LDS church announcing downtown plans tonight!
 

http://www.ksl.com/?nid=148&sid=536868

I am very excited to hear about this. $2 billion cost- this should be cool.

I agree that it will be really nice, especially if there is an 18 hole golf course. :)

I love what they are proposing. This is exactly what downtown needed. Couple this with an arts district, and SLC rapidly becomes a fantastic destination city.

The only 2 changes I would recommend are:

1. Bury Trax on the portion of Main Street between the two malls. It would cost a fortune and disrupt Trax service for some time. Nevertheless, it would be fantastic for the city when completed. Make Main Street a green park with outdoor dining and quaint shops. A free-flow of pedestrian traffic on that street could only be good for the area. Nobody really drives down Main Street anyways for that part of it. It is too burdened with traffic lights, Trax and people already.

2. I would propose an international center. The state and city could get together and set aside a few blocks of land (which they would have to purchase) for the development of my international center. It could have high rises for businesses conducting international business, a downtown international center campus for BYU or Utah (with a foreign exchange program), an international arts and culture museum or something similar, etc. The city and state could subsidize some of the costs of imaginative businesses and individuals through tax credits or other means. SLC is uniquely positioned to be an international capital. It has foreign language skills and foreign experience rivaled by few other cities in the world. We should take advantage of that.

I like your idea about TRAX, though I don't see it happening for the reasons you stated - expense and disrupted service.

As for an international center, that's also a good idea. SLC is already starting to see the beginning of a Little Italy at about 300 S and 300 W with a number of Italian restaraunts and a great deli (Caputo's). I go down there every so often to brush up on my Italian and have some great food.

I once heard that there are more languages spoken in SLC than any other city in the country. That doesn't surprise me at all with the missionary program.

Yeah, a very cool website. It is amazing to see how much is happening in SLC right now.

I submitted by suggestions, which I am sure have already been lost in the mounds of other suggestions received.

BTW- check out the area to be demolished. This is a massive project.

http://deseretnews.com/dn/view/0,1249,650195930,00.html

I like that the mall appears will have a clear awning.

Ishtar

I think that will be great for Downtown Salt Lake. Nobody wants downtown SLC to end up like downtown Ogden... well, except Fus maybe.

Seriously, this seems very strange to me. Spend $2 billion to attract heathens to Mecca, surrounding the sanctum sanctorum with all the glitz and latest trappings of popular Western culture--fancy hand bag shops, multi-plexes, sushi bars, bars. It sums up LDS culture's myriad contraditions. It actually reminds me of some ill-fated Soviet initiative in Siberia. Whatever, it's your tithing dollars at work.

LOL. Classic.

For what it's worth, they claim that no tithing dollars will be used.

Right. Fuzzy numbers.

Well, Crossroads mall is already there... if your choice is to make the city nicer, add green space, jobs, and housing to the area or keep the status quo, I'd go with the change. And if the church can pay for it without tax dollars, even better.

Where are they getting the money?

The church has billions in liquid money that does not come from tithing? That's a crazy amount of money. Wish the books were more open.

Okay, sorry to sound a discouraging note, but why should the Church spend that much money to spruce up downtown SLC?

How does that benefit Church membership, especially outside Utah? We could use that much to set up a university in Latin America or to really jump start research at BYU.

Whether tithing or other monies are used is irrelevant. If it's not tithing, then tithing will be used for other purposes to which this largesse of "nontithing" could be otherwise used. The Church is not that wealthy that Two Billion is insignificant. Count me in as perhaps the only card carring member who doesn't think this is a great investment for the Church and its members at large.

I will never reside in Utah and what goes on at HQ doesn't benefit anybody I know.

$2 billion would put BYU in the top ten in endowment size.

I am assuming they feel that if downtown is protected, than the headquarters of the church will always be protected.

It's great for the city, and potentially could be great for the church as they could receive a significant return on their investment, but I could see how it doesn't make much sense for an out of stater.

Two billion dollars cash is a lot of scrilla, makes you wonder how much money the church has and what exactly is the value of the church. The membership is not growing as fast as they claim, Mormons aren't richer than the average American, Utah isn't a center of commerce, I can only assume that outside business ventures of the church are highly successful.

I do find it ironic the church is developing a 'progressive community' as that is what it appears it will turn into.

Are you saying that this development will be a gargantuan flop?

Not a dime is coming from tithing per President Hinckley in his closing address on Saturday's Conference.

The church has wealth beyond our comprehension. I mean look at the church's assets in real estate alone. Think of the properties in Hawaii, Hong Kong, DC, Europe, etc.

I like the idea of green space on Main and removing the street for auto access and strictly with a stop for Trax. That seems like a nice buffer between the temple grounds and the new construction of Babylonia. I don't think it's that big a contradiction in terms of the idea of industry that has always been central to Mormon belief and culture. Although I think Nordstroms and Macy's may be perverting that a bit.

Something is needed though. Downtown is dead. I wish someone could redevelop the entire area north of temple square by West HS extending from I-15 to the avenues. I wonder how they keep transients away from the new project. Or do they keep letting them set up camp during the day Pioneer Park? It's a sad sight to behold.

Just as surfah has said, the church has money everywhere. Besides all the land that has temples, church houses, etc...there is double that in land that doesn't have anything on that and is simply waiting to do something with it like putting up more churches, temples, etc. On top of that, the church has thousands and thousands of acres of land that is being used for dairies, agriculture, etc.

The church comes off looking really good in regards to 'spending' this money...but the church fully expects to make quite a bit of money over the next 20-30 years thru leases, etc. to make up that cost. Generous by the church initially, but the church will do well in getting its return especially when you figure that there will be over 120 stores paying rent every month (and most likely, an expensive lease for each of these businesses) along with the housing units, etc.

You have this development project to go along with Gateway, the new library, the Delta Center, Trax, the Bees stadium and the capitol and you have some good things going on downtown.

You may be correct as the entire project as not been presented to me, even in an executive summary form.

I do know a little about Church finances, and although the Church has positive cash flow, it's not wealthy beyond imagination. Most of its assets do NOT produce income but rather require cash to sustain them. Some of you are characterizing the Church as possessing untold wealth, richer than kings and kingdoms. Not true, the Church must continue ot operate under sound fiscal principles and a series of bad financial decisions could severely hurt the Church.

Back to my Soviet analogy. This really is a planned economy type of thing. Typically, successful developers respond to an instinct for when and where a commercial project will return a profit. Ideally, they build it with borrowed money, lease it up, ideally when it's on the drawing board given the complexity and expense of TI's such as multi-plex and restaurant fixtures, which need to be amortized in the leases. Then because they don't want to be landlords (not their specialty), they'll sell the project to real estate investment trusts and other institutions who want a steady return on something solid. In this sceario the banks are re-paid in cash after earning a good return and everyone is happy, most of all the developer who made a killing. (As a class I've found real estate developers to be kind of crass, unrefined, and flim flam, which to me gives rise to a sublime irony that our great, majestic cities--the pillars of our great culture--are the brain children of these folks. I love capitalism and its manifold ironies.)

When things go wrong, however, the developer has to go through the agony of bankruptry, foreclosure, loss of credit rating, etc. Yes, he may have a corporation to hide behind, but more times than not the bank wants a personal guarantee, and even when protected by the corporate veil he emerges with his reputation in tatters and cannot be spared the agony of protracted litigation. It's a tough, risky business, and when developers get extremely rich, as they sometimes do, it's probably well earned.

My points are: First, no, the Church doesn't have $2 billion cash lying around; it's borrowing the money, and tithing won't be tapped into only if the commercial project is successful. Second, you can't make these types of projects successful just by throwing money at them. I've seen plenty of gleaming, empty, drafty malls in places like Oklahoma, Texas and Alaska where the developers guessed wrong and got killed or came too late and got crushed at the door when the economy softened (is that other mall at Second South going to take this lying down? Seems there's a lot of competition). The Church seems to be acting like local government here. Yes, there are examples such as the Riverwalk in San Antonio, downtown Baltimore and many others where the city injected resources and helped to make a dismal area bloom. But invariably it's a delicate marrying of private enterprise and risk taking and public incentivizing that makes it work.

Hoya and others here know the actual facts; I don't. Who will be the tennants? Most important, who are the anchor tennants? Is the Church selling municipal backed bonds? (ACLU, are you listening?) Is there a commercial lender? Is the temple being pledged as collateral? (This is giving me an idea for a great comic novel spoofing LDS utah culture.) Has anybody seen their pro formas, cash flow projections? Are their assumptions realistic? If law firms were publically traded I think James Cramer would be issuing a buy recomendation for the ones in SLC. Consturction contractors are notorious litigation predators. It will be interesting to see this unfold.

The website I provided earlier shows the anchor tenants.

Yes.

Perhaps I am overstating the wealth. It's not Catholic wealthy. But in perspective, as a small church not even 200 years old it's gross income would certainly thrust the church into the Fortune 500.

You're correct that the Church must continue to use fiscal wisdom in its investments, but that applies to any company no matter their cash flow. Positive cash flow means little when companies like Google and Yahoo can catapult up the Fortune 500. And on the other side of things look at the companies who have fallen out of the Fortune 500. AT&T for example went from in the top tier to out of the list in a single year I believe.

It's too bad that Real Salt Lake wouldn't build their soccer stadium downtown.

the church has a lot more money than you think. As a financial clerk of a small poorer ward I was very surprised how much money in tithing the church gets. Even when I was a financial clerk for student singles ward at the U the tithing was around 4k a week. If we say that is the average for all the wards in the world (~30,000) we get about 6.4 billion a year in tithing.

No, I do agree that the church doesn't not have liquid money coming out of their ears. A lot of church property is taken up with its buildings, etc. that do eat money (though that is also tithing payed for)...but the church does have a lot of money in land development (thru ag, dairy, etc.) that do generate some cash.

The church also has some significant money in investments that they can access though they rarely do. This project is not a humanitarian project...they are doing it to preserve downtown SLC (temple square, etc.) as well as to recoup and make money. And as SLC continues to grow, the church is 'risking' a 1.5 billion dollar investment...but it is a project that the church fully intends to recoup the majority of its costs.

I was under the assumption the church is not borrowing any money for this project, is that wrong?

If they aren't, that is a lot of liquid money the church has, a lot more than I ever imagined the church had.

The businesses involved, are they going to be held to higher standards?

For example:

Will 'Buckle' be able to sell slut clothing?

Will 'Chili's' be able to sell alcohol?

Will 'Nordstroms' be able to open on Sunday?

Is the church leasing the property or selling the units? If they sell, how do they ensure that the businesses maintain certain standards?

Man I'm being excoriated just for asking a question on CB.

http://www.cougarboard.com/noframes/...tml?id=2151464

I have no opinion on how rich the church is. I don't know how anybody not in the highest levels of leadership could. I assume, as Archea said, it must adhere to sound financial decision-making.

But gross revenues are meaningless. Ford MC's revenues are a great deal higher than 6.4 billion and it's going broke. As Archea noted, the great majority of the Church's assets are not income producing. I also assume that until now the Church's investments have been pretty risk-free and stodgy--low reliable return. This I would put more in the high flying category.

I would argue with you Seattle on your assumption that the majority of the church's land is not revenue producing. The church owns a whole lot more land than the land that is being used for temples and churches.

In terms of investment returns...I also understand that the church is not risky with its investments but is not 'risk-free' with it either. The church does pretty well with many of its investments.

Without disclosing too much, a relative of mine was intimately familiar from one of these, I insert them for ambiguity, (a) the investment arm, or (b) the retirement arm, and the relative stated, that this relative, including one this relative's co-workers, strongly disagreed with the investment angles taken. Now whether those have proven good or bad I have not followed up on.

Point is there are a myriad of investment tacks a person can take, and many of them are bad. Investments are also difficult, even for the very informed, so any risky investment a la a real estate venture, concerns me.

What are their costs? the ward budget? building new buildings? They can't be that much

The church brings in $6B a year in tithing. This is more than they need to sustain operations. They have a surplus every year. How much? That's not made public and there's a lot of fuzzy accounting that makes it difficult to ascertain. Let's assume it's 10%. Over ten years that amounts to $6B in just the base. After a period of decades of this kind of surplus and invested wisely and conservatively like the church does, you end up with a ton of assets.

The church has more money than they know what to do with. What to do with this surplus is becoming almost as big of a problem as it would be trying to figure out how to stay afloat in hard times. Dropping some money on these kinds of projects is not that big of a deal for the church.

They're dropping $2B. I'm sure they'll put up some of that cash upfront. I'm sure part of the $2B will never be spent--costs they'll never incur such as cost of the land. I imagine they will have some of it financed. Developers or large tenants will front some of it.

Out of a $2B, the church could afford to lose all of it. But they won't. They'll make money off it. And if they do lose money it will be to the tune of $200M or so max, which is pocket change for the church. $200M is 3% of church's tithing intake and who knows what % of business operations. Spread out over a few years, that loss is pocket change.

The church can always say tithing money is not spent on something because they make enough money off business operations or receive other donations, that they can move the money around to make it so that it's not technically funded by tithing. But that shouldn't mean anything to anybody.

The church has access to X dollars. Church wants to use X dollars to conduct the business of the kingdom of God, which includes building temples, building City Creek development, and running BYU football. They'll use tithing to cover the tithing-appropriate ventures, and business operations money and other donations to cover the rest. If City Creek and BYU football don't turn a profit it cuts into how much good the church can do with tithing. Don't fool yourself to believe the fact that BYU football or City Creek is not using "tithing" money that it actually means anything.

If you think this is a financial risk for the church, you just don't understand the church's finances and how a development like this is operated.

If it is tithing dollars at work (and I believe it isn't)...

Tithing going to the Y vs Tithing helping downtown...

i'm okay with that.

Right, IMO, even if it IS tithing dollars at work to fix this, I do not feel that this is a terrible decision.

Giving back to the community, especially the community that houses the majority of the members, as well as improves the area around the central hub of the church is not a bad thing, IMO.

I wouldn't call MRD's estimate scientific.

neither would i

See all that money should go to BYU and BYU football. Just think what sort of nonMormon coaching greats we could hire for that sort of money.