Outlets Park City is struggling, according to a group looking to redevelop part of the site.
The outdoor mall in Kimball Junction, featuring upscale and popular brands, saw sales drop nearly 1/3 between 2019 and 2020, according to a letter sent to the Snyderville Basin Planning Commission from the attorney representing the redevelopment group. Occupancy is slipping, as retailers, many struggling with their own bankruptcies, are vacating the area, the letter contends.
“Enter Harmon’s,” the letter says. “With a large, loyal following, and interest in taking down 60,000 square feet of space, Harmon’s will serve as a new anchor tenant and be the foundation for the Outlets.”
That is, if the plan survives the county’s approval process.
The Planning Commission on Tuesday heard from the team pursuing the project, including the Chicago-based ownership group that bought Outlets Park City in 2019 and the chairman of the Harmons grocery chain, which has several locations along the Wasatch Front and elsewhere in Utah.
“We’ve been actively prospecting sites in and around Summit County for many years now,” said Bob Harmon, Harmons chairman. “We’d be ecstatic to be a part of your community.”
The plan is to demolish what the ownership group says is a 30-year-old building at the southern end of the larger horseshoe of buildings and build a new similarly sized building for the grocery store nearby.
Planning commissioners appeared to support the idea, with Commissioner Ryan Dickey praising the Harmons in Santa Clara, which resembles this proposal.
“I think I’d say it’s the best grocery store I’ve ever been to,” he said.
He noted, however, that the commission wouldn’t be approving the Harmons itself, but rather the right to build the project described.
“We’re approving a use. That use could be Harmons today, it could be something else tomorrow,” he said.
Commissioner Bruce Carmichael asked whether the project would lead to a net increase in jobs, which the redevelopment team was not able to answer. The proposal would add the grocery store but demolish several existing storefronts.
Dickey also commented on the proposal’s impact on the local workforce. There are four existing grocery stores within 2 miles of the project site, including the nearly adjacent Walmart and Whole Foods Market, Smith’s Food and Drug across S.R. 224 and the large Fresh Market in Pinebrook, a 5-minute drive away.
“To the extent we benefit this retail project with a successful Harmons, we’ll probably lose one of the others,” Dickey said, though he noted it was not the commission’s responsibility to consider the store’s potential economic impact.
Commissioner Chris Conabee indicated he supported the project, saying he had recently driven past a vacant outlet mall in Colorado that was at least as big as Outlets Park City and that he supported efforts to redevelop the area.
The letter from the attorney representing the redevelopment group, Justin Keys, painted a bleak picture of the future for Outlets Park City, describing online shopping trends that have hurt the retail industry as accelerating during the pandemic.
“The former playbook for retail is simply not working, and the Outlets are a victim of that shift in retail preferences,” the letter states.
The letter says these trends are not temporary.
“Over the last two years alone, more than 75,000 square feet of retailers (involving mostly tenants that have filed for bankruptcy) have vacated the property. As a result, the Outlets historical occupancy has decreased from over 95% to just below 80% percent occupied currently,” the letter states.
The redevelopment group described Harmons as a potential anchor tenant that could drive foot traffic to the other shops and tie in to the proposed residential development at the Tech Center site.
Though Tuesday’s meeting was a work session and no decisions were reached, the documents submitted by the team appeared advanced and included details down to the orientation of the aisles and the location of a cheese island.
One aspect of the plan, a proposed 16,500-square-foot mezzanine, is likely to draw further scrutiny.
It would include a burger stand and tap room, a large seating area and office space with room for cooking classes, according to a memo from an architect of the project.
Mezzanines in other Harmons stores include tables and chairs, free internet access and even a post office.
The county’s development code requires mezzanine square footage be included in the total, making this proposal an increase in density.
The developer contends the building’s footprint is the same — roughly 60,000 square feet, slightly smaller than the Smith’s Market at Kimball Junction — so the plan doesn’t count as a new entitlement. That’s an important claim, because a provision in the Snyderville Basin General Plan prohibits new entitlements unless a project provides a “compelling countervailing public interest” that cannot be reasonably achieved another way.
That could trigger the need to provide significant “public benefits” to secure approval. In other projects, those have generally been affordable housing units, but officials have indicated other proposals like exceptional sustainability efforts or open space could satisfy the requirement.
Keys said that the group was open to removing the mezzanine proposal and submitting a project that would include only the current square footage.
He said the group would take into account the Planning Commission’s recommendations and return in a few months.