unwilling to take. But this project has the full involvement of the Mormon church, which supported the project with the funds to include many high-priced extras and to attract high-profile tenants, including Tiffany & Co, Nordstrom, Inc., and Michael Kors Holdings, Ltd. The mall also has mid-level tenants such as Foot Locker , Gap and others. Taubman expects the new mall to match the company’s average annual sales of $641 a square foot because about 30% of the mall’s retailers will have no other outlets in Utah.
The new mall is located on land owned by the church across the street from the main Mormon temple in downtown Salt Lake City, and will profit from the heavy foot traffic already in the area. According to the Wall Street Journal, the Mormon temple complex already draws an average of 5 million visitors a year from acround the globe. “From Day 1, we wanted this to be a world-class project,” said Mark Gibbons, president of City Creek Reserve Inc., the church’s development arm, in a recent WSJ article. “We wanted to create something that will last for 100 years.”
The mall was built with financing from the church, and has no mortgage or construction loan. Taubman has stated that its investment is limited to a $76 million stake in the retail space, and has agreed to a long-term lease of the space from the church. The participation by the Mormon church appears to be a contributing factor to the construction of a mall this size. From 2004 to 2007, 68 new shopping centers this size were built. In the past 4 years, only 14 were built, according the CoStar Group, Inc., a national real estate research company. While church/developer joint ventures are nothing new, the size of this project, along with the fact that the church is acting in the role of a private equity investor in a non-religious endeavor, is unusual.
According to the Wall Street Journal, Salt Lake City has lower unemployment than the U.S. average, and a growing, young work force to support the new retail space.