Tooele City is at a crossroads in its quest to establish a major retail center on 33 acres it owns west of Main Street and south of 1000 North, according to a city business official.
“We have a lot of interest from potential business tenants, but we don’t have an anchor store,” said Randy Sant, the city’s economic development consultant. “Our dilemma is whether to move forward with development without a major anchor, or to wait until we have an anchor. In a perfect world, the anchor tenant and other tenants would come in at the same time.”
He added, “Part of the master plan is for six smaller businesses in line with the anchor store. We have plenty of businesses interested for those smaller slots.”
Sant declined to list the names of businesses interested in locating at the potential retail center, but said he has talked to office supply stores, restaurants, financial institutions, men’s and women’s clothing stores, pet supply stores and a couple of grocery stores that do not have operations in Tooele.
The land was purchased from a previous developer by the Tooele City Redevelopment Agency in 2014 for $5 million. The RDA purchased the land from a previous developer to make sure it would one day be developed for retail and not housing.
The RDA used the sale of a franchise tax revenue bond to make the purchase. The RDA consists of Mayor Patrick Dunlavy and the city council.
Last December, the RDA signed a memorandum of understanding with The Boyer Company, a real estate development firm in Salt Lake City. Boyer is interested in eventually buying the land from the RDA and overseeing its retail operations. The MOU ends in December.
“We could agree on another MOU with Boyer or move on without them,” Sant said. “The agency [RDA] has been debating and discussing the options.”
Sant said Boyer’s responsibility was to prepare a preliminary site plan and work to find an anchor tenant and other retail users for the property.
“They really want it to succeed and realize this is the best place for a major retail center,” he said. “They have done some good work finding tenants, but they are hesitant for a few reasons.”
Sant indicated those reasons include the recent boom in construction, which has increased building costs by 25 to 30 percent.
“Retailers still are trying to rebound from the recession in 2008. A big increase in online sales are discouraging businesses from building new stores,” Sant said.
“Rooftops also are a concern,” he added. “City leaders continue to push for residential development for the city, which always helps push economic development. Another thing is we know the types of businesses people want. So those are the businesses we are looking for, just not any business.”
Even so, Sant said interest is high for retailers wanting to locate in Tooele.
“We really would like to have everything finalized for the center in 2018, and break ground in the spring of 2019,” he said.
City leaders are deciding whether or not to offer incentives for businesses to locate in the potential retail center.
“We’re now weighing our options as to whether we should offer incentives,” Sant said. “We haven’t made up our minds.”
Possible options are tax increment financing, selling property for less, helping to fund infrastructure, or providing infrastructure at no cost.
“All of those things impact the rest of the city’s budgets, so do we go forward with incentives or be patient until we have an anchor tenant,” Sant said. “Other businesses are much more likely to come onboard with an anchor in place.”