Study says Salt Lake City is poised for rebirth

Torn between two countervailing forces, the downtown economy for the last four years has ebbed and surged and is poised for another rebirth, according to a new study from the University of Utah.

In its "2005 Economic Profile for Salt Lake City's Central Business District," the U.'s Bureau of Economic and Business Research found that the city's downtown was impacted primarily by two factors: the 2002 Olympic Winter Games and the recession. And the future promises the possibility of unprecedented growth, the study found.

The 2005 profile, commissioned by the Downtown Alliance, is an update of the bureau's benchmark 2002 study of economic factors impacting the city's central business district. The 40-block study area is bounded by 300 East, North Temple, 400 South and 500 West.

While the Olympics stimulated retail sales, boosted hotel occupancy and spurred big investments in housing, retail and transportation, the recession had the opposite, "countervailing" effect on downtown Salt Lake City, said BEBR director James A. Wood.

The sector shed 1,200 jobs during the 2001-05 study period, Wood found. Office vacancies peaked at 16.2 percent in 2002. At the same time, retailers began vacating the downtown malls, which are slated for redevelopment by The Church of Jesus Christ of Latter-day Saints.

However, Wood noted that employment in the sector has since returned to 2001 levels, adding 1,500 jobs.

Much of the growth has been in office employment, which increased from 50,125 jobs in 2003 to 51,250 in 2005. The office sector accounts for 84 percent of employment in the city's central business district.

Despite hand-wringing about the Main Street malls, the bureau found that retail sales actually climbed 12 percent, or $81 million, between 2001 and 2004. In 2004, the central business district saw its second-best year, with retail sales reaching $493 million (in inflation-adjusted dollars).

"In the retail market, you've really got two different stories under way," Wood said. "You've got what's going on at The Gateway, which continues to solidify its position in the retail landscape downtown. And you've got what's going on on Main Street.

"It's clear that Gateway has picked up some of that slack on Main Street, as the two malls move toward renovation," Wood said. "It is playing an important role in retaining retail dollars downtown, and even attracting more retailers."

Clothing sales during the study period increased 23.9 percent, or $21 million, the bureau reported. Department store sales, with the renovation of Meier & Frank, increased 42 percent, or $23 million.