Monday, November 21, 2011

No Giving Thanks In Orem

Nordstrom's has pulled the plug at the University Mall in Orem.  Come 24 February, the mall will be missing two out of three anchor tenants (Mervyn's spun in several years ago, and Nordstrom's closure will leave only Macy's, in the old ZCMI space it got in the buy-out.) as Nordstrom's heads north to open its new store in City Creek.  Orem will seriously be hating that loss of sales tax revenue, and Woodbury (the mall owner) has to be ruing the improvement money it fronted to get Nordstrom to move into that space 10 years ago.  It's only half-way through the 20 years of earmarked sales taxes it was promised as reimbursement, and that payment stream just went POOF.

So why is Nordie's doing this?  Because it knows where the money is.  Nordstrom's has always been well above median in the market, it wants to go farther up the scale, and it doesn't think enough of the good citizens of Utah County have sufficient discretionary income to make it fly.  In other words, Nordstrom's has called the yeast-growth-curve-knee in the MLM Ponzi scheme that is the Utah County economy.  Utah County is saturated.  There isn't enough upline/downline/sideline left for the next magic hoochie juice to cover family expenses and still leave some extra for Waterford crystal or clothes imported from anywhere other than China.

But we're so business friendly here and have such a well educated population.  News flash: That's the problem.  Because of what Utah is, gazillions of highly trained people flock here for jobs that don't exist.  You can't swing a cat without hitting a dozen people with graduate degrees pounding the streets peddling security systems door to door because there isn't anything else to do.  Add to that a rabidly pro-business legal and social environment, and you're not just in a race to the bottom of the wage barrel, you're picking up the barrel and digging a hole under it.  You end up with no one being able to shop at Nordstrom's, except for the top 1%, and let's face it, there are only so many stores 25,000 people can keep open.

Of course the Chamber of Commerce is putting a big smiley-face on this, assuring everyone that Woodbury will have a new anchor in there in no time.  I don't know what Kool-Aid they're drinking, and I'm not sure I want to know.  What anchor retailers are looking for space like this?  The Mervyn's space has been dark for three years now.  Who is going to look at the demographics and decide that moving into this space is a good play?  The Dollar Store?

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