SALT LAKE CITY (AP) -- Another retailer is abandoning downtown Main Street, already plagued with empty storefronts and unused office space.
Old Navy, open for less than three years, will close by month's end, leaving 37,443 square feet of retail space empty and an unknown number of employees out of work.
The national chain occupies the fourth-largest downtown retail space.
Employees at the store, which opened Aug. 21, 2000, say they were told at an early morning meeting last week that the store will close July 24, but The Gap Inc. spokeswoman Claudia Hawkins said the store will be abandoned July 31.
Some store employees said they were given opportunities to work at other area Old Navy, Banana Republic and The Gap stores.
The decision to close the store was part of The Gap Inc.'s continual review of low-performing store locations. The Gap Inc. owns Old Navy, Banana Republic and The Gap.
Last week, Boyer Co. met with officials from The Gap Inc. and the topic of Old Navy moving to The Gateway development was discussed, Gateway project manager Jake Boyer said.
Boyer emphasized it was The Gap Inc., which already operates a Banana Republic and The Gap at The Gateway, that brought up Old Navy.
"In the meeting with them last week about other issues, Old Navy did come up," Boyer said. "I don't know what their status is on Main Street, the only thing I know is that they are extremely unhappy with the store on Main Street. They were just kind of exploring if there were other options at The Gateway."
Boyer said he informed The Gap representatives that the city has imposed financial penalties on Boyer Co. if it brings businesses already on Main Street to The Gateway, a sprawling mixed-use mall Boyer built four blocks west of Main Street downtown. Unless those financial penalties are lifted, Boyer said Old Navy would not be welcome.
"We would have to have those penalties lifted or we couldn't do the deal," Boyer said. "We did not approach them about Old Navy. The topic came up from their side rather than ours."
Seattle investor Gene Horbach, head of E&H Properties, which owns the building that houses Old Navy, said he had not heard the store was leaving.
Horbach said he had heard rumors for months that Old Navy was struggling and was ready to leave. However, he recently contacted Old Navy and representatives said they weren't leaving.
"They actually denied it," Horbach said Thursday. "They said their business has been improving."
Old Navy has a lease with E&H for another eight years that it will have to continue to pay, Horbach said.
"Main Street is really in a bucket," Horbach said. "All you have to do is drive through it and see how many spaces are vacant."
In February Horbach requested a $6 million low-interest loan from the Salt Lake City Redevelopment Agency to put a nightclub with two restaurants and a cultural museum in the buildings directly south of Old Navy which Horbach also owns. Horbach hoped the development would breathe life into the area surrounding Old Navy, but the loan request was denied.
(Copyright 2003 by The Associated Press. All Rights Reserved.)