Salt Lake’s new ground floor retail activation requirements may not be enough to encourage lease ups
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When Salt Lake City passed the Downtown Heights and Street Activation Ordinance, most of the focus was on the changes around allowing taller buildings in more areas inside and outside Downtown. Many failed to see the changes proposed to ground floor activation.
These changes included discouraging amenity spaces that are exclusive to the building’s tenants, like a mailroom, leasing office or other back of house functions for buildings.
Instead of lining a street with blank facades that are unwelcoming to the broader public, the city’s changes aimed to require more retail, bars, restaurants and other active uses that are offered both for the buildings’ tenants and for the public at large.
In the weeks after those changes were enacted, some within the development community see the shift in focus as a way to avoid projects found in the Ballpark Neighborhood (which is in the process of being rezoned to match these new guidelines) and to engage the streets throughout the community.
But the changes are not without critics.
Some feel the changes don’t do enough to encourage development where it should be. Instead, they say, the changes require ground-floor retail spaces where they will ultimately fail. What, then, can a developer do to encourage businesses to occupy their spaces over location alone?
“There are areas we feel the city could encourage more retail and some [areas] where it makes no sense for the project,” said Steven Alfandre, a partner with Urban Alfandre who has been vocally opposed to the recent changes.
With the ordinance falling to specific zones, such as it may fit better to address specific corridors or streets. The changes apply to the following zones:
- D1-4 (Downtown)
- TSA (Transit Station Area)
- FB-UN (Form-Based Urban Neighborhood) – except the least intense, FB-UN-1
- G-MU (Gateway Mixed Use)
- CG (General Commercial) – only between 200 and 900 South, west 300 West and I-15 (~700 W).
Some people may point to 400 S, where some retail spaces have remained empty. This area contains heavy vehicle and pedestrian traffic and is along the Red TRAX Line. Yet some retail spaces, such as the Local in the Avia, are filling up, and others, like Quattro, are empty and have never been leased. Both have similar locations, prices, and benefits for landlord agreements, yet there are differences in leasing. Clearly, location alone is not the sole factor in retailers’ decision-making.
Keith Smith of Lowe Property Group points to their massive projects, The Post District and Silos, as good examples of activated ground floor spaces.
The Post District boasts 580 units and 70,000 sq ft of retail. Almost all spaces are leased, and the project is not quite finished.
“Our design contains a critical mass and strong placement of different services close together,” Smith said. “This makes it a destination. You put that retail off by one block, and it will fail.”
Even as retail spaces can be flexible in size, and developers are seeing an increase in big box stores expanding, many developers prefer start-ups and local choices when seeking their leases.
“There is a higher risk, but the rewards are better overall,” Smith said.
Chris Hatch, a partner at Legend Partners, recently opined that developers need to be more proactive about potential occupants when designing the ground floor of a new building. Not doing so risks an expensive or even impossible retrofit down the line to make a space work for a particular retail tenant.
Developers who often want restaurant tenants in their ground floor retail spaces to act as a draw for residential tenants and visitors are often overlooking key features. According to Hatch “Key features are natural light, grease traps, fan ventilation, electrical box placements and parking.”
However, other developers pointed out the need for concentrating different concepts and flexibility in dividing spaces as key for selection.
After speaking with other developers of many mixed-use projects, the trends seem to be the same as many people seeking to rent ground floor retail are food and beverage services.
“Most developers want a coffee shop or a hip restaurant,” Tess Argyle, a retail specialist with Legend Partners, said.
When they struggle to fill the space, they start allowing whatever they can get, pushing developers to start with food and beverage concepts in mind when designing their spaces.
Overall, while location is a big factor for many retailers looking for new locations, specific design choices may help encourage them to choose over other similar sites.
Even with new city guidelines promoting more ground-floor retail, could the city do more to address specific corridors or allow flexibility in what uses are put on the first floors?
In the new Slate project, Urban Alfandre has the retail open up to and connect to their lobby, meeting guidelines and keeping a typical feel of the building for users. This use allows for traditional leasing uses on the ground floor while meeting new activation requirements.
While other amenities used to take preference for ground floors, people see food and beverage and other uses even as an amenity to their residents. Activation ordinances would be even more targeted, and specific neighborhoods and corridors would be identified that better reflect the wants of the community and the retailers.
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