Salt Lake Tribune | 2003-10-12 | Page 13

The Salt Lake Tnbune UTAH @ Continued from previous page Als Sunday, October 12, 2003 Boyer Co. residential and buiid-to-suit properties erty adjacent to The Gateway on 500 West from 50 North to 400 South, put in you taking anything off Main Street, but we can’t stop you from doing RESIDENTIAL PROJECTS a city street and utilities, bury electri- that.’ “ cess. “They got into the business in cal transmission lines and put in park the 1970s, and did really well during a blocks, The Boyer Co. agreed that the stores in The Gateway would be no larger than 45,000 square feet to protect Reid says. “If people really understood what happened, they would understand that Boyer has been totally jerked downtown from retail flight. Nordstrom wants a larger store and Boyer around on this deal.” Boyer Co. executives say if anything, they feel misunderstood. “We've actually received a lot less [in public money] than developers have been given on similar projects elsewhere,” said Jake Boyer. time we were having a lot of growth,” said Jim Wood, interim director of the University of Utah Bureau of Economic and Business Research. “They hung on through the ‘80s when times weren’t so good and by the 1990s, when westarted having anotherburst of growth, they had credibility and the momentum to take advantage of it.” Boyer also proved unwavering when controversy arose. In the late 1960s, when it wanted to build the towering One Utah Center in downtown Salt Lake City, the city asked Roger Boyer to build an accompanying garage underground to permit Gallivan Plaza to be built at street level. Wary of a possible cost overrun, Boyer insisted the contract make the city responsible. The Boyer Co. had planned to spend HohensHag 6000W. 11800South OFFICE/WAREHOUSE/MEDICAL BUILDINGS BUILT FOR OTHERS awaits a Tuesday Salt Lake City Coun- cil vote on whether zoning should change to allow departmentstores at The Gateway. Nonetheless, many downtown business owners are enraged The Boyer Co. will ask the City Council to waive the store-size limitation. “Boyer knew upfront that they couldn’t have departmentstores. And now they are whining and crying they can’t have a departmentstore,” said John Speros, owner of Lamb’s Cafe on Main Street. “Boyer knew therules go- about $9 million to build the garage, but so they can survive.” While Roger Boyer concedes he agreed to the store-size limitation, he Co. to cover the cost of the overrun, said Anderson, as a newly elected mayor, strong-armed him intoit. later agreed to pay nearly $9 million of the unanticipated costs while the company paid $1.2 million. In the spring of 2000, after The Boyer Co. had started construction on The Gateway, Anderson slapped the 45,000- square-foot limitation on the develop- Taking a risk: Though The Boyer Co. tackled ever larger and more complex projects, nothing prepared the developers for The Gateway, by most measures the largest commercial undertaking in Utah. With 625,000 square feet of retail space, three office buildings, a 332-unit behind thisfacade ofbeingpillars ofour community.” DAVID ELDER Caffall Tile in South Salt Lake said. He had two choices: appeal Ander- fallout from The Gateway, which he be- munity.” son’s decision to add the size restric- lieves is a national model for mixed-use development. The development’s retail space is A construction company and subcon- standard and an evenlargerrisk. tractor filed lawsuits alleging Roger Boyer had shortchanged them. makethe project work financially.It also sold some other properties — including a plum 200,000-square-foot building at the U.’s Research Park occupied by ARUP Laboratories — to a real estate investmenttrust in exchange for shares in that trust. The transaction ensured they have enough readily accessi- ble cash should they need it. But bitterness remains. Caffall Tile in South Salt Lake says it only recently was paid the last $800,000 it was owed. “Caffall Tile doesn’t set foot on another Boyer Co. project unless they One controversy after ancther: The subcontractor controversy had barely died down whenthe Nordstrom contro- “We had to havethecity follow through on whatit had already said it was going to do,” Roger Boyer said. “If before we had already started construc- third of the condominium development ceed.” Stuart Reid, community and eco- is sold in advance. Same-store sales in The Gateway’s shops are up between 10 percent and 13 percentoverlast year’s panies locate in the development. The Lake City under Corradini, said city leaders who pushed for The Boyer Co. to build The Gatewayoriginally sup- levels. And the cineplex and planetar- ported large retail in the development. “When Deedee and I were involved, we were encouraging them to go after has been underappreciated in our com- BoyerCo., for example,is set to receive $16 million over 20 years to partially re- imburse the company for its investmentin public improvements and parking in a formerly blighted area. The amount The BoyerCo.is set to receive each year will be reduced if the company lures businesses from other and these guysare letting everyone Gateway. know whata good project it is and how parts of downtown Salt LakeCity. But in exchange for the city spending about $20 million to acquire prop- that restriction had been placed on us nomic developmentdirector for Salt Saks Fifth Avenue and other high-end departmentstores,” said Reid, who unsuccessfully ran for mayor against Anderson and now is Ogden’s economic developmentdirector. “We said to them, ‘We don’t want ~ NORDSTROM } t 4 University Mall 801.426.2800 (closed Sundays]. Crossroads Plaza 801.322.4200. Fashion Place 801.261.4402. Shipping charges may apply. For orders, answers or advice, call our Beauty Hotline at 1.800 7beauty or visit us at nordstrombeauty.com é nearly 90 percent leased and the apartment complex is more than 90 percent tion, we may not haveelected to pro- want to pay us upfront,” David Elder said. “There’s this whole guise of them being such good guys and honestciti- community-minded they are. In the begin construction. The controversy stems from the fact that because The Gateway received moneyfrom Salt Lake City, city leaders have someinfluence over which com- zens. We're barely making our payroll The Gateway opened for business in tion, which would delay or even kill The Gatewayproject, or agree to it to occupied, he says. Mostof the space in the first two office buildings is more than 90 percentleased andit is starting work on a third office building. One- versy ignited last year with the upscale retailer’s announcementit would leave downtown if the city denied its move to The Gateway. contractors say they, too, financed The A numberof The Boyer Co.’s sub- eLEAN this facade of being pillars of our com- represented a vast undertaking by any erties to generate the cash needed to John Speros owner of Lamb's Cafe tors out of business. They hide behind tors a year later complained they never had been paid for work on the project. The Boyer Co. had to sell some prop- He said if he refused to agree to the the day they have no plans to honor their commitments.” Boyer Co. CEOOstler laments the along with the cineplex, planetarium and other attractions — The Gateway Boyer countered thatbilling disputes with general contractors Bud Bailey Construction and Layton Construction Co., who were responsible for paying subcontractors, delayed payment. Layton, wholater filed a lawsuit, and Bud Bailey eventually settled with The Boyer Co. and subcontractors were paid, The Boyer Co. said. “Boyer knew the rules going in and now they'rejust trying to suck more moneyfrom everybody else so they can survive.” Financing for The Gateway’s apartment complex depended onthe city making that investment, Roger Boyer meantime, they are putting subcontrac- way. No one,” said Bill Martin of Colliers Commerce CRG, a commercial brokerage in Salt Lake City that has worked with Roger Boyer over the years. “They are outright liars,” said westside community activist and City Council candidate J. Michael Clara. “Boyer does whateverit takes to get the project going, knowing full well at the end of and put in the park blocks as it had previously agreed. November 2001, but many subcontrac- have taken on the risk of building Gate- ing. ment, Roger Boyersaid. limitation, Anderson vowed the city would no longer bury powerutilities apartment compiex and 150-unit condominium complex under construction “To give you an idea ofjust how ag- Corporate image: As it stands now. The Boyer Co.’s image has taken a beat- ing in and nowthey’re just trying to suck more money from everybody else the final bill came to $19 million. The city, which atfirst wanted The Boyer gressive they are, no one else would “The real story has never been told,” x i ium are drawing crowds. “| feel that [The Gateway] project munity,” Ostler says. “Ultimately, though, that doesn’t matter. People are voting with their dollars. We’re seeing increased sales, increased traffic. That speaks volumes about what’s going on here.” [e-mail], [e-mail]