Is Salt Lake City becoming a dining and entertainment destination? New report outlines its growth

SALT LAKE CITY — Downtown Salt Lake City continues to grow in size and population, as several new skyscrapers have sprouted from the ground and are now reshaping the city’s skyline as construction teams work to finish them.

But that’s not the only thing growing. Along with an uptick in population, city government and business leaders say Salt Lake City is quickly becoming a destination for shopping, dining, bars and entertainment. In fact, visitors accounted for about 61% of the 16.6 million people who came to downtown last year, according to the 2023 Downtown Economic Benchmark Report that the Salt Lake City Downtown Alliance published Thursday.

Other key highlights in the report include:

• Hotels within the Salt Lake “convention district” are on pace to have 1.85 million hotel room nights purchased, which would be a 15% increase from last year.
• Visitors are on pace to spend $4.5 billion throughout the county.
• Downtown retail sales soared back to about $2.33 billion in 2022, up nearly 12% from the previous year and 44% from 2020. It’s also up 8% from 2019, showing how the city is rebounding from the COVID-19 pandemic.

“Downtown is not just the seat of Utah’s government, it’s the seat of commerce, of culture, of sports and entertainment,” said Derek Miller, president and CEO of the Salt Lake Chamber and Downtown Alliance.

How downtown Salt Lake City is changing

Thursday’s report continues to show how Salt Lake City is evolving out of the pandemic, reaffirming that the social economy is driving downtown visits more than the old leader, downtown offices.

“We’re the capital city of the fast-growing state in the nation and the momentum here is palpable,” said Salt Lake City Mayor Erin Mendenhall. “Our downtown is literally rising but in so many different ways.”

The report points to University of Toronto data that found activity in Salt Lake City’s downtown area this winter ended up at 139% of pre-pandemic levels. Newly released data shows that activity remained at 139% during the spring, as well. It remains at the top of the 63 North American cities that the university is tracking.

Dee Brewer, executive director of the Downtown Alliance, explains that the data is based on unique mobile phones that stay in the area for at least 90 minutes. The Downtown Alliance determined that 6 out of 10 people in the downtown area were visitors last year when they subtracted trends that indicated someone either lived or worked in the downtown area.

The organization dissected the information further, picking apart the top 25 busiest days in 2022. It found that events and conventions appeared to be the biggest reason for these visits. The Delta Center held some sort of event during 19 of these days and conventions were happening during 18 of the days. There were eight or more arts and entertainment events happening downtown during 12 of the days.

It could become even more of a sports-centric city in the future. Mendenhall referenced Big League Utah’s push to bring a Major League Baseball team and Utah Jazz owner Ryan Smith’s efforts to bring an NHL team to Salt Lake City during the Downtown Alliance’s annual “State of Downtown” event Thursday. That’s on top of the city’s bid to bring back the Winter Olympics.

But the downtown’s food and shopping scene is growing, too. It now holds more than 160 restaurants, bars and shops. There are also about 100 arts and entertainment productions held every month, the report states.

“Sports, arts and entertainment are driving visitation and they’re making downtown an attractive place to live and work,” Brewer said, as he presented the report during the event.

The report acknowledges that the downtown area’s population is still on track to double by 2025, from about 5,000 to 10,000, as downtown becomes increasingly residential. Thursday’s event honored the team who put together the Aster, a new affordable housing complex downtown. It’s one of a few new residential complexes that have opened in recent years.

There are a handful of others on the way, including Astra Tower, which will be the state’s tallest building when it’s completed next year. The new report outlines six other skyscrapers that are “in the pipeline.” Of those, five are slated to include some form of residential use, while only one is solely a hotel and another has some office space.

Brewer believes having so many new residential spaces either online or in the works is beneficial when considering the growth of the city’s social economy.

“(The residential growth) is going to change the experience for many people downtown,” he said.

That’s not to say that the COVID-19 pandemic killed the office building. The report finds that Class A office spaces — the city’s newer office buildings like 111 Main or 95 State — are faring well. The overall vacancy rate in office buildings was only about 18% in June.

Class B office spaces — the less-sleek older offices — are lagging a bit, though. Occupancy in these dropped from 90% at the end of 2019 to about 76% at the end of 2022.

Some developers are now looking to transform these spaces into residential areas. For example, the development company Hines unveiled a plan last year to turn the 24-story South Temple Tower into a 221-unit apartment complex to open in 2024.

Balancing constraints and opportunities

There are some other constraints in the way, which were brought up Thursday.

The report states that both residential and office rental rates are on the rise. The Council For Community and Economic Research gave Salt Lake City a cost of living index score of 108.3, which was significantly better than the scores for Los Angeles (150.9) or Seattle (143.9) among Western cities, but it’s also 8.3 points above the national average.

The average rate for a two-bedroom apartment is up to $2,065, the report adds. It’s better than Austin, Texas, Los Angeles, Seattle or Denver, all of which are listed between $2,600 and $4,100, but it exceeds Phoenix and Las Vegas, listed at $1,720 and $951, respectively.

While there is a large citywide effort to address affordable housing, the growing costs in and around Salt Lake City are spilling over into other issues. Lloyd Allen, the chairman of the Downtown Alliance advisory board, pointed out that Utah’s homeless population grew by 10% in 2022.

“That manifests most acutely in Salt Lake City,” he said.

City, county and state leaders are still exploring ways to address the rising homelessness.

Allen said the Downtown Alliance will begin a new “supplemental trash removal” program to address concerns made about litter. This will be extended out to places by North Temple, Ballpark and Central City, as the city’s Downtown Ambassadors team is expanded to serve those areas in the future. The team was created to refer people to various services, including resources to help those who are experiencing homelessness.

Meanwhile, the new report says construction costs are up 5.43% from the start of 2022 and the start of 2023. Interest rates also rose from 7% to 10% across the same time span. That makes it harder to complete projects that can help reduce these types of costs.

There are also plenty of other growing pains. The ongoing work to replace gas lines and repair the roadway on 200 South is now creeping into downtown, causing all sorts of headaches for residents, visitors and business owners.

“I know road construction is frustrating, but we also know that we will be better off once it’s done,” Mendenhall said. “It will allow us to move more freely and be able to accommodate the growth that is yet to come.”

Despite these challenges, city leaders say they see all sorts of downtown opportunities as the city grows, arguing that all the new developments can help attract new business and employers attract and retain employees.

They also outlined a vision of downtown Salt Lake City as an entertainment district, where people can walk from a business or two to an event happening in the area. That could include an all-pedestrian promenade on Main Street and a “green loop” of park space that surrounds the downtown core.

It has the potential to make Salt Lake City an even bigger destination.

“We’re a city of ideas,” Mendenhall said. “We’re a city of movement, a city with an incredibly bright future.”