The Gateway Mall is getting another chance. Yesterday, Arizona real estate company Vestar announced that it had finalized a deal to purchase the Gateway. The company purchased the Gateway with funds managed by Oaktree Capital Management, L.P.
According to a released statement, Vestar has plans to invest $30 million in revitalizing and rebranding the center. The company hopes the invest will attract a greater mix of national and regional retailers. Vestar’s plans also include enhancing the Gateway’s food and beverage offerings to incorporate unique chef-driven concepts and presenting over 300 property events annually.
“Salt Lake City is undergoing a dramatic transformation, rapidly attracting millennials and entrepreneurial firms in the private sector including technology and finance,” said David Larcher, President of Vestar in a statement. “We are confident in our vision to create a landmark destination where visitors, residents and employees will be excited to shop, dine, celebrate and engage.”
The mall has struggled to keep tenants since the City Creek Center opened in 2012 a few blocks to the east. Several tenant’s 10-year leases expired around the same time the City Creek Center opened, making it easier for Gateway tenants to jump ship. Since 2011, sales and foot traffic have dropped significantly.
City Creek was initially promoted as an outdoor shopping center that would complement, not compete with the Gateway. Instead things played out like a revenge drama with the Gateway suffering at the hands of a new mall that itself exists because of the Gateway’s initial success. The Gateway was blamed for the fall of the ZCMI Center and Crossroads Malls in the early 2000s.
The change in ownership could be just what the Gateway needs as previous owners struggled to establish a new identity for the aging mall. While the mall lost tenants and customers, growth continued in the immediate vicinity. Two new hotels and a few hundred residential units have opened within a block of the mall since 2014, including Liberty Gateway directly west and the North Sixth development a block west on 600 West.
Another nearly 800 residentials units are actively under construction near the Gateway. The 277-unit Alta Gateway apartments is under construction at on the 500 West block of 100 South. Just over a block to the north is the under construction, 4th West Apartments, a nearly 500-unit mixed-use project.
Vestar’s plan to rebrand the Gateway by enhancing the malls dining and entertainment options could be exactly what is needed to make the Gateway a distinct alternative to City Creek. Vestar could also ensure a healthy Gateway by catering to the growing residential population in and around the Gateway with the inclusion of local coffee shops, cafes, boutique stores and a pharmacy and/or grocery store.