Development planned for Gale Street

Published: Wednesday, June 11 2008 12:06 a.m. MDT

A development is planned for Gale Street that will feature recreational space such as an ice-skating rink, golf-driving range or bowling alley, as well as movie theaters, indoor and outdoor retail space and condos.

Gale Street Properties LLC acquired the 7.9 acres at 529 S. Gale St. (340 West) from the Salt Lake Tribune on Dec. 31, according to documents from the Salt Lake County Recorder.

Reagan Outdoor Advertising Inc. is listed as a trustee for Gale Street Properties, but a principal with Gale Street Properties said Reagan will not be affiliated with the development. The principals are the same, but Gale Street Properties is a separate entity, and a separate management team will be hired for the development.

The development will be modeled after the Westgate City Center in Glendale, Ariz., which has residential, retail, offices, hotels and an arena that is home to the Phoenix Coyotes, a National Hockey League team.

On Gale Street, the possible ice rink probably won't come with a professional hockey team, said the principal. The retail component will have indoor walkways to accommodate shoppers when it's cold.

"We're just getting started on it," the principal said. "It's still in the very early phases, the planning phases."

Records with the county recorder did not disclose the price that Gale Street Properties paid the Tribune for the property. Shortly before the Tribune sold the property to Gale Street Properties, it was appraised for $7 million, said Dean Singleton, head of the Media News Group, the newspaper chain that owns the Tribune.

"We got in excess of $7 million for it," Singleton said this week.

The Gale Street property was the site of a printing press and mail room and had been owned, along with offices and printing presses on Regent Street, by both the Tribune and Deseret News until November. The newspapers had opened new advertising offices with modern printing presses in West Valley City and no longer needed the Salt Lake properties.

While the News received some money in the real-estate transaction with the Tribune, it will not be enough to prevent the paper from laying off up to 35 people in coming weeks. Revenue is down 32 percent, and the News' management announced the cuts last week as part of a restructuring plan to financially revive the paper.

The News owned 42 percent of the Gale Street property and 50 percent of the Regent Street property, assessed for about $3 million. The Tribune gave the News the Regent Street property and about $1.6 million to compensate for the higher value of the Gale Street property, News publisher Jim Wall said.

The News also received $300,000 for parking spaces on Regent Street that it sold to the Tribune. The Tribune will sell those parking spaces, along with its former building on Main Street. The Tribune moved from its Main Street building to The Gateway two years ago.

But the News was unable to sell equipment inside the buildings, also worth about $1.9 million.

"There was no market for them," Wall said. "We had to write that off."

Furthermore, the News and Tribune had to pay a company to remove the presses from the buildings. The presses were sold for scrap metal, which helped reduce the cost of the removal. The News had to pay 42 percent of that bill, about $400,000.

"Somebody had to do it (remove the presses)," Wall said, adding that the News and Tribune would have had to reduce the selling price of their properties if the presses hadn't been removed.

On Friday, the News sold the Regent Street property to a real-estate arm of The Church of Jesus Christ of Latter-day Saints, for $3 million. The LDS Church owns the News, and Wall said it was the "appropriate" action to sell the property back to the owners, since the newspaper no longer needs it. While the News is a for-profit company and has to pay property taxes, the real-estate arm is nonprofit and does not.

Of the $3 million from the sale, the News will pay $1.2 million in capital gains and other taxes. The remaining $1.8 million will be used on severance packages to the laid off employees, who comprise about 18 percent of the full-time staff.


E-mail: lhancock@desnews.com

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