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Utah's Trolley Square surviving in face of challenges

Published February 13, 2012 8:06 am

Shopping • Despite a shooting rampage five years ago, a downturn in the economy and rival malls making inroads, it is finding a way to thrive.
This is an archived article that was published on sltrib.com in 2012, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Trolley Square has survived it all: a shooting rampage that left five dead, the Great Recession and even a legal battle to keep one of its most important tenants, natural-foods behemoth Whole Foods.

The Salt Lake City shopping mall also has endured years of construction — and reconstruction — in an effort to better its performance in the Wasatch Front's increasingly competitive retail environment.

Today, most of the work on Trolley Square is completed, Utah's economy looks as though it's on the mend and shoppers are out in greater numbers, many of them toting Whole Foods shopping bags. The mall is benefiting from the addition of a number of new tenants that are breathing new life into the 40-year-old shopping center.

"It's a lot busier — you can even tell the difference during the weekdays, especially in the mornings, which used to be a lot more quiet," said Eric Moldenhauer, general manager of longtime tenant Rocky Mountain Chocolate Factory. "It's really nice to see."

Shopper Jodi Miller, of Salt Lake City, sees it, too. "A couple of years ago, you'd go in there and there weren't many people around. It was sad." Since Whole Foods opened in its own building on the northeast edge of the main mall about a year ago, she's gone from being a twice-yearly Trolley shopper to one who visits much more frequently.

"Every time I go to Whole Foods, I end up inside the mall, for something," she says, laughing.

That's exactly what mall owner ScanlanKemperBard Cos. was aiming for in its renovation and expansion of the venerable Salt Lake City shopping center.

As part of Trolley's rebirth, ScanlanKemperBard, or SKB, has worked to tap into the growth in "nesting" that's been an offshoot of the recession: people staying home and doing more cooking and entertaining. "We're still an upscale mall, but more than ever we're focused on what you need and want for your home," said General Manager Dawn Katter.

Shoppers can still buy clothes, eat lunch or dinner, or buy a gift at Trolley Square, as with most any mall. But these days, the Trolley Square experience also involves activities such as buying groceries and household products at natural foods provider Whole Foods, investing in high-end kitchenware at Williams-Sonoma, getting some new furniture at Pottery Barn or Pottery Barn Kids, and adding to inventories of reading material at Weller Book Works.

But Trolley Square, like others, still has its share of challenges. The 800-pound gorilla of shopping centers, City Creek Center, debuts March 22 in downtown Salt Lake City, a few miles away. The competing mall, which is owned by Taubman Centers Inc., already has lured away one of Trolley's anchor tenants, Restoration Hardware.

But that loss seems fairly contained compared to what's happening over at The Gateway shopping center along downtown's western edge. The Gateway has lost more than a half-dozen shops to City Creek, and more are expected.

TOP TASK: FILLING SPACE

Although Trolley Square hasn't lost a lot of tenants, because of the construction of new retail space on the west side of the shopping center and work on the main building, it has its share of empty retail space to fill.

Although the mall has had some success landing tenants, the newest of which is athletic wear retailer lululemon athletica, Trolley Square will have to work hard to keep bringing in new and exciting retailers, all the while trying to retain existing tenants as they are being courted by other shopping centers, said Geoff Kaessner, of commercial brokerage GSK Realty Services in Salt Lake City.

And that's no small feat, given that City Creek Center, Fashion Place Mall in Murray, Valley Fair Mall in West Valley City and even Station Park to the north in Farmington all are trying to attract many of the same tenants.

"For Trolley, it's a matter of keeping the momentum going, and that's tough," Kaessner said.

FIVE DIFFICULT YEARS

But if anything, Trolley Square is a survivor. The property, built on an old trolley complex used until 1945, became a shopping mall in 1972. A number of shopping centers and malls of its era aren't even around now. Crossroads Plaza mall and ZCMI Center in downtown Salt Lake City, for example, were demolished to make way for the new City Creek development.

Trolley Square has been spruced up over the years, but the entire property was really showing its age when SKB purchased it in August 2006 with plans for a $60 million renovation and expansion of the 10-acre property, bounded by 500 South and 600 South, and 600 East and 700 East. Another four acres along 600 South used for parking that may be developed in the future.

SKB had owned Trolley for just about six months when 18-year-old Sulejman Talovic went on a rampage Feb. 12, 2007, shooting nine people in and around Trolley Square, and killing five.

After the tragedy, the state and national economies slipped into recession, and shoppers slammed shut their wallets. Later, Whole Foods, which had committed to opening a large store on the property, began to waffle on those plans after it acquired rival grocery chain Wild Oats, which had two nearby locations.

Losing the Whole Foods store would have been a huge setback. That led SKB to file suit against the natural foods grocer, claiming Whole Foods was contractually obligated to build a store. After more than a year of delays and negotiations, SKB prevailed. The sides settled and construction began on a 44,000-square-foot store, albeit smaller than the one originally planned, which opened in March 2011.

A RENEWAL BEGINS

In spring 2007, several months after the shooting, SKB began work on the main mall building and on replacing an aging parking structure. In the mall, skylights were uncovered and seismic and infrastructure upgrades were completed.

Although the mall received a much-needed face-lift, the greatest changes were being made on the surrounding property.

SKB built three retail buildings totaling 30,000 square feet on the west side. On the northeast corner, foundation work began on the Whole Foods site, with an additional 16,000 square feet set aside for small, speciality retailers. Two stories of parking — more than 200 spaces — were built above Whole Foods.

As with any construction work, the mall at times wasn't exactly shopper-friendly, even though SKB said it did its best to keep the mall open and navigable during reconstruction.

CHALLENGE TO ADD, KEEP TENANTS

Undoubtedly, the nation's and state's retail sector has been hit hard by the economic downturn, and shopping centers and malls along the Wasatch Front have been in tenant-retention mode since 2008. Trolley, even though it has newer competitors (think City Creek) and more modern rivals (Station Park has the latest in movie theaters), has managed to remain viable.

Although it apparently is losing Restoration Hardware to City Creek Center, Pottery Barn, Pottery Barn Kids and Williams-Sonoma are locked into long-term leases, says Trolley Square's Katter. And they remain distinctive and powerful draws given that the two Pottery Barn locations are the only ones in Utah and that the Williams-Sonoma store is one of only two in the state (the other is in Provo).

Trolley Square also has some successful longtime restaurant tenants, including Rodizio Grill and The Old Spaghetti Factory. The Italian restaurant and its neighbor, Desert Edge Brewery at The Pub, both have been in Trolley Square since 1972.

Sena Vick of Salt Lake City has been coming to Trolley Square for years to eat at The Old Spaghetti Factory. Also a fan of independent book stores, Vick now comes for Weller Book Works, too.

New tenants, led by Whole Foods, are helping to compensate for the recessionary loss of shops such as the Hard Rock Cafe, whose parent scaled back during hard times, and apparel retailer Banana Republic, one of a number of stores closed by struggling Gap Inc.

Tony Weller, owner of Weller Book Works, moved his bookstore — formerly known as Sam Weller's — from Main Street to Trolley Square in mid-January. For him, it was one of the only a few malls that had any type of balance between locally owned shops and chain stores. In addition to selling new, used and collectible books, Weller also is working on adding a café to bring coffee, tea and food to the south end of Trolley Square.

"We needed to make a move, and I'm so glad it ended up being to Trolley," Weller said. "It feels like home."

Lesley Mitchell writes One Cheap Chick in daily blog form at blogs.sltrib.com/cheap. lesley@sltrib.com Twitter: @cheapchick Facebook: Facebook.com/ OneCheapChick