October 9th 2006

In This Issue

Economic Snapshot – Twelve Months FY2006

Economic Notes:

This Weeks Leads



Salt Lake City Downtown Proposed Development – By the Numbers

On Tuesday October 3rd the LDS Church announced a Mixed-Use Development to replace the Crossroads Plaza and ZCMI Malls

Major features include the following:

  • Commercial Class A Office Space
    • Total Proposed = 2,000,000 sq ft
    • Est. # of Employees = 8,000
    • Est. Taxable Value = $500,000,000
    • Est. Annual Property Taxes to SLC = $2,360,000
  • Current Class A Office Market
    • Q2 2006 SL CBD Class A Total = 2,671,000 sq ft
    • Q2 2006 SL CBD Total Available = 51,000 sq ft
    • Q2 2006 SL CBD Total Absorption = 66,000 sq ft
    • Q2 2006 SL CBD Rents/sq ft = $23.20
    • Q2 2006 SL CBD Vacancy = 1.9%
  • Mall Retail Space
    • Total Proposed = 928,000 sq ft
    • Fashion Place in Murray = 950,000 sq ft
    • Est. Annual Retail Sales = $510,400,000
    • Est. # of Retail Employees (F.T. Equiv) = 2,000
    • Est. Taxable Property Value = $157,800,000
    • Est. Annual Property Taxes to SLC = $745,000
  • Current SL Co Regional Mall Market
    • Q2 2006 SL Co Regional Mall Total = 5,282,000 sq ft
    • Q2 2006 SL Co Regional Mall Total Available = 1,061,000 sq ft
    • Q2 2006 SL Co Regional Mall Total Absorption = 47,000 sq ft
    • Q2 2006 SL Co Regional Mall Rents/sq ft = $62.11
    • Years to absorb at current rate = 19 yrs
  • Housing
    • Total Proposed = 400 Condo/Apt Units (+366 in future)
    • Est. # Residents = 1,280
    • Est. Taxable Property Value = $77,000,000
    • Est. Annual Property Taxes to SLC = $363,000
  • Current SL Co Apartment Market
    • Q2 2006 SL Co One Bed/One Bath
      • Q2 2006 SL Co Rent (Post 1990 Const) = $673/Mo
      • Q2 2006 SL Co Rent/Sq Ft= $0.89/sq ft
      • Q2 2006 SL Co Current Vacancy = 3.2%
    • Q2 2006 SL Co Two Bed/Two Bath
      • Q2 2006 SL Co Rent (Post 1990 Const) = $828/Mo
      • Q2 2006 SL Co Rent/Sq Ft= $0.80/sq ft
      • Q2 2006 SL Co Current Vacancy = 3.2%
  • Bottom Line
    • Current Taxable Value = $216,600,000
    • Current Property Taxes Paid to SLC = $3,500,000
    • Net New Annual Property Taxes to SLC = $2,450,000,000

Sources: The LDS Church, Salt Lake Tribune, Commerce CRG, Calculations Bonneville Research.

Plateauing: Redefining Success at Work

As an executive coach who works with corporations, Monica McGrath has her ear to the ground. And what she is hearing is this: A number of men and women in middle management are increasingly reluctant to take the next step in their careers because the corporate ladder is not as appealing as it used to be, and the price to climb it is too high. "These people are still ambitious, and they are still driving. They just aren't driving for the same things they were driving for 15 years ago," she says.

What may be happening, suggest McGrath and others, is that people are setting career paths based on their own values and definitions of success. They are not burned out or dropping out; they are not going back to school and changing careers; they are not having a mid-life crisis. Instead, they are redefining how they can keep contributing to their organizations, but on their own terms. Rather than subscribe to the 'onward and upward' motto, they are more interested in 'plateauing,' unhooking from the pressure to follow an upward path that someone else has set.

A number of oft-cited trends in the workplace contribute to this phenomenon: Technological advancements are breaking down the barriers between work and non-work hours, adding to the pressure to constantly be on the job or on call. Strategic decisions like restructuring, downsizing and outsourcing are adding to job uncertainty at all levels and reducing the number of promotions available to mid- and upper-level managers. The continuing influx of women into the workforce keeps raising the level of stress when it comes to work/life balance issues.

Lois Backon, a vice president at Families and Work Institute (FWI), a New York-based non-profit research organization, points to a report FWI does every five years entitled, "National Study of the Changing Work Force." The latest one was released in 2003. One of their areas of research relates to what the organization calls "reduced aspirations" among various sectors of the workforce. "This is an incredibly important issue, and it offers some of the most troubling data out there for corporate America," she notes.

For example, in one of its latest reports, "Generation & Gender (2004)," which uses data from the national study to determine differences among generations, FWI found that fewer employees aspired to positions of greater responsibility than in the past. Among college-educated men of Gen-Y, Gen-X and boomer ages, 68% wanted to move into jobs with more responsibility in 1992, versus only 52% in 2002. Among college-educated women of Gen- Y, Gen-X and boomer ages, the decrease was even higher: 57% wanted to move into jobs with more responsibility in 1992 versus 36% in 2002. (Generation Y is typically defined as those born between 1980 and 1995, Generation X as those born between 1965 and 1980.)

"We then did a more focused look at leaders in the global economy," Backon says. "We took the top 10 multinational companies -- such as Citicorp and IBM -- and conducted in-depth interviews with the top 100 men and top 100 women. Of those leaders, 34% of the women and 21% of the men said they have reduced their career aspirations."

This plateauing is part of a bigger phenomenon in the workforce -- one that also includes people putting higher priorities on activities outside their jobs, from family to volunteer work to hobbies. For example, in the FWI study, the reason that the majority (67%) of these leaders gave for their response was "not that they couldn't do the work, but that the sacrifices they would have to make in their personal lives were too great," says Backon.

"We call it 'negative spillover from their jobs to their homes,'" Backon adds. "The whole issue of overwork, of needing to multitask, of having to deal with numerous interruptions during their work day" affects employee attitude, not just toward their jobs but also their free time. "Based on our research, we know that 54% of employees are less than fully satisfied with their jobs, 38% are likely to actively look for new employment in the next year and 39% of employees feel they are not engaged in the work they are doing." Most employees "do want to feel engaged by their jobs. The term 'reduced aspirations' does not mean they are not talented or not good at what they do. They are. But in focus groups, they also say things like, 'I need to make these choices because my family is a priority,' or 'I need to make these choices to make my life work.'"

One way to look at this phenomenon, adds Wharton management professor Nancy Rothbard, is that some employees "still derive some sense of identity from their jobs but they have, or are seeking, other ways to get that fulfillment." They are no longer pushing for the bigger raise, the larger staff, the more prestigious title; "they are taking energy that had been focused primarily on goals defined by the corporation and focusing it elsewhere."

Continued Next Week!

Source: McKinsey& Co.


Proposed Downtown Salt Lake City Development - By the numbers & Bottom Line

Plateauing: Redefining Success at Work - Part 1

  • Economic Snapshot – Twelve Months FY2006
    • Sales and Use Taxes +10.5%
    • Corporate Franchise Taxes +77.5%
    • Individual Income Taxes +18.3%
    • Individual Income Taxes: Withholding +10.8%
    • Severance Taxes +36.4%
    • Mineral Taxes: Withholding +35.8%
    • Uniform School Total +24.1%
    • Motor Fuel Taxes -0.4%

    Source: Utah State Tax Commission, 9/15/06

  • Economic Notes:
    • Personal Income

    • Personal income rose 0.3% in August, matching expectations and down from an unrevised 0.5% increase in July. Spending rose 0.1%, also in line with expectations, but down from July’s unrevised 0.8% gain. The core PCE deflator rose 0.2%, matching the top line deflator. The saving rate rose to -0.5%
    • Consumer Credit (G19)

    • Consumer credit increased $5 billion or 2.6% at an annual rate in August. The details of the report show that the latest increase in consumer credit was driven by gains in both nonrevolving and revolving credit.
    • Monster Employment Index

    • The Monster Employment Index dipped one point in September with a reading of 172. The continued strength in the index was boosted by an increase in the demand for workers in mining and transportation pointing to the continued strength of this industry.
    • Employment Situation

    • The economy created considerably fewer jobs than expected in September. Payroll employment increased by only 51,000. The weakness was broadbased across industries. However, the impact of this is dampened somewhat by the upward revision of August payrolls, from 128,000 to 188,000. The unemployment rate nonetheless declined in September to 4.6%; it is derived from a survey of households.
    • Chain Store Sales

    • Chain store sales grew 3.8% in September, according to the ICSC chain store index. Results were slightly below expectations and mixed across retailers. Cool weather and lower gasoline prices supported sales over the month.
    • MBA Mortgage Applications Survey

    • Mortgage demand increased 11.9% in the week ending September 29. Purchase applications increased 7.6% and refinance applications increased 17.5%.
    • Oil and Gas Inventories

    • Crude inventories increased 3.3 million barrels during the week ending September 29. This was contrary to a market forecast of a 0.5 million draw in inventories. Gasoline stocks rose 1.2 million barrels. Refinery utilization fell 2.5% to 89.9% during the week. The mixed details of the report suggest little market reaction, especially given the geo-political and OPEC-related worries driving current pricing.
    • Construction Spending (C30)

    • Construction spending increased 0.3% in August, following downward revisions in July. Private construction advanced a slight 0.1%, entirely due to strong commercial construction. In addition, public construction increased by 1.1%.
    • Semiconductor Billings

    • Global semiconductor sales rose by 2.1% in August on a three-month moving average basis. Global billings are now 10.5% higher than in August 2005. As has been the case for much of the past year, August growth was led by sales in the Americas (3.6%) and Asia Pacific (2.0%) regions.
    • Vehicle Sales - AutoData

    • Vehicle sales improved in September to 16.6 million units on a seasonally adjusted annualized basis, from 16 million in August. Much of the improvement can be attributed to the surge in Toyota's sales, although both Ford and General Motors saw better sales month to month (seasonally adjusted). The September number is about equal to the average for the first eight months of the year.
    • Factory Orders (M3)

    • New orders for manufactured goods were unchanged over the month in August. Durable goods orders, which had registered a 0.5% decline in the advance release, were revised up to no change over the month. Nondurable goods orders also were unchanged in August. Shipments rose 1.1% and inventories registered a 0.4% gain. The report was better than expected and confirms that factory conditions remain solid half way through the third quarter.

    Source: Economy.com

  • This Weeks Leads
    • Factory Connection
    • Guntersville Outlet, Inc. trades as Factory Connection at 195 locations throughout AL, AR, FL, KY, LA, MO, MS, TN and TX.
    • The apparel stores, which carry men’s and women’s active wear, occupy spaces of 3,000 sq.ft. to 4,000 sq.ft. in strip and value centers and urban/downtown areas.
    • Plans call for 20 to 25 openings throughout AR, KY, LA and TN during the coming 18 months.
    • Typical leases run three to five years. A vanilla shell is required. Preferred demographics include a population of 12,000 within three miles earning $30,000 as the average household income.
    • For more in formation
      • Kenny Littleton
      • Guntersville Outlet, Inc.
      • 701 Railroad Avenue
      • Albertville
      • AL 35950- 9649
      • 256-878-2866
      • Fax 256-878-0629
      • Email: kal@factory-connection.com
      • Web site: www.factory-connection.com.
    • Hyde Park Steakhouse
    • Hyde Park Steakhouse operates eight locations throughout OH.
    • The restaurants occupy spaces of 7,000 sq.ft. to 8,000 sq.ft. in lifestyle centers. Growth opportunities are sought throughout the Washington, DC and the Baltimore, MD area during the coming 18 months, with representation by Sax Realty, Inc.
    • For more information, contact:
      • Les Sax
      • Sax Realty, Inc.
      • 4912-A Del Ray Avenue
      • Bethesda, MD 20814
      • 240-497-1192
      • Fax 240-497-1070
      • Email: lsax@saxrealty.com.
    • Greenberry’s Coffee & Tea
    • Greenberry’s Coffee & Tea operates seven locations throughout VA.
    • The coffee and tea shops occupy spaces of 1,100 sq.ft. to 2,000 sq.ft. in downtown areas, freestanding locations and specialty and strip centers.
    • Plans call for 10 openings throughout the metro Washington, DC area during the coming 18 months, with representation by JBG Rosenfeld Retail.
    • For more information, contact:
      • John Mitchell or Billy Orlove
      • JBG Rosenfeld Retail
      • 4445 Willard Avenue, Suite 700
      • Chevy Chase, MD 20815
      • 301-657-0700
      • Fax 301-657-9850
      • Email: jmitchell@jbgr.com
      • Web site: www.greenberryscoffee.com.
    • Dippin’ Dots
    • Dippin Dots Franchising, Inc. trades as Dippin’ Dots at 247 locations nationwide and internationally.
    • The stores, which specialize in flash frozen, beaded, free flowing ice cream, occupy spaces of 100 sq.ft. to 1,500 sq.ft. in freestanding locations, malls and lifestyle, outlet, specialty, strip and tourist centers.
    • Plans call for 90 openings nationwide during the coming 18 months.
    • Preferred cotenants include Old Navy, Limited Too, Limited, Gap and Abercrombie & Fitch.
    • For more information, contact:
      • Jamie Ehling
      • Dippin’ Dots Franchising, Inc.
      • 1640 McCracken Boulevard, Suite 100
      • Paducah, KY 42001
      • 270-575-6992
      • Fax 270-575-6997
      • Email: jamehl@dippindots.com
      • Web site: www.dippindots.com.
    • Merlo’s Cutlery and Merlo’s Cutting Edge
    • Merlo’s Cutlery, Inc. trades as Merlo’s Cutlery and Merlo’s Cutting Edge at 21 locations throughout AZ, CA, ID, NC, OR, TN and TX.
    • The stores, selling kitchen and sporting knives, occupy spaces of 500 sq.ft. to 800 sq.ft. in malls, lifestyle, outlet and tourist centers.
    • Growth opportunities are sought throughout CA, NV, OR and WA during the coming 18 months.
    • Typical leases run 10 years. A vanilla shell and specific improvements are required.
    • Preferred cotenants include Lord & Taylor.
    • Preferred demographics include a population of 300,000 within 15 miles earning $55,000 as the average household income.
    • For more information, contact:
      • David Merlo
      • Merlo’s Cutlery, Inc.
      • 318 East Oak Street
      • Santa Maria, CA 93454
      • 805-925-9343
      • Fax 805-922-5399
      • Website: www.merloscutlery.com.

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