City Creek Center in Salt Lake City

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City Creek Center Mall in Salt Lake City

Summary: Members and critics have questions about the Church's involvement in the redevelopment of the city center in Salt Lake.


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City Creek Center in Salt Lake City

Why did the Church get involved in a shopping center?

In early 2003, the Church announced it was purchasing a shopping mall directly south of Temple Square. Because the Church already owned a majority of the land on which the mall was built, this purchase brought the remainder under the Church’s control.[1] The Church did so with the purpose of revitalizing the are directly south of Temple Square because the Church had a “compelling responsibility to protect the environment of the Salt Lake Temple.”[2]

After three years of planning, the Church announced a 20-acre development project called City Creek Center to replace the old shopping mall and several other buildings directly south of Temple Square. The project would be a mixed-use development, which included retail, office, and residential space.[3] Mixed-use developments had become prominent in real estate development because this type of development “ensures vitality through activity and diversity. It makes areas safer. It also reduces the need to travel, making people less reliant on cars, bringing welcome environmental benefits.”[4] All of these objectives are interests of the Church, especially in the environment around the Salt Lake Temple.

Did the Church use tithing funds to finance the purchases and buildings?

In the April 2003 general conference, President Gordon B. Hinckley explained “tithing funds have not and will not be used to acquire this property. Nor will they be used in developing it for commercial purposes.” Instead, “funds for this have come and will come from those commercial entities owned by the Church. These resources, together with the earnings of invested reserve funds, will accommodate this program.”[5] Multiple statements were subsequently made reinforcing the fact that tithing funds would not and were not used for the development project.[6]

Some claims are made that tithing really was used because some of the money came from earnings on invested reserve funds, which funds were set up using tithing donations. However, financial documents have shown that only earnings on invested funds, not the original funds themselves, were used to finance the development project.[7]

Why would the Church put tithing into investment portfolios?

Some individuals wonder why the Church puts tithing into investments instead of donating to the poor.

President Gordon B. Hinckley explained that saving some tithing funds is a fundamental principle of Church finances:

In the financial operations of the Church, we have observed two basic and fixed principles: One, the Church will live within its means. It will not spend more than it receives. Two, a fixed percentage of the income will be set aside to build reserves against what might be called a possible “rainy day.”

For years, the Church has taught its membership the principle of setting aside a reserve of food, as well as money, to take care of emergency needs that might arise. We are only trying to follow the same principle for the Church as a whole.[8]

The tithing set aside as a reserve is added to the Church’s investment funds. Bishop Gerald Causse explained the reason for putting saved tithing funds into investments instead of simply holding the tithing in cash or cash equivalents:

In the parable of the talents, the lord who asked for an accounting from his servants chastised the one who had not invested the money entrusted to him but instead had hid that money in the earth. He characterized the servant as “wicked and slothful” for not investing that money for a reasonable financial return. Consistent with this spiritual principle, the Church’s financial reserves are not left idle in nonproductive bank accounts but are instead employed where they can produce a return.[9]

Did the Church achieve its objectives with the City Creek Center project?

Most analysts agree that the City Creek project was successful in revitalizing downtown Salt Lake City:

New York Times[10]
“The center has added 2,000 jobs and brought more than 16 million visitors into downtown,” according to the Economic Benchmark Report of 2013, paid for by the real estate firm CBRE. Taking into account the improving economy, the report credits the mall, at 50 South Main Street, with helping downtown retail sales increase by 36 percent, or $209 million, in 2012. The “mall is the single most important thing to happen to Salt Lake City in 50 years, maybe more,” said Bruce Bingham, a partner with Hamilton Partners, a Chicago-based real estate developer. “It revitalized downtown.”
Salt Lake Tribune[11]
The International Council of Shopping Centers “selected City Creek Center — winner of a number of other awards since its 2012 debut — and the site's co-designer and operator Taubman Centers for its top accolade as "the most outstanding example of shopping center design and development for 2014-2015
"Main Street is thriving and it would not be if City Creek Center had not been built," said Jason Mathis, executive director of the Downtown Alliance, representing downtown merchants. "I attribute a lot of downtown's success to City Creek Center's development and the design."
BuildingSaltLake.com[12]
“According to data from the Downtown Alliance, since City Creek opened, downtown retail sales have increased 46 percent, retail employment increased 83 percent and downtown hotel room bookings grew by 62 percent. The retail center’s presence also contributed to an 119.7 percent rise in retail wages, 26.9 in food service wages and 74.1 percent in hotel wages.”
While there are multiple factors that have led to the current boom downtown, based on the numbers City Creek has played an important role in bringing more development downtown. “This is our best example of a TOD (transportation oriented development),” said Reid Ewing, professor of City and Metropolitan Planning at the University of Utah. Ewing led a study looking at foot traffic downtown after City Creek opened and found that the block of Main Street between South Temple and 100 South had the highest pedestrian activity than any other block downtown. Ewing cited his vibrancy scale that measures vibrancy based on imageability, enclosure, human scale, transparency and complexity as an indicator of the health of downtown, especially near City Creek. “This (City Creek Center) has it all in terms of vibrancy,” said Ewing.

Further reading

City Creek Project

  • The most comprehensive review of the finances involved in the City Creek Center project is available in “Order Granting Motion for Summary Judgment,” James Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, 10 September 2021, U.S. District Court, Central District of California, case 2:21-cv-02504-SVW-SK.

Church Finances


Notes

  1. ↑ "Church to buy Crossroads Plaza mall," Deseret News, 19 March 2003.
  2. ↑ Gordon B. Hinckley, “The Condition of the Church,” April 2003 general conference.
  3. ↑ "Downtown rebound: LDS Church unveils plans for 20-acre development," Deseret News, 4 October 2006.
  4. ↑ Department of the Environment, United Kingdom, 24 July 1995, as cited in A. Coupland, Reclaiming the City: Mixed Use Development (London, E & FN Spon, 1997).
  5. ↑ Gordon B. Hinckley, “The Condition of the Church,” April 2003 general conference.
  6. ↑ A compilation of statements is available on pages 2–3 in “Order Granting Motion for Summary Judgment,” James Huntsman v. Corporation of the President of the Church of Jesus Christ of Latter-Day Saints, 10 September 2021, U.S. District Court, Central District of California, case 2:21-cv-02504-SVW-SK.
  7. ↑ A financial analysis on these redacted documents is available on pages 7–8 in “Order Granting Motion for Summary Judgment.”
  8. ↑ Gordon B. Hinckley, “The State of the Church,” April 1991 general conference.
  9. ↑ Gerald Causse, “The Spiritual Foundations of Church Financial Self-Reliance,” Ensign, July 2018.
  10. ↑ Caitlin Kelly, "Mormon-Backed Mall Breathes Life into Salt Lake City," The New York Times, 9 July 2013.
  11. ↑ Tony Semerad, "City Creek Center: Boon for downtown or one of SLC's 'biggest mistakes'? Salt Lake Tribune, 11 May 2015.
  12. ↑ Isaac Riddle, "City Creek's impact on downtown growth by the numbers," BuildingSaltLake.com, 17 March 2017.

Question: Aren't tithing funds from "long ago" ultimately the source of all current Church funds?

A review of the history of such funds and Church involvement in business suggests that this is not the case

Some have wondered whether tithing funds (even from long ago) aren't the "ultimate" source of the funds used in the redevelopment. A review of the history of such funds and Church involvement in business suggests that this is not the case.

In the first place, it should be remembered that to mix tithing (tax-deductible) funds with taxable funds from other sources would cause major issues with the IRS, something which the Church would be unlikely to risk--both because to do so would be dishonest, and because the legal and public-relations consequences would be severe, even if they were inclined to do so.

The church has a number of for-profit businesses including real estate, ranching and agriculture, media, mercantile, etc. They have carefully invested for over a century in order to have a good financial cushion in order not to be severely in debt as they were in the late 1890s-early 1900s, nor to be on the verge of financial distress as they were in the late 1950s-early 1960s from over-spending building church meeting houses and other church-related ventures and expenditures.

Church and state businesses were all intermingled during the Great Basin period leading up to statehood

In the 19th-century, funds for church and state, church and business, etc., were all intermingled during a good portion of the Great Basin period leading up to statehood. This was because when the Saints arrived in Utah there was no pre-existing community. There was no infrastructure nor corporate entities providing for even the bare essentials of life. Everything had to come from the church and its members. And for the first few decades, none of the church's members were really in a position to invest large capital on projects like roads, bridges, canals, mills, and other necessities. Therefore, the church stepped in and was not only a source of spiritual aid but physical aid as well. Most of the "investment" made by members came in the form of goods and labor, not money deposited into a bank or brokerage account.

The church used what precious funds it could to build infrastructure and provide for the needs of the people. In the process, the church and its leading members created companies like Deseret Bank and Zion's Bank, Deseret Produce Company, Deseret Salt Company, Deseret Telegraph, Deseret Manufacturing Society, Deseret Iron Company, Jordan River Canal Company, Davis Canal and Irrigation Company, Utah Central Railroad, Utah Southern Railroad, Utah Northern Railroad and a host of other companies. Some companies were successful and others were complete failures.

It is simply a cop-out for critics of the Church to simply go back in time until they can equate everything that the Church has to a tithing or offering donation. This does not make President Hinckley a liar.

  • How many of you reading this have ancestors that owned slaves? Does that mean that you must consider slavery acceptable?
  • How many of you have ancestors who were polygamists? Does that mean that you actually must accept polygamy?
  • How many of you have ancestors that paid tithing to the Church? Does that mean that you paid that money?

Members donated time to build infrastructure

Members donated time to build buildings, help build railroads, canals and other projects. Those with money "invested" knowing they would probably see only a partial return. Often, the stocks held by these investors earned pennies to the dollars invested and quite often were eventually turned over to the church as a gift. They were all doing what they could to build up the kingdom. Heber J. Grant, for example, had an insurance company that was sold for a very low price to the church and then combined with another insurance company to create Beneficial Life. Deseret Telegraph was later sold to Western Union. Even the hospitals and universities were originally church-owned and run ventures because they had to be.

So, that is where the original money came from that was then used to invest in more profitable business ventures and later used for projects like City Creek Mall. Some of these ventures became profitable and were sold as the church divested itself of businesses they felt other companies could run. The banks were sold, the hospitals were sold. The Church had originally been given an enormous amount of Union Pacific stock shares as well as rails and rolling stock to pay Brigham Young and other investors, including the Church, for labor building the road beds, etc., in Utah. Eventually the church sold its railroads, built from materials and money that came from Union Pacific, back to Union Pacific and made a good amount of money. That money was, in turn, reinvested in other ventures for later use.

The Church does not mix sacred money with Church investments

Ultimately, the church goes to great length not to mix sacred money with church investments but is constantly trying to use its investments to further the goals of the Church. City Creek Mall was made not to make money (although that has turned out to be a wonderful side-benefit thus far) but to create a place that would draw people back to downtown Salt Lake City. Church leaders were very concerned that downtown Salt Lake City was slowly dying. Stores were closing and the downtown was becoming blighted and unattractive. Church leaders did not want Temple Square and other church buildings to be surrounded by rundown blocks that few people were going to. Therefore, they felt it was worth the investment to build something beautiful and productive that would draw other businesses, restaurants, etc. and keep the blocks surrounding Temple Square vibrant. They seem to have succeeded, and also have provided an economic boon to the region.


Question: How much did the development of the mall cost? Did it really cost 5 billion dollars?

The City Creek Center cost is approximately $1.5 billion dollars

The City Creek Center cost is approximately $1.5 billion, not $5 billion. (The $5 billion figure is popularly used on ex-Mormon message boards)

No tithing funds are invested in the City Creek project. However, those funds that are invested may well pay dividends in the future, as well as providing many benefits to the community and those who live in it.

The motivation for the Church's involvement in the City Creek Center project is described in an extensive interview with Presiding Bishop H. David Burton: "Mormon leaders and Salt Lake City work together to transform land," Deseret News (7 March 2010). Deseret News has more information on the construction and financing (see here).

From the Wikipedia article "City Creek Center": "The City Creek Center is part of an estimated $5 billion sustainable design project to revitalize downtown Salt Lake City. The City Creek Center project itself has been estimated to cost around $1.5 billion." off-site

The "$5 billion" dollar figure refers to the cost of the entire Salt Lake City downtown redevelopment project, referred to as "Downtown Rising." The City Creek Center cost $1.5 Billion. Details about these projects may be viewed at Downtown Rising. Other projects include the following:

  • Utah Performing Arts Center
  • Frank E. Moss Federal Courthouse
  • Six Gateway
  • Questar Corporate Headquarters
  • Jessie Eccles Quinney Center For Dance and Capitol Theatre Renovation
  • Public Safety Building
  • Public Market
  • Convention Center Hotel
  • Utah Theater
  • City Creek
  • Gallivan Plaza
  • Harmons City Creek
  • The Leonardo
  • 222 South Main
  • O.C. Tanner

Question: How does the Church decide where to spend money? Shouldn't they use the money instead to feed the poor and help the needy?

Question: Are LDS standards required by the mall?

The partner developer is not affiliated with the Church, so some venues will be open Sundays and serve alcohol

Some have wondered if the mall will be required to adhere to LDS standards (e.g., no sale of alcohol, no Sunday openings). The City Creek development (which includes other establishments and housing in addition to the mall) is a joint venture between a real estate developer owned by the LDS church and another developer that is not affiliated with the church. It appears that alcohol will be served at some venues, and some venues will be open on Sundays, but that this will only be permitted at venues which are owned by the partner developer, NOT at the venues which are owned by the LDS church's development company. [1]


Question: Since its opening, has the redevelopment had the impact hoped for?

The redevelopment of the downtown has turned out as hoped

As of July 2013, the redevelopment seems to be improving matters as hoped. The New York Times reported:

“The center has added 2,000 jobs and brought more than 16 million visitors into downtown,” according to the Economic Benchmark Report of 2013, paid for by the real estate firm CBRE. Taking into account the improving economy, the report credits the mall, at 50 South Main Street, with helping downtown retail sales increase by 36 percent, or $209 million, in 2012.

The “mall is the single most important thing to happen to Salt Lake City in 50 years, maybe more,” said Bruce Bingham, a partner with Hamilton Partners, a Chicago-based real estate developer. “It revitalized downtown.” [2]

The mall also has, as of July 2013, a 98% occupancy rate, and data suggest that there was a demand for retail space that the mall helped to fill, shifting spending from on-line realtors to the local economy:

Linda Wardell, the general manager of City Creek Center, said the mall had a 98 percent occupancy rate, with 104 stores, seven restaurants and a 1,000-seat food court. “There was a real pent-up demand for shopping in this market,” Ms. Wardell said. “Some people were already buying from these retailers online and they were eager to come here.”

Convention visitors also have been vital to the mall’s success, providing 25 to 35 percent of its sales, she said. The city benefits from year-round visitors to nearby ski resorts, five national parks and, of course, to the Church of Jesus Christ of Latter-day Saints, she said. [3]

The Church's involvement also makes possible a more long-term view that entities concerned only about profit do not have:

Jason Mathis, executive director of Salt Lake City’s Downtown Alliance, a business development group, acknowledged that the church-backed development had drawn a spectrum of opinions.

“In this community,” where about 40 percent of the city’s residents are Mormon, “the L.D.S. is such a powerful large entity, it will be more controversial and evoke strong feelings,” he said. “But they’re an interesting landlord. They’re not worried about the next quarter. They have a much longer perspective than many other investors would have had. They want to know what the city will look like in the next 50 or 100 years.” [4]


Ensign, "News of the Church"

Ensign, (December 2006)
The Church first announced three years ago it was planning to redevelop the downtown area to energize the economy of the city that houses its headquarters and to bolster the area near Temple Square. No tithing funds will be used in the redevelopment.

Click here to view the complete article

Notes

  1. ↑ Chris Vanocur, "Will alcohol be served on Sunday at LDS Church's new City Creek Center?" ABC4.com, Salt Lake City (19 May 2009).
  2. ↑ Caitlin Kelly, "Mormon-Backed Mall Breathes Life into Salt Lake City," The New York Times (9 July 2013).
  3. ↑ Ibid.
  4. ↑ Ibid.
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