The Falls Event Center — now in the midst of a companywide bankruptcy — emailed customers last week to announce that it was closing June 23 and any events scheduled after that date would be canceled.
Marcel Gaztambide and Bria Rubie were “definitely concerned" when they got the message.
The couple’s wedding reception was to be held at the Salt Lake City venue, 580 S. 600 East — inside Trolley Square — in early August, and they had already printed invitations for 400 people, said Gaztambide. “We didn’t really know how we were going to find another venue on such short notice."
The couple’s fears were temporary, though, because the Union Event Center in downtown Salt Lake City has signed a short-term lease with Trolley Square and agreed to stage at The Falls all the events that were booked there through December.
“We’ve reached out to the brides, grooms, corporate event planners and anyone else to let them know that we are executing their event,” said C.J. Corry, co-owner of the Union Event Center, 235 N. 500 West. “People are frustrated and disappointed, and we’re just trying to make the best out of an unfortunate situation.”
Before opening the Union Event Center in 2018, Corry was the sales manager at The Falls. “I know the place,” he said, “I’m excited to be there again.”
There were 75 events booked between June 27 and Dec. 21 at The Falls, said Taymour B. Semnani, general counsel for SK Hart Properties, the owner of Trolley Square.
After the email about the closure was sent, Semnani received calls from Gaztambide and other customers worried about their events and their deposits. He assured them that he was working out a deal with Union Event Center to save the center.
“They can stay in the space per their contract,” he said. Those who don’t want to stay "will get their deposit back.”
After news reports about The Falls bankruptcy were published, “four different event centers reached out to us,” Semnani said. “It’s a good turn of events.”
Semnani said he expects a longer-term lease with Union Event Center to be signed later this year. The exact details are yet to be worked out. “Trolley Square is undergoing some changes in merchandise mix,” he said, “but I expect some variation of an event center being here long term.”
A new leaseholder could put an end to the financial losses that Trolley Square has incurred by renting to The Falls Event Center LLC — the larger parent company that operated eight event centers in five states and was founded by Utah businessman Steve Down.
In July 2018, the parent company filed for Chapter 11 protection from creditors in U.S. Bankruptcy Court in Utah. Under Chapter 11, the company continued to operate while it attempted to reorganize and repay creditors.
In recent months, though, the company began liquidating its assets. Court documents show the parent company — through its appointed legal trustee Michael Thomson — hired real estate brokers “to market and sell" seven of the eight Falls Event Center properties, including one in St. George. The others include Gilbert, Ariz.; Elk Grove, Fresno and Roseville, Calif.; Littleton, Colo.; and McMinnville, Ore.
Last week, The Falls Event Center in Salt Lake City — the only venue the parent company leased instead of owned — followed suit, announcing its closure in an email to customers.
“I have been reviewing the operations of The Falls Event Center,” Thomson wrote, “and have determined that it is no longer viable to manage events at our Trolley Square location. We will be closing operations at that site on June 23, 2019. Any events scheduled after that date will be canceled.”
Before filing for bankruptcy last year, Down was accused of making misrepresentations by building and operating the centers using high-interest loans from private investors, according to a lawsuit, filed by the U.S. Securities and Exchange Commission. Down, a self-described “cause capitalist," agreed to pay a $150,000 fine without admitting or denying the allegations.
It’s not the only company co-founded by Down that has struggled. In March, the Utah-based Even Stevens restaurants filed for Chapter 11 bankruptcy in Arizona.