BYU NewsNet - Recession hits Shops at Riverwoods as foreclosures abound

Utah’s first open-air mall, The Shops at Riverwoods in Provo, is suffering foreclosure after the owners defaulted on multiple mortgage payments on the $30.6 million loan.

As part of the foreclosure, the court appointed Commerce CRG as property manager while the property is being sold, and Cushman & Wakefield of California Inc. is responsible for managing the daily operations of the mall, including collecting rent and managing contracts.

The mall’s financial troubles stem from the recent relocation and bankruptcy of some of the largest tenants, including the closure of Abercrombie & Fitch Co. and Ann Taylor, and the bankruptcy of Copeland Sports.

“Anything higher end has trouble,” Kim Conley said, owner of Kaleidoscope, a clothing boutique at the Riverwoods. “Utah Valley is a unique market. When there is even talk about a downturn, the money just stops.”

According to statements made by EsNet, the shop’s principle investor, the company has been spending up to $1 million a year to subsidize rental shortfall.

Struggling shop owners are also sympathetic to victims of the downturn.

“They are in the same bind that we are,” said Conley. “But they have been really great to work with and patient with late rent and no rent. I don’t have any complaints about them understanding the problems of the merchants here.”

Despite the foreclosure, the shops currently at Riverwoods will continue in their leases and will conduct business as usual until a new owner purchases the property.

“We have really tried not to change anything,” said Shelby Russell, owner of Soel Boutique. “We just pay our rent and do our thing.”

Most shop owners also seem very optimistic about the future at Riverwoods.

“I think the upside to all this is that people are actually buying things that they are going to wear, and last, and love more,” Russell said. “People are just being more mindful, and that is a good thing, and it has been good for us.”

Conley said she agrees.

“I think it is mostly a psychological downturn and when people think that they have skimped long enough they are going to turn around and spend,” she said.

The Shops at Riverwoods is a 191,000 square foot open-air mall along 4800 N. University Ave. in Provo that is part of the larger 120-acre Riverwoods community.