New York’s famed Rockefeller Center was constructed during the heart of the Depression, with the ceremonial final rivet being put into place on Nov. 1, 1939. The expansive project, on 22 acres in the center of the Big Apple, was completely driven by the fortune of John D. Rockefeller Jr.
In downtown Salt Lake City, City Creek, a 23-acre mixed-use development featuring condominiums, retail and restaurants, has been under construction since the start of the current recession. This expansive project is completely driven by the treasury of The Church of Jesus Christ of Latter-day Saints, better known as the Mormon Church.
In New York, Rockefeller Center to this day remains a major tourist attraction. City Creek, being constructed in the shadow of Temple Square, expects the retail mall, managed by Taubman Centers Inc. of Bloomfield Hills, Mich., to be a major part of the tourist scene around the square. It is already unique, being the only regional shopping center actively in development in the country.
"The LDS church wanted to preserve the corridor around Temple Square," said Dave Anderton, communications director of the Salt Lake Board of Realtors. "There were some indoor shopping centers built in the 1970s that had gone out of favor and (were) losing tenants. The church decided it would be proactive, reinvent the area and bring people back to downtown."
What attracted my attention was not the mall but the massive commitment the project made to residential living. City Creek is one of the few high-rise condo projects actively in development in the U.S.
According to Anderton, 425 residential units are being built at City Creek in the 30-story Promontory tower, the 20-story Regent tower and the smaller Richards Court mid-rises.
I had gone to graduate school in Salt Lake City at the University of Utah, and I’ve always kept an interest in the city; it just never struck me as being an urban living type of place.
Things have changed since I lived there, Celeste Council, a real estate agent for Urban Utah Homes & Estates in the Salt Lake City, told me in a tone that insinuated I’d been negligent in neglecting the city for so long.
Back in the 1980s, a couple of residential towers were erected in the downtown area, but the real movement occurred this past decade with a lot of old warehouses being converted into loft-style condominiums.
"There were about 2,000 to 3,000 condo units in downtown before City Creek," she said. "There is definitely an urban core to Salt Lake City and a lot of professional types are drawn to the downtown area. 2005 and 2006 were huge years for the SLC condo market."
The only condos I was aware of were those at the ski resorts in the Wasatch Mountains to the east of the city. I guess it has been decades since I visited Salt Lake City.
Council concedes Salt Lake City was more known for its sprawl than vertical construction, but as she points out, because of the geographic limitations, with mountains to the east and west, there is only so much land that can be absorbed for suburban developments. Council, who is a supporter of all things urban, said, "They call this project ‘downtown rising,’ and it’s fantastic to see."
Great. So I ask: Have you sold many condo units?
Uh, she stammered, "No."
"Well, what’s up," I asked.
"I have had buyers that have been interested, but they have been turned away by the price," she answered with frankness.
The median price for condos in Salt Lake City is in the $150,000 to $160,000 range, explained Anderton, but City Creek units were originally put on the market for $200,000 to $2.5 million.
Then there is the economy. Salt Lake City weathered the economic downturn better than most cities (its 7.5 percent unemployment rate was more than 2 percent below the national average), but that doesn’t mean the metro wasn’t hit hard.
"We have seen about a 50 percent drop in prices throughout the downtown core," said Council. "And people are skeptical about buying expensive condominiums, especially when big dollars can buy a fairly large home in the suburbs, with foreclosures and declining prices there as well."
Home prices are still falling in the Salt Lake City metro, Anderton confirmed, but everything is relative, at least compared to some cities where home values are off by 50 percent. "If you look at all residential in the whole metro area, we have only fallen 15 percent compared to peak, which was in the summer of 2007," Anderton said.
As of the fourth quarter of 2010, the Promontory units hadn’t come to market. The Regent, which will be completed in summer 2011, is currently being marketed. It offers the most affordable units — in particular, studios priced at $150,000. These have been sold out, mostly to out-of-towners, either ski enthusiasts or to companies doing business in Salt Lake City and in need of temporary housing for employees.
That brings up the question as to who will City Creek be marketed to? As mentioned, a small percentage will go to the out-of-towners, with the majority of units being acquired by locals. There is a third category of buyer, the LDS faithful, who might want to own property overlooking the Mormon Temple. The Richards Court mid-rises, pricier than the Regent tower, would be most appealing to this group.
"The question is: Are there enough out-of-state Mormons willing to pay a premium for a view of Temple Square?" Anderton asked. "Richards Court is the only residential development right across the street from the square, so it is a unique property."
There is no real answer to that question yet. "Only 13 of the 85 Richards Court units have been closed," said Council. "But, a good portion of those faced the temple. One would assume this a valuable location for some people as they are paying a premium for that view."
Steve Bergsman is a freelance writer in Arizona and author of several books. His latest book, "After the Fall: Opportunities and Strategies for Real Estate Investing in the Coming Decade," has been ranked as a top-selling real estate investment book for the Amazon Kindle e-reader.
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