Monday Report - Who's Really the "Other Downtown"? September 24th, 2007

Utah Economic Snapshot

Economic Notes:

Come Ride With Us!

This Weeks Leads

Josie Johnson Memorial Ride 2007



Where is "Downtown"?

Where is the "Commercial Heart" of Salt Lake County?

Where is "Downtown"?

Where is the "Commercial Heart" of Salt Lake County?

Downtown (also called a "central business district" in British English) is a term used in North America when referring to an inner city, usually both in a geographical and commercial / community sense.

A Central business district (CBD) (also called 'Downtown' in American English) is the commercial and often geographic heart of a city.

The Salt Lake City Downtown (CBD) is still #1, but watch out!

Sandy and Knudsen's Corner (Cottonwood Heights & Holladay) are closing fast!

The Lehi Alpine Exit is also going to develop into a major rival to Sandy.

Thanksgiving Park - at the North End of Thanksgiving Point - will have 710,000 SF of Class A office space, and Xango already has 400,000 SF completed.

Commercial Center Class A Office Space, 2007

CityTotal Class A Office Space (sq ft)
Salt Lake City CBD2,671,076
Knudsen's Corner1,620,165
Sandy City719,517


  1. Cottonwood Heights and Holladay both serve Knudsen's Corner.

Knudsen's Corner Class A Office Space, 2007

BuildingClass A Office Space (sq ft)
Cottonwood Corp Center473,533
Old Mill Corp Center 375,509
Blue Cross Blue Shield222,000
Cowboy Partners72,000
Old Mill Business Center 59,123

Sandy Class A Office Space, 2007

BuildingClass A Office Space (sq ft)
Board of Realtors103,000
South Towne Corp I124,000
South Towne Corp II124,000
Centennial Plaza66,646
New Construction - Complete in 6 Months
Sandy Park Center 122,960
Jordan Valley Tech Center105,000

Source: Commerce CRG, Jeff Rossi 2007

Driving radical change

  • Genuine transformations take place on a scale different from that of routine change programs- and are much harder to pull off.
  • Companies need discipline to handle the different dimensions of a transformation. Two of the most urgent challenges are setting appropriate aspirations and mobilizing energy and ideas.
  • Aspirations must be clearly defined, broken down into digestible themes, made relevant, and communicated in a compelling story.
  • Ideas and energy make up the transformation engine. Companies can unleash energy by using proven catalysts.

Source: McKinsey & Company

How companies are marketing online:

  • A McKinsey global survey of marketers shows that companies are using digital tools-from Web sites to wikis-most extensively for customer service, least in pricing. Two-thirds are using digital tools for product development, almost as many as are advertising online.
  • Respondents consider online ads to be as useful for brand building as for direct response. Spending is expected to increase on all types of online advertising vehicles over the next three years.
  • In 2010 just over half of all respondents expect their companies to be getting 10 percent or more of their sales from online channels-twice as many companies as have hit that mark today. And 11 percent expect to be spending a majority of their advertising budgets online by then.
  • Most companies today don't integrate their online and offline marketing efforts; companies that use online tools across the full spectrum of marketing activities are much more likely to do so.

Source: McKinsey & Company

More? http://www.mckinseyquarterly.com/Marketing/Digital_M arketing/How_companies_are_marketing_online_A_M cKinsey_Global_Survey_2048

Managing your organization by the evidence

  • Executives, in their search for ways to make organizations function more successfully, frequently adopt simplistic solutions.
  • A new analysis of more than 230 global businesses shows that combinations of carefully selected actions can be far more effective than one- dimensional interventions.
  • Although organizations tend to perform better when they use specific practices to make employees accountable, to set goals and priorities, and to establish a performance culture, they achieve the best results by undertaking all three simultaneously.
  • Companies with a lot of organizational baggage- the legacy, perhaps, of a strong culture or leadership style-may need to modify this "base case."

Source: McKinsey & Company

More? http://www.mckinseyquarterly.com/Organization/Strateg ic_Organization/Managing_your_organization_by_the_ evidence_1829?gp=1

Invitation & Reminder

  • The Josie Johnson Memorial Ride is about cycling safety, awareness by motorists for cyclists on the roads, and the responsibilities that cyclists have to keep themselves safe and free from harm.
  • Please also join with us for a casual ride from Sugar House Park to Hollow Mill Park in Cottonwood Heights.
  • Saturday September 29th
  • 10:30 AM
  • Sugar House Park
  • South Terrace

"Cyclists fare best when they act as and are treated as operators of a motor vehicle."

  • That is a good guide for how to ride, drive, make laws and design roads.
  • "Same Roads, Same Rights, And Same Responsibilities"
  • Safe routes to school:
    • Local streets should be safe enough to ride for kids to ride to school
    • Obesity concerns for youth, physical fitness, make this logical
  • Expansion of striped bike lanes and warning signs for motorists to be aware of cyclists
  • Complete Streets:
    • All new road construction and reconstruction must be done with bicycles in mind: space for lanes and striping must be included.
  • Cyclists have to follow the laws just the same way motorists must:
    • No riding on sidewalks
    • Ride with the flow of traffic, not against traffic
    • Cyclists may ride no more than two abreast AND may ONLY do so when no impeding the follow of traffic on the road.
    • Use lights at night
    • Wear bright clothing when riding to help motorists to see the cyclist.
  • Common respect:
    • Motorists need to respect cyclist's right to be on the road, and
    • Cyclists must respect the rules of the road that govern their use.


  • Other Downtown?
  • Who's #2
  • Who is coming up fast?
  • Management Notes
  • Economic notes
  • This weeks leads

Bob Springmeyer

Bonneville Research

  • Utah Economic Snapshot
  • Economic Snapshot - Twelve Months FY2007

    • Sales and Use Taxes (Gen Gov't) +2.9%
    • Individual Income Taxes (Education) +12.4%
    • Corporate Franchise Taxes (Gen Gov't) +12.5%
    • Motor Fuel Taxes (Transportation) +5.9%
    • Severance Taxes (Gen Gov't) +0.5%

    Source: Utah State Tax Commission, TC-23 Final 9/17/07

  • Economic Notes:
    • International Business Confidence
    • Global business confidence held steady last week, but at a very low level. After plunging in August, sentiment remains consistent with an economy that is very near recession. Assessments of present conditions and expectations regarding the six-month outlook are very negative; both falling again last week. Sales are soft and pricing pressures have evaporated. It is encouraging that while investment and hiring intentions have also weakened, they have held up much better.
    • Risk of Recession
    • The Moody's Economy.com probability of recession rose sharply in August, reflecting the turmoil in global financial markets. In August, the probability of recession jumped to 40%, up from July's 15% and its highest since 2001. The risks to the U.S. economy increased appreciably in August led by tighter credit conditions, rising mortgage delinquencies, turbulence in global financial markets and weakening housing markets.
    • Treasury International Capital Flows
    • Net long-term TIC flows dropped to $19.2 billion in July, compared to $97.3 billion in June.
    • ABC News/Washington Post Consumer Comfort Index
    • The ABC News/Washington Post consumer comfort index inched slightly higher to -15 in the week ending September 16. The headline index has only recovered a small portion of its mid-August dive. The details of the latest report were mixed with the economic and personal finances components improving over the week. On the other hand, the buying climate fell four points. While improving, consumer sentiment remains fragile, but today's decision by the Fed to cut interest rates may help over the next few weeks.
    • Federal Open Market Committee
    • The FOMC lowered the federal funds rate by 50 basis points to 4.75%, and also lowered the discount rate by 50 basis points, to 5.25%. The committee cited tighter credit conditions that are weighing on the housing market and the broad economy. The committee also noted greater uncertainty since their last meeting in early August. The FOMC did say that inflation does remain a concern, however. With today's statement, further rate cuts remain a possibility. The decisions to lower the fed funds and discount rates were unanimous.
    • PPI
    • Producer prices for finished goods fell by 1.4% in August, due primarily to price declines among finished energy products. Excluding food and energy, core prices for finished goods rose by 0.2%, in line with expectations. Energy prices fell sharply at all levels of processing.
    • CPI
    • The seasonally adjusted consumer price index fell 0.1% in August, after increasing 0.1% in July and 0.2% in June. A key contributor to this decline in consumer prices was the energy component, which fell 3.2% in August-its third consecutive month of decline. The core index, which excludes food and energy prices, increased by 0.2% in August, after increasing 0.2% in both June and July. Over the past year, core CPI inflation has run at a 2.1% rate, compared to 2.2% in the previous two months. The readings were in line with consensus expectations.
    • The Conference Board Leading Indicators
    • The Conference Board index of leading indicators fell 0.6% in August, the largest decline since the post- Katrina 0.8% drop-off in September 2005. An upward revision to July, from 0.4% to 0.7%, leaves the leading index little changed over the past two months.
    • State Personal Income
    • U.S. personal income rose 1.2% in the second quarter of 2007 and 6.4% over the year. First quarter income growth was revised up to 2.5% from the previously-published 2.2%. The first quarter figures reflected bonus payments in the financial services industry, which hit a record last year. All regions of the country saw personal income growth slow over the quarter.
    • New Residential Construction (C20)
    • Housing starts decreased 2.6% to 1.367 million units in August, slightly above Moody's Economy.com estimates. Housing permits decreased 5.9% during the month. Expect the market to remain soft throughout the year, even with the FOMC lowering the fed funds rate target by 50 basis points.
    • MBA Mortgage Applications Survey
    • Mortgage demand increased 2.4% in the week ending September 14. Purchase applications increased 0.9% and refinance applications increased 4.6%. The increase in refinance applications is expected with the negative fixed-to-adjustable mortgage rate spread.
    • NAHB Housing Market Index
    • Homebuilders' view of housing conditions continue to slide, with the NAHB's Housing Market Index declining by two points to 20, the lowest reading since the beginning of 1991. The housing market's correction is nowhere near over.
    • Chain Store Sales
    • Chain store sales fell 1.1% in the week ending September 15, more than reversing the gains of the previous four weeks. However, year-over-year growth held steady at 2.9% as comparisons eased significantly and the ICSC described the sales performance as mixed.
    • Oil and Gas Inventories
    • Crude oil inventories fell by an outsized 3.8 million barrels for the week ending September 14, according to the Energy Information Administration, below expectations of a 1.5 million barrel draw. Gasoline inventories rose modestly by 0.4 million barrels, beating expectations. Refinery activity disappointed again, falling from 90.5% to 89.6%, below expectations. Distillate supplies rose by 1.5 million barrels, above expectations. This report is bullish.
    • Weekly Natural Gas Storage Report
    • Underground storage of natural gas increased by 63 billion cubic feet during the week ending September 20. This figure came in slightly below expectations. Inventories currently stand 8.2% above the five-year average. This report will have a slightly bullish influence on prices.

    Source: Economy.com, Financial Times 2007

  • Come Ride With Us!
  • This Weeks Leads
    • Krikorian Premiere Theaters
    • Krikorian Premiere Theaters, LLC trades as Krikorian Premiere Theaters.
    • The eight-unit chain operates locations throughout CA.
    • The movie theaters occupy spaces of 40,000 sq.ft. to 120,000 sq.ft. in freestanding locations and malls, as well as entertainment, mixed-use and power centers, in addition to urban/downtown areas.
    • Plans call for two to three openings nationwide during the coming 18 months.
    • Typical leases run 30 years with options.
    • A vanilla shell and specific improvements are required.
    • Preferred demographics include a population of 100,000 within three miles earning $50,000 as the average household income. Send site submittals to:
      • George Krikorian,
      • Krikorian Premiere Theaters, LLC,
      • 2275 West 190th Street, Suite 201,
      • Torrance, CA 90504;
      • Web site: www.kptmovies.com
    • Cinnabon
    • The dessert shops occupy spaces of 200 sq.ft. to 600 sq.ft. in malls, entertainment and lifestyle centers.
    • Plans call for 75 openings nationwide during the coming 18 months.
    • Typical leases run 10 years.
    • A vanilla shell and specific improvements are required.
    • Preferred cotenants include Dillards and Sears.
    • Preferred demographics include a population of 50,000 within three miles earning $60,000 as the average household income.
    • For more information, contact
      • Mark Whittle,
      • Focus Brands,
      • 200 Glenridge Point Parkway,
      • Atlanta, GA 30342;
      • Web site: www.focusbrands.com.
    • Valvoline Instant Oil Change
    • Ashland, Inc. trades as Valvoline Instant Oil Change.
    • The 825-unit chain operates locations nationwide.
    • The automotive service centers occupy spaces of 1,900 sq.ft. to 2,500 sq.ft. in freestanding locations and mixed-use and power centers.
    • Growth opportunities are sought throughout the existing markets during the coming 18 months.
    • Typical leases run 25 years.
    • Preferred cotenants include Kroger and Target. Major competitors include Jiffy Lube.
    • A land area of 30,000 sq.ft. is required for freestanding units.
    • Send site submittals to:
      • Dennis Hill,
      • Ashland, Inc.,
      • 3499 Blazer Parkway,
      • Lexington, KY 40509.
    • Popeye's Chicken & Biscuits
    • Popeye's Chicken & Biscuits operates 1,870 locations nationwide and internationally.
    • The fast food restaurants occupy spaces of 2,000 sq.ft. to 3,000 sq.ft. in freestanding locations and inline centers.
    • Growth opportunities are sought nationwide during the coming 18 months.
    • Send site submittals to:
      • Bill Easterling,
      • Popeye's Chicken & Biscuits,
      • 5555 Glen Ridge
      • Connector Northeast, Suite 300,
      • Atlanta, GA 30342.
    • Solstice
    • Solstice, a 110-unit chain, operates locations nationwide.
    • The stores, offering high-end designers sunglasses, occupy spaces of 800 sq.ft. to 1,200 sq.ft. in malls, lifestyle centers and urban/downtown areas.
    • Plans call for 40 openings nationwide during the coming 18 months, with representation by Robert K. Futterman & Associates.
    • Send site submittals to:
      • Robert Draizen,
      • c/o Robert K. Futterman & Associates,
      • 521 Fifth Avenue, 7th Floor,
      • New York, NY 10175;
      • Web site: www.rkf.com
    • Flowerama of America
    • Flowerama of America, Inc. trades as Flowerama of America.
    • The 100-unit chain operates locations nationwide in 28 states.
    • The florist centers, offering fresh flowers, gift items, accessories and houseplants, occupy spaces of 1,200 sq.ft. to 3,000 sq.ft. in freestanding locations.
    • Plans call for 15 to 20 openings throughout the existing markets during the coming 18 months.
    • Typical leases run five years with three, five-year options.
      • Chuck Nygren,
      • Flowerama of America, Inc.,
      • 3165 West Airline Highway,
      • Waterloo, IA 50703;
      • Web site: www.flowerama.com
    • Johnston & Murphy, Journeys and Journey Kidz
    • Genesco, Inc. trades as Johnston & Murphy, Journeys and Journey Kidz. Johnston & Murphy operates 154 locations nationwide.
    • The stores, offering upscale men's shoes and accessories, occupy spaces of 1,500 sq.ft. to 2,500 sq.ft. in malls, lifestyle centers, airports and urban/downtown areas.
    • Plans call for 18 openings throughout the existing markets during the coming 18 months.
    • Typical leases run 10 years.
    • Preferred cotenants include Banana Republic, Brooks Brothers and Jos. A. Bank. Journeys operates 800 locations nationwide.
    • The shoe stores occupy spaces of 1,500 sq.ft. to 3,000 sq.ft. in malls, lifestyle, outlet and value centers.
    • Plans call for 75 openings throughout the existing markets during the coming 18 months.
    • Preferred cotenants include Aeropostale, American Eagle, Pacific Sunwear and Zumiez. Journey Kidz operates 90 locations nationwide.
    • The children's shoe stores occupy spaces of 1,200 sq.ft. to 1,600 sq.ft. in malls.
    • Plans call for 80 openings throughout the existing markets during the coming 18 months.
    • Preferred cotenants include Build-A-Bear, Children's Place and Gap Kids. Send site submittals to:
      • David Stuck,
      • Genesco, Inc.,
      • 1415 Murfreesboro Road, Suite 606,
      • Nashville, TN 37217;
      • Web site: www.genesco.com
    • Rib Crib BBQ & Grill
    • The Rib Crib BBQ, Inc. trades as Rib Crib BBQ & Grill at 43 locations throughout AR, KS, MO, MT, NM, OK and TX.
    • The casual BBQ restaurants occupy spaces of 4,000 sq.ft. to 6,000 sq.ft. in freestanding locations, endcaps and lifestyle, power and strip centers.
    • Plans call for three to five openings throughout the central region during the coming 18 months. Typical leases run 10 years.
    • Preferred cotenants include Home Depot, Lowes, Target and Wal*Mart.
    • Preferred demographics include a population of 25,000 within three miles.
    • A land area of 1.1 acres is required.
    • The company prefers to locate in established areas or high-energy new developments.
    • Send site submittals to: contact
      • Seth Nimmo,
      • The Rib Crib BBQ, Inc.,
      • 4535 South Harvard Avenue,
      • Tulsa, OK 74135-2905,
      • Web site: www.ribcrib.com.

  • Josie Johnson Memorial Ride 2007
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