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Cottonwood Mall plans are alive, barely, as nearby stores languish

Published January 25, 2013 11:50 am

Retail • Nearby merchants languish, but Holladay officials, developer insist there's movement on the long-delayed project.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

In May 2008, retail developer General Growth Properties held a groundbreaking ceremony to launch the building of a sprawling new shopping center, office space and condominiums where the old Cottonwood Mall once stood in Holladay.

Nearly five years later, there still is no new massive 54-acre development — just a 54-acre crater of weeds, brush and now snow that cover what in the early 1960s was the state's first indoor shopping center.

With foot traffic down in their stores and frustration building by the day, merchants big and small in shops that surround the long-stalled project have been waiting for any sign of movement. As another new year dawns, there's still nothing concrete just yet, but Holladay city officials say they're heartened by recent signals from the developer that things are finally moving forward, if only slowly.

For many, some action, any action, can't come too soon. But most don't see relief — just more disappointment.

"They had a big plan to do big things," said Houtan Alai, owner of Salon Lydia, which used to be at the mall before the business moved to a strip mall across the street. "But it's a dead place."

Suzie Matheson, owner of The Pink Lady scrapbooking store nearby, frets over what might have been. "Not only did we think that the mall would be there, but [that] a new and improved mall would be there that would be the center for the community. All we have now is a field."

Ron Cluff, owner of the Cookies by Design store who also moved his shop from Cottonwood Mall before it was demolished, did so with the promise that the new multi-use project would provide a boost to local retailers.

"We were told when they tore it down that they would rebuild in two years. That was almost seven years ago," Cluff said. "All I hear now is that they'll build it up, but I don't think it will be in my lifetime."

Amid all the disappointment, Holladay City Manager Randy Fitts is hopeful that another five years won't go by before merchants, residents and others see progress made on the $550 million project, whose mixed-use features of retail shops, office space and condos would make it similar to The Gateway or the City Creek development in downtown Salt Lake City. The proposal calls for 617,000 square feet of stores, 226,000 square feet of office space and 614 residential units.

"The plan is still set in place," he said. "[But] the economy is [still] not solid enough," although things appear to no longer be stuck in place.

A few months ago, Holladay city officials met with executives of Howard Hughes Corp., the Dallas-based retail and community development company that now owns the property and holds the key to its future. "We're very encouraged with the things they are doing," Fitts said. "Plans are not sitting on the shelf. They are working on them.

"They are looking at [an] entertainment component with the [movie] theaters [to anchor things] — we don't know who they are. But reports are that they are making progress on that. There have been conversations with some builders for the residential component."

A spokeswoman for Hughes contacted last week insisted that the project was moving forward, but she offered no details.

"We are actively working on the development," said the spokeswoman, who did not want to be identified. "We're still very positive about it, but there is not a concrete timetable yet."

That's not a lot to go on, and area merchants worry that time is not on their side as they see traffic from potential customers along the Highland Drive-Murray Holladay Road corridor wane. The TGI Friday's restaurant on the mall property's northwest edge closed in March 2009, in part because of the stalled project, and other businesses have come and gone through the intervening years.

The only holdover from the original mall is the Macy's department store, which anchored the shopping center's northern tip on the opposite end from a J.C. Penney. To this day, red banners on its exterior still read, "Macy's is open during mall construction."

A Macy's corporate spokeswoman declined to discuss specifics on how the location has performed through the years, although the fact that its doors have remained open speaks to it resilience. Store manager Sharon Mahoney said last week that "we look forward to something happening [with the mall]. It would be great if something did." Meantime, the store "is loved by its customers, and we'll just keep serving them any way we can."

After more than 40 years of operation, the Cottonwood Mall in the early 2000s saw tenant vacancies rise in the face of growing competition from more modern shopping complexes. Then came the plan to demolish it and start anew, but the timing could not have been worse. Although then-owner General Growth built new bridges, rerouted Big Cottonwood creek that runs through the land and made a deal with Holladay city planners to receive $96 million in tax incentives for its project, it did so around 2008 as the Great Recession was taking hold.

General Growth, which also operates the Fashion Place Mall in Murray among other Utah properties, halted work on the new mall in April 2009 and later declared bankruptcy. The next year, the company reorganized into two publicly traded entities, with Howard Hughes Corp. taking on the development of master-planned communities, including Bridgeland in Houston and Summerlin in Las Vegas. Hughes also has other commercial developments planned including one in lower Manhattan and another in Charlotte, N.C.

Whether all this will translate into meaningful action soon in Holladay remains to be seen.

Scrapbook store owner Matheson tries to remain hopeful, but says she does half the business she used to do before the old Cottonwood Mall was demolished.

"I just feel like I'm in no-man's land. We don't have a real draw to bring people here," she said. "I'd love to get back to where it was just three years ago. But every day you just try to figure out how to make it work."

vince@sltrib.com

Cottonwood Mall, through the years

Opened • In 1962

Claim to fame • It was the first indoor shopping mall built in Utah

Original anchors • ZCMI on the north end of the mall and J.C. Penney in the south end.

Demolished • In 2008

Current owner • Howard Hughes Corp.