Of note, it is 3 in the morning and I hope I am capable of forming coherent thoughts
I think Salt Lake City can learn a lesson from Provo.
This same thing has been happening to Provo for some time (losing many projects to its much smaller suburbs)
It all started with the University Mall getting built in Orem in the early 1970's... It took Provo leaders probably 25 years to figure out the whole lure developers with incentives.
Provo had a declining tax base from that point through the 1980's and then finally they figured it out (well, partially) in the mid -1990's.
The developers of the Riverwoods lifestyle center (as theyre called today) were lured by incentives. The the Provo Towne Centre mall... yes, the PTC mall is not the greatest gift to the city, but from what they learned with these two projects I think have really contributed to the boom that we are seeing downtown as we speak.
After a slow early few years beginning 2000, Orem proposed an 8 story 300+ unit mixed-use building. I remember talking to the developers back in 2002 asking them why this wasnt being built in Provo where it seemed it would make more sense. The guy I was talking with told me, "Provo leaders would never approve something like this..."
I honestly believe that this single project was the straw that broke the camels back... Provo leaders scrambled to have something comparable to the Midtown Village that was just proposed in Orem.
Provo combated this proposal with one of their own, about a year later; Wells Fargo Center.
I believe this is when City leaders really, fully figured it out upon completion of the 7 story mixed use Wells Fargo Center in 2005. This is when leaders and developers alike saw that Provo's core still had huge amounts of potential after decades of neglect.
The city threw in millions of dollars for the parking structure attached to the WFC. It became a boon for the downtown core increasing free parking as well and the first mixed type development of that size in the city's history. This incentive that the city offered, made this project work.
After seeing that the city offered this type of help, other developers have moved on projects in the downtown core. One of these, the 10 story Zions Bank Financial Center

...has already completed demolition and will be breaking ground within weeks. The city negotiated a deal with the Provo City School district to make this project work. A few million dollars in incentives are being thrown the developers way to make sure this works.
There is also the new 10 story University Tower

...that will be breaking ground in the next few months that is also benefiting from the Wells Fargo Ctr parking structure that the city pitched in on, making it a viable project for the developer.
I know for sure that the Zions project developer was considering a suburb or downtown Provo for this tower. Provo won, obviously... I am happy for the most part on the adaptation the city leaders have been able to make in order to keep Provo the center of business in Utah County.