Salt Lake City Gives $2M Loan to Company Buying Gateway Building
Salt Lake City's urban-renewal agency intends to loan about $2 million to a company buying property for new headquarters at The Gateway mall.
The Cicero Group, a Utah-based global data-analysis and consulting firm, says it will pay $10 million for a building at 35 N. Rio Grande St. and plans to use city cash to convert part of it into corporate offices.
Co-founder and CEO Randy Shumway said the renovated space will hold about 80 executives, data scientists, engineers and business strategists for the expanding company.
"We're buying it so we don't have to move again for quite some time," Shumway said Wednesday. "We want to stay in Salt Lake City, and we think this is an exciting, vibrant area where professionals are going to want to work and live."
The city's Redevelopment Agency Board approved the low-interest loan unanimously Tuesday — despite concerns the action effectively drains the RDA's pool of available lending funds, at least short term.
The RDA Board, comprised of members of the Salt Lake City Council, said the loan met goals of fostering employment and encouraging economic development. The board also approved up to $100,000 in tax reimbursements for Cicero to be paid from future revenues generated by its project.
Before backing the incentives, board members sought a detailed accounting of the RDA's loan portfolio by next month.
"It's not about them," Councilman James Rogers said of Cicero. "It's about our own internal planning."
Shumway said his company will use $8 million in financing from Zions Bank and $2.2 million of its own equity to buy the Gateway North building.
The city loan, he said, will pay to overhaul the 15-year-old structure with new windows, an exterior face-lift, upgrades to heating and cooling systems and other improvements. The company hopes to move in by summer's end.
According to city documents, Shumway and company co-founder and executive Vice President Trent Kaufman will provide personal loan guarantees.
Founded in 2001, Cicero intends to use about 30,000 square feet of Gateway North and lease the other half to existing retail tenants. Also known as Fielding Group, the company expects its Salt Lake City staff to grow to 120 workers within three years, eventually filling the building.
News of its plans comes as new mall owner Vestar is launching nearly $30 million in capital improvements to The Gateway, which the Phoenix-based company purchased in November.
The open-air shopping center on downtown's western edge has struggled with declining foot traffic and occupancy rates in light of competition from City Creek Center a few blocks east on Main Street.
City Councilman Stan Penfold said he expects Vestar also to approach the RDA for financial aid in revamping The Gateway. But with its loan fund temporarily depleted, he said, the agency may have few options.
Vestar has not stated publicly if it intends to seek RDA assistance.