South Towne was conceived nearly 17 years ago, when the ZCMI department store chain began purchasing land in the south end of Salt Lake Valley hoping to someday capitalize on that area's growing population, company officials said.
In 1984, ZCMI revealed its plans by announcing it had sold the land to Turnmar Development Co. in Denver and Collier Management and Development of Salt Lake City to build and manage a $100 million shopping center, with ZCMI as the first anchor tenant.A year after ground was broken, Utah's economy soured and growth in south Salt Lake County slowed considerably. At the same time, Turnmar was having troubles of its own, forcing the Colorado firm to sell its 76 percent interest in South Towne to Kroh Brothers Development Co. in Kansas City, Mo.
Collier and ZCMI were relieved to have a nationally recognized developer buy out Turnmar and give South Towne an appearance of stability before the project's grand opening in October 1986. The security of Kroh Brothers was short-lived however, as the company filed for bankruptcy five month's later, casting a darker cloud over South Towne.
For almost a year South Towne, embroiled in the Kroh Brothers bankruptcy proceedings, stagnated without any certain ownership or management. Finally, in May of last year, Equity Properties and Development Co. assumed management of the project by court approval.
By the end of the summer, an affilate of Equity, Zell/Merrill Lynch Real Estate Opportunity Partners Limited, bought out South Towne's owners and lenders, including Collier and Crossland Savings.
Zell/Merrill Lynch is a $400 million investment fund established by Equity co-owner Sam Zell and investment firm Merrill Lynch & Co. to acquire "well-located real estate properties that show future potential and opportunities," Equity spokeswoman Jayne Majzan said.
News reports say that Zell/Merrill Lynch paid as little as 70 cents on the dollar for South Towne. However, Majzan declined to disclose what the fund paid for South Towne, while Collier and Crossland claim they were treated fairly in the deal.
South Towne Vital Statistics:
owner: Zell/Merrill Lynch Real Estate Opportunity Partner Limited.
manager: Equity Properties and development Co., based in Chicago and an affiliate of Zell/Merrill Lynch. Equity owns and manages more than 20 million square feet of retail and office property throughout the United States.
previous owners and managers: Tummar Development Co., Colllier Management & Development, Kroh Brothers Development Co. and General Growth Cos.
size and location- Built on 112 acres at 106th South and I-15, the building currently has 400,000 square feet of lease space, one anchor tenant and a 10 screen theatre complex is scheduled for completion this year. The project was proposed in 1984 as a potential $100 million, 1.5 million-square-foot mixed-use center with surrounding commercial development.