City Creek not just snatching taxable sales from Gateway

Published June 21, 2013 8:29 am

Retail • Millions of dollars in new spending has been created downtown, but The Gateway's taxable sales declined and some stores left.
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City Creek Center is having a positive economic impact on downtown Salt Lake City, but its success is not without a cost.

New data from the Utah State Tax Commission estimates the high-profile shopping center generated $200 million in taxable sales during the nine-month period from its opening in March 2012 to the end of last year.

About $40 million of that total appears to have come at the expense of The Gateway, its rival to the west that saw its taxable sales decline from $190 million during the final three quarters of 2011 to around $150 million in nine-month period after City Creek opened for business.

"Where the rest of City Creek's sales came from exactly is a harder question to answer," said Matthew Lund, an economist with the State Tax Commission. "Obviously a lot of it would have come from other malls — Fashion Place, Trolley Square, Valley Fair — or anywhere else people would have shopped had City Creek not been there."

Still, when downtown business boosters look at City Creek, they don't see a development only sucking up sales from other retailers but a burgeoning center of commerce that has brought new life and new growth opportunities to a once-struggling central business district.

"City Creek has done better than we ever could have hoped," said Jason Mathis, executive director of the Downtown Alliance. "It has brought new life to downtown."

Although he concedes that some of City Creek's sales have been drawn from other businesses in the Salt Lake Valley, Mathis believes a lot of the volume is new spending by such consumers as convention visitors. And some money may even be new spending by Utahns — perhaps from those who previously were taking their dollars to New York or San Francisco but now are staying closer to home because City Creek has brought in retailers that previously didn't have a presence in the state.

Looking at The Gateway's numbers, Mathis said they point to a shopping center that has proved to be extremely resilient.

"People have been concerned about The Gateway for awhile," Mathis said. "But I think those numbers should help reassure people that it remains a worthwhile destination."

Managers of The Gateway, which watched the Apple Store and more than a dozen other tenants pull up stakes and move to City Creek, said in a statement they knew there would be a shift in the retail environment when City Creek opened. "It was a shift we anticipated and planned for. It's all part of being in a thriving and growing city."

They added that The Gateway has since seen the opening of a number of new stores and restaurants, including Blickenstaff's, Call to Surf, Bettie Page, URivals, La Jolla Groves and Malawi's Pizza.