Utah Woolen Mills has been a downtown destination for 101 years and that won't change for another 60 years or so, now that the clothing retailer has struck a deal with its landlord, the LDS Church.

The arrangement not only keeps the Salt Lake City store stationed on South Temple during and after renovation of the downtown malls, it also means the church has removed a significant barrier in its path to redeveloping those shopping centers.

At the same time, though, it may have jeopardized Nordstrom's position in the project. The department store was slated to move to part of the Woolen Mills' space. The plan was to remain open during construction and usher in a new store in 2009.

"This decision does affect the plan," Nordstrom spokeswoman Brooke White said Wednesday. "We're anxious to see a new plan."

For his part, the president of Utah Woolen Mills was relieved.

"They are going to uphold their end of the lease and they've assured us they will keep us here," Bart Stringham said Wednesday after a meeting with church attorneys and president of the church's development company. "We never wanted to be a thorn in their side. We just wanted to be here. They can go forward and know that we're rooting them on."

The LDS Church declined to comment.

Observers say the deal with Utah Woolen Mills - just before Borders closes Friday at Crossroads Plaza to make way for construction - suggests an announcement on the malls' makeover cannot be far behind.

But a Nordstrom hang-up could push it back.

"That's very good news for all of downtown," Alison McFarlane, senior adviser on economic development to Mayor Rocky Anderson, said of Utah Woolen Mills' resolution.

While anticipating the mall project will move forward quickly, she hopes the church will retain Nordstrom. "They're an enormous asset in the city."

Added Bruce Bingham, a downtown developer and chairman of a downtown Downtown Alliance committee: "It's terrific that they'll be able to have that worked out [with Utah Woolen Mills] so the church can go ahead with its project. I expect it means they're closer. How close? There are probably other moving parts that have to be worked out."

LDS Presiding Bishop H. David Burton told City Council members in April that teams were working "feverishly" on the project. The price tag has been pegged at $1 billion and the project will include housing alongside retail. The shops will be closed Sunday, but restaurants will be allowed to serve alcohol. The design is expected to break up the malls' large blocks with pedestrian corridors.

The church has had to negotiate with 250 entities. Utah Woolen Mills matters in that puzzle because the owners didn't want to budge from their 59 W. South Temple spot across from Temple Square and its 5 million annual visitors, as well as the Salt Palace and its thousands of convention goers.

Initial designs for the mall erased the shop and replaced a portion of it, along with all of the adjacent Inn at Temple Square, with anchor tenant Nordstrom

While Stringham said the church never offered to buy out his store in the three years of sporadic negotiations, and he wouldn't have taken such an offer, the store president feared the church would force a move - invoking the biblical tale of David and Goliath.

But Utah Woolen Mills held a formidable stone in its slingshot. The Stringhams - three generations currently are involved with the business - have about 60 more years on their lease. They also have an unheard of 10-stall private parking lot.

Now the store will keep both. Bart Stringham suspects the strength of the lease and the longevity of the business forced the church to back off.

"We've been here 100 years. I'm thinking they recognized we would maybe be a good thing to have right across from Temple Square," Stringham said, noting the store has weathered a handful of other downtown construction projects while other shops have shuttered. "We've kind of been preserved. Maybe they don't want to be the ones to destroy us."

What has been decimated are Crossroads and ZCMI. The church bought Crossroads three years ago (it already owned ZCMI) to ensure the blocks weren't a blight next to Temple Square. But with retailers clearing out, the malls mar downtown.

The church has to clear out the property before it can tear down the buildings.

Stringham isn't worried about operating in the middle of a construction zone. Utah Woolen Mills has endured it before - when Crossroads was built, during Main Street beautification and light-rail construction. The private parking lot will help see them through.

"I can't tell you, it's like a huge weight has been lifted off my shoulders," Stringham said. "We're going to be here and it doesn't appear to be a fight."

hmay@sltrib.com