HOSPITALITY, TOURISM AND CONVENTION 24 2013 YEAR IN REVIEW 04 RETAIL AND RESTAURANTS 28 CURRENT AND FUTURE DEVELOPMENT 08 CULTURE AND ENTERTAINMENT 30 EMPLOYMENT 12 TRANSPORTATION 32 DOWNTOWN OFFICE 16 QUALITY OF LIFE 36 RESIDENTIAL 20 Contents PURPOSE OF THE STATE OF DOWNTOWN The 2014 State of Downtown report for downtown Salt Lake City ofers a comprehensive analysis and factual update of the downtown economy to inform decisions for key stakeholders: property owners, investors, developers, retailers, brokers, policy makers and civic leaders. This study collects historic data to highlight trends and compare downtown to statewide and regional economic indicators. These comparisons are important to gauge opportunities for improvement and growth in the district. The following economic indicators will be treated with detail in the report: current and future development, employment, downtown of ce market conditions, housing, hospitality, tourism, conventions, retail and restaurants, culture and entertainment, transportation and overall quality of life. 2013 YEAR IN REVIEW A vibrant metropolitan center is an important economic engine for the entire region. Downtown Salt Lake City is one of the regions most dynamic and diverse economies. As such, Salt Lake City serves as a hub for culture, commerce and entertainment and is Utahs capital city. Economic activity and tax revenues continue to recover from the Great Recession of 2007-2009 with retail sales continuing to reach new highs. The surge in activity is augmented by solid performance from City Creek Center with its 700,000 sq. ft. of retail space. However, success is not only limited to the new mall; continued retail leasing activity on Main Street and at The Gateway Mall are indicators that downtown is poised to continue growing its share of Salt Lake Countys retail sales. Table 1: Downtown Economic Prole-2013 (Constant 2013 Dollars) Category Amount Employment 69,235 Wages Paid $2,645,796,000 Available Of ce Square Footage 10,572,513 SF Of ce Vacancy Rate 17.1% Retail $800,304,200 Retail Square Footage 2,400,500 Hotel Occupancy 64.7% City-wide Convention Delegates 197,809 Spending by Convention Attendees $183,962,370 Parking Spaces 33,000* Total Downtown Property Value $3,175,981,590 Total Acreage 501.02 Total Properties within Special Assessment Area 870 * Estimate of surface level and parking structures. Source: Bureau of Economic and Business Research, University of Utah, CBRE, Visit Salt Lake, Downtown Alliance. Downtown retail sales reached all-time highs with sales reaching over $800 million in eating, drinking, clothing, department and other categories. 2013 YEAR IN REVIEW 5 2013-2014 DOWNTOWN ECONOMIC HIGHLIGHTS HOTEL Utah Legislature authorizes new convention facility development incentive provisions The legislation provides a post-performance tax incentive to a private developer to build public meeting room space in addition to privately developed hotel rooms. The hotel is expected to signicantly impact downtowns convention business, which will in turn spill out to existing hotels, restaurants and retail. The RFP process will begin summer 2014. A 24/7 lifestyle continues to grow New retail, restaurants and bars continue to bring additional vibrancy and liveliness to downtown. Notable openings are BEER BAR, Brio, Whiskey Street, Bistro 222, Bodega, Good Dog, Red Hot, Spitz, From Scratch, Copper Common, Rocket Fizz and the Urban Arts Gallery. Downtown Salt Lake Citys share of retail sales at an all-time high Downtown retail sales reached all-time highs of more than $800 million for eating, drinking, clothing, department and other retail sales categories. While countywide sales are declining, downtowns retail performance continues to grow with downtown representing 10.8% of total county sales. Bi-weekly Winter Market debuts in Rio Grande Depot Building on the success of the Downtown Farmers Market, the Winter Marketfrom November through Aprilbrought more than 24,000 people into a challenged downtown neighborhood. Each Winter Market supported more than 50 local businesses and family farms while indirectly injecting positive impacts on neighboring business and contributing to a lively atmosphere. The Summer Downtown Farmers Market helps to attract more than 10,000 people weekly and acts as an incubator for as many as 300 small local businesses. 2013 YEAR IN REVIEW 6 2014-2015 DOWNTOWN OPPORTUNITIES Depot district redevelopment The Gateway development created a strong foundation for this burgeoning entrepreneurial and transit-oriented district. With a public market planned, a 10-acre urban park and over 1,000 new residential units expected, this district has the potential to be a thriving neighborhood in downtown. However, the district needs additional resources and approaches to help service providers and their clients address issues of homelessness and vagrancy. Nightlife economy A vibrant nightlife is an important part of a dynamic and diverse downtown that is welcoming to locals and visitors alike. While new restaurants and bars are opening doors downtown, current statewide liquor laws signicantly impact tourism potential and additional development. Consensus driven policies should address issues of the Zion curtain, intent to dine and the number of full-service restaurant licenses for downtown. Residential development Salt Lake City is in the midst of a dramatic transformation with new business, shopping, dining, arts and entertainment rising throughout the district. However, it is residents that bring the life and soul to a true urban center. Downtown needs more residential opportunities for all ages and income levels. Year-round residents help to create a livelier, more dynamic community. Development friendly codes and zoning One of the biggest concerns threatening any new investment in downtown development projects are impact fees and demolition ordinances. Roadway fees for of ce inll development and Parks impact fees for residential dwellings undermine investments in new development. Local policies should incentivize developers in order to remain competitive in attracting business and residents to the downtown area. 2013 YEAR IN REVIEW 7 CURRENT AND FUTURE DEVELOPMENT Continued development is vital to the future success and vibrancy of downtown. New of ce, residential, hotel, and arts and entertainment developments will continue to redene downtowns growing skyline and bring additional employees, residents, visitors and wealth into the district. OFFICE DEVELOPMENT 101 Tower The Boyer Companys 101 Tower is open and currently for lease on the corner of 100 South and 200 East. The building, designed to service Class A of ce tenants, consists of a granite and glass exterior with steel frame construction. The $34 million tower has 144,000 sq. ft. of leasable space and an on-site parking structure. 111 South Main 111 South Main Tower is a new Class A development being developed by City Creek Reserve. Construction of the 24-story of ce building adjacent to City Creek Center is underway, along with the neighboring George and Dolores Eccles Theater. Featuring 440,452 sq. ft. of of ce space, the anticipated LEED-certied gold project will help bolster downtowns economy with added businesses and jobs. Parking, access, functionality and design will be integrated from the foundation through the faade so that the project as a whole will extend the investment in City Creek down Main Street and throughout the rest of downtown. 151 State Street The Boyer Companys 151 State Street project consists of an 18-story of ce building with a full basement and rooftop penthouse. The building footprint is approximately 22,000 sq. ft. and the building height will be 273 feet to the oor level of the mechanical penthouse, with the penthouse extending approximately 22 feet in height. The schedule for opening and a time frame for construction have yet to be released. A parking structure adjacent to the development site is currently under construction.
Broadway Media Center Wasatch Partners is in the process of retrotting the bottom two oors of the 50 West Broadway Of ce Tower to accommodate a full-service restaurant and Wiseguys Comedy Club, which hopes to open for business in September 2014. The sky bridge connecting the Tower to the former Key Bank Building to the west is also being converted to house a Broadway Media Group radio station. RETAIL DEVELOPMENT Three and Three Un.commons Located on 300 East and 300 South, Three and Three Un.commons is a 16,000 sq. ft. renovated restaurant and retail space leasing at $22 per square foot. The former antique renovation will include a market that focuses on fresh, local produce and a restaurant featuring natural foods. CURRENT AND FUTURE DEVELOPMENT 9 RESIDENTIAL DEVELOPMENT Edison Quarter La Porte Group is currently in the construction phase of a mix of 180 new market-rate residential units along with local retail, theater space and food outlets on 237 State Street. Other planned highlights for the project include the restoration of the Cramer House into a restaurant space and a new community piazza. The $39 million project is scheduled to be completed in 2015. Liberty at Gateway Cowboy Partners is the developer of the Liberty at Gateway, a 160-unit, 203 parking stall, market-rate residential apartment project located on two acres of land directly west of The Gateway. The $25.2 million dollar project fronts most of 500 West from South Temple to 100 South and opened spring 2014. Monthly rental rates start at $699 for studios up to $1,302 per month for two-bedroom units. Cowboy Partners also has another apartment project that is slated to begin construction later this spring on the west side of 200 East between 100 and 200 South. Broadway Park Lofts Located at 360 West 300 South, Broadway Park Lofts is an 82-unit downtown loft community adjacent to the Pioneer Park. The project was acquired by Clearwater Homes and is currently 95% complete. Westgate Business Center Clearwater Homes will begin to redevelop the historical Westgate Business Center on the northwest corner of 200 South and 300 West into 38 luxury units starting in September 2014. Units will range in size from 750 to over 2,000 sq. ft. The 73,000 sq. ft. building will feature geothermal heating and cooling, as well as LEED Gold certication. HOTEL DEVELOPMENT Hyatt House Hotel and Courtyard by Marriott Maryland-based Alex Brown Realty Inc., in conjunction with PEG Development and Blue Diamond Capital, is currently building two hotels on the block directly south of the Energy Solutions Arena. The rst, a 159-room Hyatt House Hotel with a 349-space parking garage on the southwest corner of 100 South and 300 West is expected to open in fall 2014. The second hotel will be a 175-room, select-service Courtyard by Marriott. The Marriott is scheduled to open in 2015. AIR Hotel AIR Hotel is a 14-story boutique hotel development by Provo-based KPB Equities. Located on the northwest corner of 400 South and West Temple, the hotel will include restaurants, a high-end nightclub, rooftop pool and club and a 350-person multi-use entertainment space. Formerly known as the AIR Center, the project is expected to break ground in fall 2014. A hotel operator has yet to be announced. CURRENT AND FUTURE DEVELOPMENT 10 ARTS AND CULTURAL VENUE DEVELOPMENT The George S. and Dolores Dor Eccles Theater Demolition and construction for the $117 million George S. and Dolores Dor Eccles Theater (formerly known as the New Performing Arts Center) began in spring 2014. The 2,500-seat, Broadway-style theater is expected to be completed by summer 2016 and will be designed to enhance the cultural and economic vitality of the region by attracting rst-run touring Broadway shows as well as other national and local music, comedy and family entertainment acts. Located at 135 South Main, the theater is also anticipated to continue the revitalization of Main Street and add a dynamic new festival street component on Regent Street, bolstering investments made by City Creek (one block north) and Salt Lake Citys Gallivan Center (one block south). The theater is being developed in tandem with the 111 South Main Street Of ce Tower. Jessie Eccles Quinney Center for Dance and Capitol Theater Renovation Ballet West and the Salt Lake County Center for the Arts have come together in a public-private partnership to renovate the Capitol Theatre and build the Jessie Eccles Quinney Center for Dance, which will be home to local arts groups Ballet West and the Ballet West Academy. The $33.4 million, 5-story addition to Capitol Theatre is currently under construction on the lot just west of the existing facility located at 50 West 200 South. The new facility will provide additional classrooms and rehearsal space, of ces and technical support areas for both the company and the Ballet West Academy. The renovations to the theater itself were completed winter 2013 and revamped the historical theater to expand the lobby and concessions, increase restroom facilities, improve seating and sight lines, and add a new banquet hall. PUBLIC LANDMARK DEVELOPMENT New United States Courthouse for the District of Utah The new United States Courthouse is located behind the existing Frank E. Moss Federal Courthouse on 351 South West Temple. Construction for the 10-story, 368,000 sq. ft. building began on January 19, 2011 and opened spring 2014. The entire project cost was estimated to be $211 million, providing 1,500 to 2,000 construction jobs. Salt Lake City Public Safety Building Located on the boundaries of downtown at 300 East and 500 South, the new 313,662 sq. ft., 4-story public safety building and emergency operation center houses essential emergency services, including police, re and emergency response call centers, as well as community meeting rooms and department of ces. The $125 million project opened summer 2013. Eccles Theater: Economic Benets at a Glance $200-$500 Million Construction Value 2,500 Construction Jobs 115-168 Permanent Jobs $1 Million New Annual Property Tax Value $9.4 Million Per Year Estimated Annual Direct, Indirect and Induced Spending (based on theater alone) CURRENT AND FUTURE DEVELOPMENT 11 EMPLOYMENT A total of 660 jobs were added to the downtown core in 2013. The small growth in comparison to 2012s increase of 3,725 jobs can be attributed to the 2012 opening of City Creek Center. Total employment in downtown is 69,235 with an average annual wage of $42,727. Table 2: Estimated Employment Change by Sector Downtown 1990 2001 2005 2007 2013 1990-2013 2007-2013 Of ce 42,000 51,350 51,250 53,000 55,500 32.1% 4.7% Restaurants 3,350 7,300 7,400 7,200 7,650 128.4% 6.2% Retail 1,550 2,700 2,600 1,800 3,350 116.1% 86.1% Hotels 1,250 1,800 1,800 1,800 1,800 44.0% 0.0% Manufacturing 500 500 450 50 50 -90.0% 0.0% Miscellaneous 500 750 1,100 1,100 1,050 110.0% -4.6% Total 49,150 64,400 64,600 64,950 69,235 40.9% 6.6% Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance. Of ce workers dominate employment in downtown. In fact, 80.2% of total employment is classied as of ce jobs. Restaurant employment ranks second with 11% of all jobs. The restaurant sector has had the highest long-term growth rate, increasing by 128.4% since 1990. Table 3: Distribution of Employment by Sector Downtown 1990-2013 1990 2001 2007 2013 Of ce 85.5% 79.7% 81.6% 80.2% Restaurants 6.8% 11.3% 11.1% 11.0% Retail 3.2% 4.2% 2.8% 4.8% Hotels 2.5% 2.8% 2.8% 2.6% Manufacturing 1.0% 0.8% 0.1% 0.1% Miscellaneous 1.0% 1.2% 1.7% 1.5% Total 100.0% 100.0% 100.0% 100.0% Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance. Of ce, restaurant and retail employment account for 95% of all jobs in downtown and 96% of the wages paid in 2013. EMPLOYMENT 13 Of ce, restaurant and retail employment account for 95% of all jobs in downtown and 96% of the wages paid in 2013. Downtowns 69,235 workers earned $2.9 billion in wages and salaries in 2013, with $2.6 billion paid to of ce workers. In ination adjusted dollars, total wages paid to of ce workers since 2007 increased by 12%. This increase is due to a growing number of of ce jobs as well as an increase in real wages. Restaurant workers were paid $125 million in wages during 2013, this gure understates total restaurant income because it does not include gratuity payments. With the additional retail workers at City Creek Center, total wages for the retail sector are up 92% compared to 2007. Table 4: 2013 Wages by Sector Downtown Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance. HOTELS Average Annual Wage .............. $23,592 Employment ....................................... 1,800 Total Wages ......................... $42,465,600 RETAIL Average Annual Wage ...............$31,884 Employment .......................................3,350 Total Wages ......................... $106,811,400 MANUFACTURING Average Annual Wage ............. $40,524 Employment .............................................50 Total Wages ............................ $2,026,200 MISCELLANEOUS Average Annual Wage ..............$33,550 Employment ....................................... 1,050 Total Wages .......................... $35,227,500 TOTALS $42,727 Average Annual Wage $69,235 Total Employment $2,958,184,500 Total Wages HOTEL RESTAURANTS Average Annual Wage ...............$16,452 Employment ....................................... 7,650 Total Wages .........................$125,857,800 OFFICE Average Annual Wage ...............$47,672 Employment ....................................55,500 Total Wages ................... $2,645,796,000 EMPLOYMENT 14 HOTELS 2007 (Million) ................................... $44.4 2013 (Million) .....................................$42.5 Percent Change ................................-4.3% RETAIL 2007 (Million) ....................................$54.6 2013 (Million) ................................... $106.8 Percent Change ............................... 95.7% MANUFACTURING 2007 (Million) ........................................$2.1 2013 (Million) ....................................... $2.0 Percent Change ................................-4.9% MISCELLANEOUS 2007 (Million) ..................................... $36.1 2013 (Million) ..................................... $35.2 Percent Change ................................-2.4% TOTALS $2,608,400,000 2007 Total Wages Paid $2,958,200,000 2013 Total Wages Paid 13.4% Total Change 2007-2013 The percent change in wages was most signicant in the retail sector. City Creek Center is seen as the strongest impetus for this growth, however, the combined impact of new retail development throughout downtown cannot be ignored. With additional new of ce space coming to the market and healthy restaurant growth, expect employment numbers to continue to grow in 2014-2015. In the long term, downtown will benet from national trends and growing interest in urban growth and metropolitan living. Aggressive marketing and recruitment strategies will help to put downtown ahead of its suburban competitors, particularly in the surrounding counties of Salt Lake, Utah and Davis. Table 5: Percent Change in Wages Paid Downtown (2013 ination adjusted dollars) Source: Utah Department of Workforce Services and Bureau of Economic and Business Research University of Utah, Downtown Alliance. HOTEL RESTAURANTS 2007 (Million) .................................. $108.8 2013 (Million) ................................... $125.9 Percent Change ................................ 15.7% OFFICE 2007 (Million) ..............................$2,362.4 2013 (Million) ...............................$2,645.8 Percent Change ................................ 12.0% EMPLOYMENT 15 DOWNTOWN OFFICE MARKET Salt Lake Citys downtown of ce market experienced modest improvement in 2013. Looking ahead, a vibrant and evolving downtown will present new opportunities for businesses. In particular, a generational shift, availability of space, amenities and access to transportation will inuence growth and activity in the area. The vacancy rate in downtown Salt Lake City decreased by 170 basis points to 17.1% in 2013; demand was most concentrated among Class B properties, which accounted for the majority of this improvement. The average asking lease rate for the downtown market increased by $0.23 to $21.34 per sq. ft.with the largest increases occurring in Class A and B properties. Table 6: Downtown Of ce Market Characteristics (2013) Central Business District Base Square Feet Lease Rate (FSG) Number of Buildings Class A 3,672,881 $27.11 15 Class B 2,656,598 $21.56 36 Class C 1,498,562 $16.96 59 Total Leasable 7,096,041 $22.11 110 *Buildings over 20,000 SF in downtown. Source: CBRE.
Table 7: Historical Downtown Of ce Vacancy A generational shift, availability of space, amenities and access to transportation will inuence growth and activity in the area. 25% 20% 15% 10% 2009 5% 0% 1 4 . 6 % 1 8 . 2 % 1 0 . 7 % 1 1 . 3 % 1 1 . 7 % 1 0 . 9 % 1 7 . 5 % 1 4 . 6 %1 6 . 6 % 2 3 . 2 % 1 9 . 6 % 1 9 . 6 % 1 9 . 0 % 1 8 . 2 %2 0 . 6 % 2 2 . 0 % 2 0 . 6 % 2 0 . 1 % 1 7 . 0 % 1 6 . 8 % 1 5 . 7 % 1 8 . 8 % 1 7 . 1 % 1 6 . 7 % 2010 2011 2012 2013 2014 (YTD) Source: CBRE. Class A - Class B - Class C - All Classes - DOWNTOWN OFFICE MARKET 17 Residential TRAX Light-Rail TRAX Stations GREENbike Bike Share Stations Future Residential Residential TRAX Light-Rail TRAX Stations GREENbike Bike Share Stations Future Residential Residential TRAX Light-Rail TRAX Stations GREENbike Bike Share Stations Future Residential Downtown Of ce Buildings DOWNTOWN OFFICE MARKET 18 Utahs business friendly environment, ability to accommodate growth, and low costs will continue to attract businesses and support growth for existing rms. As evidenced by the latest average asking rates for downtown of ce markets in the region, Salt Lake remains competitive from a cost perspective. In the coming years, downtown Salt Lake City will benet from a generational shift. According to Nielsen research, Salt Lake Citys concentration of Millennials (those born between 1977 and 1995) is second in the nation. This generation, also commonly referred to as Gen Y, is becoming more important to employers as they make up a larger share of the workforce. The same research shows that almost two-thirds of this group prefers to live in mixed-use communities in close proximity to amenitiesthe type of environment a downtown ofers. In fact, 40% of this group indicates they would like to live in an urban environment in the future. Quantitative regional research from the Downtown Alliance indicates that 41% of Utahns between the ages of 18 and 24 want to live downtown. Utahs concentration of Millennials bodes well for the future of downtown Salt Lake City. Locally, some employers, particularly in the tech sector, are utilizing the downtown environment as way of broadening their appeal and attracting the best and brightest to their rms. As growth occurs, availability of of ce space remains healthy. Recently completed projects have created ample vacancies for new, large tenant leasing in the near term. This, in addition to new and planned construction, is ensuring the availability of space for larger of ce users. Downtowns appeal to younger workers, superior transportation infrastructure and ability to accommodate growth with available real estate give reason for continued optimism for the areas future. $ 2 9 . 4 4 $ 2 1 . 5 8 $ 1 4 . 7 5 $ 2 1 . 5 6 $ 1 9 . 5 4 $ 2 7 . 8 6
R a t e s $22.50 $30.00 $20.00 $25.00 $15.00 $10.00 Class A Class B Class C Downtown Avg. County Avg. $27.50 $17.50 $12.50 - 2010 - 2011 - 2012 - 2013 - 2014 (YTD) Source: CBRE. Source: CBRE. $35.00 $ 3 1 . 0 7 $ 3 0 . 1 7 $ 2 3 . 8 6 $ 2 1 . 2 8 $ 2 1 . 0 6 Denver Portland Salt Lake City Phoenix $15.00 $30.00 $10.00 $20.00 $0.00 $25.00 $5.00 Seattle DOWNTOWN OFFICE MARKET 19 Table 8: Historical Of ce Lease Rates for Downtown and Salt Lake County Table 9: Regional Downtown Lease Rates RESIDENTIAL The number of downtown residential properties has increased signicantly over the past decade, with open lofts, luxury condos and afordable single-family housing units coming online in several sections of the district. This is part of a nationwide trend, with most urban metro areas growing at a faster rate than their surrounding suburbs. Driving the urban living resurgence are young adults (18-29 year olds) interested in living, working and playing in dense metropolitan areas. New residential housing growth remains consistent in downtown Salt Lake City with a total of 460 units having opened or broken ground in 2013. There has also been a substantial amount of residential investments just outside of downtown. However, a signicant increase in impact fees threatens to undermine additional needed housing investments. Impact fees are designed to compensate a community for the cost of extending infrastructure as required to support new development. Impact fees are assessed to new developments as a condition of development approval and are calculated to cover a proportionate share of the capital costs needed to serve the proposed development. In 2012, Parks impact fees for multi-family dwellings increased from $681 per unit to $3,999 in Salt Lake City, a 391% increase. After pushback from the local development community, the Salt Lake City Council voted to set the Parks fee at $2,875 per unit for two years with the fee returning to $3,999 at the end of the two year period if a new plan has not been adopted by spring 2014. Table 10: Inventory of Condominium Units in Downtown Since 1990 Name Address Units Year Built Belvedere* 29 South State 131 1978 American Towers 46 West 300 South 370 1983 Eagle Gate 115 East South Temple 66 1983 Warehouse Condominiums** 317 West 200 South 25 1997 Dakota Lofts** 380 West 200 South 39 1997 The Club 150 South 300 East 47 1999 Broadway Lofts** 159 West Broadway 58 1999 Pierpont Lofts** 346 West Pierpont 42 1999 Tire Town** 300 South 300 West 3 2000 Karrick Building** 236 South Main 9 2001 The Plaza 300 South State Street 5 2001 Ufens Market Place 336 West 300 South 45 2003 Library Square 226 East 500 South 29 2004 Parc at The Gateway 14 South 400 West 152 2004 Brooklyn Condominiums 700 North 300 West 36 2005 Westgate (Phase I) 200 South 238 West 73 2006 Metro Condos 350 South 200 East 117 2006 Sampson Altadena* 276 East Broadway 18 2006 35 West 300 South* 80 South 300 West 8 2007 Broadway Tower* 300 South 230 East 96 2007 Patrick Lofts 163 West 200 South 40 2008 Promontory 99 Wes South Temple 185 2011 Richards Court 45 East South Temple 90 2011 The Regent 45 East 100 South 149 2011 Liberty at Gateway 500 West South Temple 160 2014 Broadway Park Lofts 300 South 350 West 82 2014 Edison Quarter 237 South State 180 2014 Westgate Business Center 300 West 180 South 38 2015 The Cascade 90 West 100 South 115 TBD * Converted for apartment use Source: Downtown Alliance. New residential growth remains consistent in downtown. Driving the urban living resurgence are young adults interested in living, working, and playing in dense metropolitan areas. RESIDENTIAL 21 Downtown Residential Buildings RESIDENTIAL 22 Plan as Adopted by the Council in 2012 Parks Impact fee $3,999 per unit Roadway fee collected citywide Roadway fee used for road construction and other modes of transportation Fees take efect January 2013 Salt Lake City Administrations Recommendation January 2014 Parks fee decreased to $1,752 $562 increase per year for ve years reaching $3,999 Collect Roadway fees in NW quadrant and west side industrial areas Refund diference in Parks fee collected in 2013 Refund Roadway fees collected outside NW quadrant and west side industrial areas Final Salt Lake City Council Approval 2014 Reopen the Impact Fee Facilities Plan Reassess the Citys priorities for projects Evaluate level of service required for City growth Create service areas based on growth Collect fees for roadway construction growth areas Create separate bike and pedestrian fees Charge Parks fees based on bedrooms or sq. ft. rather than per door Assess fees based on geography Parks fee decreased to $2,875 per residential unit While the reduction in fees to $2,875 per residential unit will help developers in the short term, the return to the original amount of $3,999 by 2015 could signicantly impact future development projects. Low interest rates combined with growing demand have allowed developers to continue to invest in residential apartments. If either dynamic changes signicantly or impact fees increase, the margins will not exist to allow development to continue. City policy should focus on long-term fee structures combined with incentives for sustainable building to foster a more stable residential development environment in the urban center. IMPACT FEES AT A GLANCE 2012 2013 2014 2015 RESIDENTIAL 23 HOSPITALITY, TOURISM AND CONVENTIONS Annual Statewide Visitors 18,617,769 Salt Lake International Airport 7,135,076 National Park Recreation Visits 4,923,727 State Park Recreation Visits Source: Utah Of ce of Tourism. $930 AVERAGE CONVENTION DELEGATE SPENDING PER DAY 930 930 $930 AVERAGE CONVENTION DELEGATE SPENDING PER 25 CITYWIDE CONVENTIONS 25 25 25 CITYW CON 198K TOTAL CONVENTION DELEGATES 198 00198 198K TOTAL CONVENTION DELE Utahs world-class outdoor recreation and tourism opportunities fuel the states economy and create a great quality of life for its residents. More than 18 million passengers arrived at Salt Lake International Airport in 2013. Visitors included 7.1 million recreational visits to Utahs ve national parks and another 4.9 million visits to Utahs 43 State Parks. Utahs 14 ski resorts hosted 4.1 million skier days, a 4% increase over the previous year. Just 10 minutes from an international airport, downtown Salt Lake City is a central terminus for Utahs tourism destinations. Its also conveniently located at the base of a magnicent part of the Rocky Mountain Range known as the Wasatch Front. Downtown is less than 45 minutes from seven world-class ski resorts and a days drive from 48 state and 5 national parks. In addition to being a gateway to Utahs outdoor recreation opportunities, downtown is the convention tourism destination for the entire state and a regional leader in the convention business. The Salt Palace Convention Center is the main driving force for Salt Lake Citys convention industry. However, surrounding convention district hotels also attract a convention business of their own. The conventions held in hotel meeting spaces are smaller than citywide conventions but still contribute important revenue to downtowns economy. In 2014, the Utah State Legislature approved legislation that established a tax credit process for a private owner of a new qualied convention hotel in Salt Lake City. Criteria for a developer and hotel to qualify for the tax credit are as follows: Hotel must include at least 85 sq. ft. of convention meeting space per guest room. Hotel must be a full-service operation built after July 1, 2014. Hotel will be located within 1,000 feet of a convention center. Total project investment includes a minimum of $200 million in private money. The incentive may only be used for the construction of convention, exhibit or meeting space within the qualied hotel, and the acquisition or construction of related amenities, xtures or other improvements. $1.8M TOTAL SPENDING BY CONVENTION DELEGATES 1.8 881.8 $1.8M TOTAL SPENDING BY CONVENTION DELEGATES 2013 Citywide Conventions Source: Visit Salt Lake. HOSPITALITY, TOURISM AND CONVENTIONS 25 Downtown Existing Hotels and Convention Center Boundary HOSPITALITY, TOURISM AND CONVENTIONS 26 Table 11: Estimated Spending Impacts of a 1,000 Room Convention Hotel in Salt Lake City Type of Spending Construction Operations (annual) Direct Hotel $335.2 million $83.7 million Direct Convention Delegates - $13.9 million Indirect and Induced $266.6 million $72.8 million Total $601.8 million $170.4 million Source: Strategic Advisory Group (SAG). According to a study by Strategic Advisory Group, moving forward with the convention hotel will net the State and local governments approximately $500 million in additional tax resources. An approximate $99.5 million investment compared to the $600 million tax stream over the same time period equates to a 14.6% return on investment over a payback period of 7.5 years. A convention center headquarter hotel will fully leverage signicant investments in the Salt Palace Convention Center and increase citywide economic impacts. The hotel will also serve as a symbol of the city, county and states organized plan for establishing Salt Lake City as one of the countrys premier convention and tourist destinations. Table 12: 2013 Monthly Average Occupancy Rates, ADR*, and RevPAR** for Salt Lake County Hotels Month Occupancy% ADR ($) RevPAR ($) January 61.5 104.37 64.18 February 68.5 99.97 68.49 March 69.7 97.91 68.20 April 70.5 94.92 66.89 May 63.6 90.19 57.32 June 73.8 93.72 69.16 July 71.1 97.67 69.43 August 73.3 97.60 71.58 September 68.4 93.99 64.31 October 68.5 101.63 69.59 November 52.0 89.45 45.54 December 51.0 87.99 44.85 12 Month Average 65.9 95.78 63.29 * ADR = Average daily rate ** RevPAR = Revenue per available room Source: Visit Salt Lake, STR. Table 13: 2013 Monthly Average Occupancy Rates, ADR, and RevPAR* for Convention District Hotels Month Occupancy% ADR ($) RevPAR ($) January 58.2 126.29 73.55 February 67.2 121.23 81.51 March 65.8 119.48 78.61 April 70.2 119.42 83.88 May 60.5 111.43 67.43 June 73.6 115.34 84.89 July 68.1 119.71 81.55 August 70.2 118.32 83.11 September 69.5 115.32 80.16 October 72.1 131.05 94.54 November 51.4 109.49 56.29 December 49.8 103.37 51.45 12 Month Average 64.7 117.54 76.41 * ADR = Average daily rate ** RevPAR = Revenue per available room Source: Visit Salt Lake, STR. HOSPITALITY, TOURISM AND CONVENTIONS 27 RETAIL AND RESTAURANTS Retail sales in downtown totaled $800.3 million in 2013, an all-time high in ination adjusted dollars. The previous record, set the prior year, was $793.3 million. City Creek Center continues to play a large role in retail sales, acting as a driving force for the surge in sales with its 700,000 sq. ft. of retail space. While retail sales downtown have recovered from the recession, that is not the case countywide. Salt Lake Countys selected retail sales activity is still down 20% from the peak of 2007. The downtown and county comparison includes only those categories relevant to downtown retail. For instance, retail sales of automobiles, gasoline, building and garden were not included. These retail categories have limited activity downtown. The broad retail categories used for comparison were: clothing, furniture, restaurants (including fast food and drinking establishments), department stores, general merchandise and specialty retail (books, stationary, gifts, luggage, sporting goods, hobbies, etc.). In 2013, downtown captured 10.8% of sales in the county, the highest share in recent years. Due in part to City Creek Center, downtown has drawn an increased number of retail shoppers from the suburbs. Table 14: Selected Retail Sales in Salt Lake County and Downtown (Zip Codes 84101 and 84111: 2013 Dollars) Year County (000) Downtown (000) Share of County 2005 $8,395,801 $675,578 8.0% 2006 $9,056,024 $727,061 8.0% 2007 $9,351,220 $791,460 8.5% 2008 $7,313,282 $685,626 9.4% 2009 $6,835,099 $698,745 10.2% 2010 $6,223,258 $643,788 10.3% 2011 $7,097,341 $580,503 8.2% 2012 $7,534,448 $793,376 10.5% 2013 $7,438,307 $800,304 10.8% Source: Utah State Tax Commission. Clothing and shoes sales totaled $157.5 million in 2013. This is a decrease from the record year in 2012, where total clothing and shoes sales totaled $168.1 million. This decrease can be attributed to declining sales at one of downtowns major malls, The Gateway. Eating and drinking remains the top-ranked retail activity in downtown with $308 million in sales (accounting for nearly 40% of retail activity). In recent years this sectors share has been as high as 55% of retail sales. Twenty years ago, clothing and shoes accounted for as much as 45% of retail activity. Table 15: Selected Retail Sales by Category in Downtown Salt Lake City (2013) Retail Sales % Share Eating and Drinking $308,971,424 38.6% Clothing and Shoes Sales $157,572,116 19.7% Department Store Sales $99,439,027 12.4% Other Retail Sales $234,321,633 29.3% Total $800,304,200 100.0% Source: Utah State Tax Commission. RETAIL AND RESTAURANTS 29 CULTURE AND ENTERTAINMENT Home to museums, performing arts and music theaters, a professional sports arena and large community spaces, downtown Salt Lake City is the cultural and entertainment center of the region and a premier destination in the Intermountain West. While physical brickand-mortar developments are important to downtown, signature events and festivals dene what it means to be a great city and create emotional connections between a communitys population and their urban center. These events showcase a citys physical and cultural identity, creating a sense of ownership and pride for residents and visitors alike. Some of the biggest signature events include the Twilight Concert Series, Downtown Farmers Market, Dine O Round, EVE, Holiday Lights, Utah Arts Festival, Greek Festival, Living Traditions Festival, Pride Festival, Tastemakers, Gallery Stroll, Days of 47 Parade and Rodeo, Urban Arts Fest, and Urban Flea Market. Table 16: Arts and Cultural Venues in Downtown Salt Lake City Location Capacity 2013 Attendance # of Events Type of Facility Abravanel Hall 2,768 142,450 122 Performing Arts Capitol Theatre 1,876 81,964 142 Performing Arts Jeanne Wagner Theatre 501 70,594 237 Performing Arts Leona Wagner Black Box 200 15,129 123 Performing Arts Studio Theatre 75 3,040 76 Performing Arts Of Broadway Theatre 250 N/A N/A Comedy/Performing Arts The Depot 1,200 N/A N/A Live Music The Complex-The Grand 850 80,000 28 Live Music The Complex- Rockwell 2,500 80,000 15 Live Music The Complex- Vertigo 425 80,000 52 Live Music The Complex- The Vibe 200 80,000 52 Live Music In the Venue 1,300 N/A N/A Live Music Discovery Gateway 1,500 229,666 N/A Childrens Museum The Leonardo 1,000 34,195 N/A Science Museum Utah Museum of Contemporary Art 500 47,966 103 Contemporary Art Museum Hope Gallery and Museum of Fine Art 300 N/A N/A Art Gallery Clark Planetarium 900 304,180 7,060 Science Museum Energy Solutions Arena 19,911 1.7 million 151 Sports Arena Totals 36,256 2.9 million 8,161 Source: Salt Lake County for the Arts, Clark Planetarium, Larry Miller Sports Properties, United Concerts, Discovery Gateway, Downtown Alliance. * Many facilities also have event space for special events. ** All of Complex facilities totaled 80,000. Facility specic numbers N/A. CULTURE AND ENTERTAINMENT 31 TRANSPORTATION Downtown Salt Lake Citys transportation infrastructure provides unparalleled access from all parts of the Wasatch Front. At the core of this infrastructure are well-maintained roads, bicycle lanes and sidewalks along with the nations fastest growing public transit networks. Downtown is easily accessible from two of the states busiest highways, I-15 and I-80. I-15s main entrance and exit points into downtown are located at 400 South, 500 South and 600 South, which see an average of 94,000 vehicles per day. Other signicant roads serving downtown are Beck Street and State Street. Downtown is also home to the intermodal hub (250 South 600 West), which acts as a multi-modal nexus for UTAs TRAX light rail system, FrontRunner, UTA local bus service, Amtrak, Greyhound, U Car Share and SLC GREENbike. Multiple transportation options play a role in attracting more businesses, residents and visitors into downtown Salt Lake City. While the automobile still prevails as the most common mode of transportation in and out of downtown , public transit, biking and walking are all growing in popularity. UTA TRAX boardings at the 10 downtown stops averaged a total weekday ridership of 21,555. In April 2013, GREENbike launched its inaugural season with a network of 10 fully automated bike share stations and 65 bicycles. Immediately, the system garnered widespread usage necessitating an expansion in July 2013. This included the addition of two new stations and the expansion of ve existing stations. The bike share network of 12 stations and 75 bikes has proven to be useful for both residents and visitors. GREENbikes 2013 season produced 26,000 bike trips, eliminated more than 52,000 vehicle miles traveled (VMT) and 12,000 vehicle cold starts. In 2014, GREENbike plans to expand existing stations and add seven new stations (19 total stations), resulting in an estimated 45,000 trips, curtailing more than 93,000 total VMT, and more than 21,000 cold starts. Additionally, GREENbike estimates its users eliminated more than 66,000 pounds of CO2 and burned more than 2.7 million calories in 2013. Average Weekday Downtown UTA TRAX Boardings 1,185 500 West and North Temple 2,627 Arena Station 3,529 City Center Station 6,388 Court House Station 2,061 Gallivan Plaza Station 665 Old Greek Town Station 1,564 Library Station 1,032 Planetarium Station 1,683 Salt Lake Central Station 1,153 Temple Square Station 21,555 GRAND TOTAL Source: Utah Transit Authority. TRANSPORTATION 33 Downtown Surface and Structure Parking TRANSPORTATION 34 Table 17: Downtown Transportation Survey - Transportation Within Downtown Purpose Percentage (%) Mode Percentage (%) Home-Based Other 9.7% Auto - 2 Occupants 7.5% Home-Based Personal Business 5.6% Auto - 3 Occupants 6.4% Home-Based Shopping 7.7% Auto - Single Occupant 25.9% Home-based Work 6.6% Bike 5.5% Non-Home-Based Non-Work 29.0% Other 0.8% Non-Home-Based Work 41.4% Transit 6.0% Walk 48.1% Source: 2012 Household Travel Survey, Salt Lake City Transportation Department. Table 18: Downtown Transportation Survey - Transportation Into Downtown Purpose Percentage (%) Mode Percentage (%) Home-Based Other 18.5% Auto - 2 Occupants 16.3% Home-Based Personal Business 3.8% Auto - 3 Occupants 11.4% Home-Based School 1.8% Auto - Single Occupant 52.7% Home-Based Shopping 5.0% Bike 3.3% Home-Based Work 37.9% Other 0.6% Non-Home-Based Non-Work 15.5% Transit 11.4% Non-Home-Based Work 17.5% Walk 4.3% Source: 2012 Household Travel Survey, Salt Lake City Transportation Department. Table 19: Downtown Transportation Survey - Transportation Out of Downtown Purpose Percentage (%) Mode Percentage (%) Home-Based Other 18.8% Auto - 2 Occupants 16.8% Home-Based Personal Business 4.0% Auto - 3 Occupants 12.4% Home-Based School 1.5% Auto - Single Occupant 51.6% Home-Based Shopping 6.5% Bike 2.5% Home-Based Work 30.7% Other 0.8% Non-Home-Based Non-Work 16.9% Transit 10.8% Non-Home-Based Work 21.7% Walk 5.0% Source: 2012 Household Travel Survey, Salt Lake City Transportation Department. Several additional planned transportation projects will enhance downtowns place as a regional multi-modal hub. These include: Separated Bike Lanes Downtown Starting summer of 2014, 300 South and 200 West will undergo substantial infrastructure changes to improve walkability and bicycle access. Curbside parking will be shifted toward the center of the streets and physical barriers will separate auto traf c and parking from a curbside, separated bike lane. UTA TRAX University to Downtown UTA is working to reintroduce the direct University of Utah to downtown TRAX line, which will provide transportation to all major downtown stops for university students and faculty as well as neighborhoods east of downtown. Downtown Salt Lake City Streetcar Streetcars enhance and accelerate walkable, transit-oriented redevelopment in urban centers. In 2013, Envision Utah, Salt Lake City and Utah Transit Authority began a federally mandated alternatives analysis to catalogue potential routes along 200 South and 300 South, stretching from downtown to the University of Utah. This project will continue to gain momentum in 2014 as the city determines additional funding mechanisms. TRANSPORTATION 35 QUALITY OF LIFE Cities ofer unmatched possibility. They are centers for science and technology, for culture and innovation, for individuality and collective creativity, and for proximity and ef ciency. Anchored by an educated millennial generation, cities across the United States are growing at unprecedented rates. In more than two-thirds of the nations 51 largest cities, the young, college-educated population grew twice as fast within three miles of urban centers as in the rest of the metropolitan area in the past decade. With a median age of less than 30, Utah has the youngest median age of any state in the country. It is also one of the most educated. 90% of Utah citizens have at least a high school education and more than 55% have attended some college, with more than 28% having earned a Bachelors degree. This is good news for employers. With an abundance of highly educated, young individuals who are motivated to work and eager to succeed, and a state that is pro- business development, business sectors are diverse and rapidly growing. Utah is a national leader in aerospace and defense, energy, nancial services, life sciences, outdoor product and recreation, software development and information technology industries. The capital city, Salt Lake City, is a burgeoning metropolis and the regional center for culture, commerce and entertainment. Whether it is business, innovative policy, arts, culture or nightlife, the whats there question ofers limitless answers. The proximity of natural beauty and recreation, complimented by a dynamically built work and social environment, make Downtown Salt Lake City the ideal place for young professionals to work and play. Salt Lake City Notable Accolades Salt Lake City is a burgeoning metropolis and the regional center for culture, commerce and entertainment. [ [ [ [ [ [ [ [ [ [ [ [ [ [ [ [ BEST LEAST STRESSED CITY (CNN MONEY, 2014) 6 TH AMERICAS 25 BEST PERFORMING CITIES (FORBES, 2012) 8 TH 12 CITIES LEADING THE WAY IN SUSTAINABILITY (MOYERS AND COMPANY, 2013) 5 TH CITIES WITH THE HAPPIEST EMPLOYEES (GLASSDOOR, 2014) 7 TH TOP 10 CITIES STEALING JOBS FROM WALL ST. (FORBES, 2014) 7 TH 19 BEST CITIES FOR MILLENIALS (BUSINESS INSIDER, 2014) 6 TH 10 BEST CITIES FOR PUBLIC TRANSPORTATION (US NEWS, 2012) 12 TH BEST PLACES FOR BUSINESS AND CAREERS (FORBES, 2013) QUALITY OF LIFE 37 Research, Writing and Compilation Jesse Dean, Director of Urban Development Downtown Alliance Darin Mellott, Senior Research Analyst CBRE Kami Taylor, Research, Marketing and Enterprise Manager CBRE James Wood, Director, Bureau of Economic and Business Research University of Utah Design Chris Bennett, Senior Graphic Designer CBRE Derrick Cox, Graphic Designer (Maps) Salt Lake Chamber Photography Austen Diamond, David Newkirk, Brent Rowland, Margie Richlen, Jason Mathis, Jesse Dean, Doug Barnes, SLC Photo Collective Credits Boyer Company Bureau of Economic and Business Research at the University of Utah Business Insider Downtown Alliance CBRE Clark Planetarium Clearwater Homes The Complex Cowboy Partners CNN Money Discovery Gateway Forbes Magazine GOED Glassdoor GREENbike SLC Hamilton Partners HKS Architects La Porte Group Larry Miller Sports Properties Moyers and Company Salt Lake Arts Council Salt Lake City CED Salt Lake City Transportation Salt Lake County Center For The Arts Select Health Smith Travel Research Strategic Advisory Group US News United Concerts Utah Department of Workforce Services Utah Of ce of Tourism Utah State Tax Commission Utah Transit Authority Visit Salt Lake Wasatch Partners Copyright 2014, CBRE and the Downtown Alliance. The property set for this report is unique and not equal to quarterly updates provided by CBRE. Data reects properties located within the submarkets known as the Central Business District (CBD) and CBD/Periphery. Downtown Alliance boundaries are: 700 West to 300 East and North Temple to 400 South. This report also contains information from third party sources we presume to be reliable.