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Monday, May 26, 2008

Cottonwood Mall - A New Dawn

Maybe you have heard that the Cottonwood Mall located in Holladay is going to be redeveloped by General Growth Properties, Inc. (GGP). 57 acres of what used to be acres and acres of parking lots will now be transformed into a new urban walkable community. They have torn down most of the old mall except the Macy's store which will be incorporated into the new plan. The plan calls for office space, retail, entertainment, and residential space to be mixed together using traditional architecture. In fact, GGP is planning for 534 residential units which will mostly be in the form of condos and townhomes, but there will be a few single-family detached homes as well. 700,00 square feet of retail along with 100,000 square feet of office space will be integrated among these residential units. GGP even managed to fit 17 acres of open space into the plan along with a stream that will skirt the western and southern sides of the development.

In my opinion, this plan is the best possible use for that piece of real estate. The land is being recycled into a walkable mixed-use community that will be a sign of things to come. This kind of development is called gray field development a form of infill new urbanism. Many do not know this, but malls across the country are being redeveloped in much the same way. As with the Cottonwood Mall, sales for these retail establishments have been on the steady decline and many have become a blight in the community. Governments seeking to revitalize the area to increase tax base and rid themselves of blight have aided developers to turn these old malls into walkable mixed-use communities. Belmar, Colorado is a prime example of this and the local government is just starting to reap the benefits of such a community.

Many of the citizens of the Cottonwood area are skeptical of the plan and especially the tax-increment financing that the Granite School District will use to pay for an estimated $52 million in infrastructure improvements for the project. I really would not worry if I were living in that tax base. The tax base for that municipality will increase substantially when the development is finished and there will be more than enough money to pay the debt. The increase in property values will have an impact too. The Salt Lake Tribune reported that there was an immediate rise in the value of surrounding real estate corresponding to the announcement of the redevelopment plans.

GGP is the second largest owner of malls in the U.S. and is usually the purveyor of drivable suburban malls. This development is their first venture into new urbanism a move that may signal a change in policy for the company. They still have malls like fashionplace that are thriving, but a change is on the horizon. More and more conventional malls will be redeveloped into mixed-use communities along with the increased demand for walkable communities. The project currently has an elongated time-line that will last the next ten years. Will it compete with Daybreak for customers of walkable new urbanism? A little. According to estimates of demand for new urbanism, there will be no shortage of customers in this area of the market and there will be plenty for both developments.

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