Published on May 20th, 2013 | by UC&D Magazine0
Is it Because of Utah’s Strong
Performing Economy, or its Business-Friendly Culture?
In the aftermath of the Great Recession, there has perhaps been no news quite so encouraging to economists as the broad rebound in construction, in particular the housing market. Yet, in some ways, Utahns were sheltered from the sheer desolation experienced by other states in the entire construction sector. Instead, we have had a capital city skyline perpetually graced with active tower cranes, thanks to savvy, responsible investments that have driven nation-leading projects like downtown Salt Lake’s City Creek Center, the NSA project, and the reconstruction of I-15 in Utah County. Thoughtful collaboration has also helped drive industry growth across Utah’s most important sectors, headlined by the recent expansion of The Boeing Company in West Jordan, as an addition to its Salt Lake plant.
The City Creek Center project was awarded the Best Retail Development in the U.S. by the International Property Awards in 2012. But more importantly, City Creek has risen out of the dust of a once-antiquated downtown zone, presciently capturing the spirit of Utah’s emergent cultural renaissance and cleanly paralleling Utah’s broader recovery.
The City Creek Center also has pushed the “living downtown as a choice” envelope with stately new residential options, and there is significant momentum in aligning Salt Lake’s multiple entertainment assets into a unified entertainment theater/arts district around a new $110 million performing arts center.
Information technology, for example, whose digital media sub-sector has become defined by a top-ranked gaming program at the University of Utah and award-winning animators at Brigham Young University, continues to draw national attention. In Lehi and Draper, Adobe, IM Flash, Twitter, eBay and Oracle round out new additions to our nationally-recognized and growing IT sector.
We know business is thriving in Utah. With 4% job growth, Utah is outpacing the nation by a factor of 2.5. With unemployment hovering close to 5%, Utahns are finding work, or reentering the active job search thanks to the state’s nation-leading economic outlook (read: #1 for five straight years according to the American Legislative Exchange Council).
The private sector has the opportunity to confidently risk growth capital thanks to a stable, fiscally prudent government that promotes efficient collaboration. In fact, the success of Utah’s private-public partnerships has captured the imagination of the nation’s thought leaders.
Our growth assistance model is sustainable and stable. For example, when the housing bubble burst, a major national housing product manufacturer (KraftMaid Cabinets) with a new large facility in West Jordan was decidedly impacted, resulting in that firm consolidating operations elsewhere. The company had received a post-performance Economic Development Tax Increment Financing (EDTIF) incentive from the Utah Governor’s Office of Economic Development (GOED).
Thanks to the post-performance criteria of the State of Utah’s business incentives, Utah did not also lose a major investment. Instead, the company made a significant capital investment in Utah and continued paying state and local taxes even though they shuttered the modern plant. Because of the post-performance incentive process only a few hundred thousand dollars were credited to the company from the taxes they had paid — not the millions they could have earned if the operation had endured the recession.
The private sector has the opportunity
to confidently risk growth capital thanks to a stable, fiscally prudent government that promotes efficient collaboration. In fact, the success of Utah’s private-public partnerships has captured the imagination of the nation’s thought leaders.
But the road block hit by one company created an opportunity for another company when the state could market a modern 850,000 SF plant to Boeing. Now hundreds of high paying jobs are returning to West Jordan. Utah’s economic dynamism and vitality were certainly no secret to Boeing when the company began looking for the best opportunity around the country to expand.
While it may seem a stretch to imagine a cabinet manufacturing facility shifting to fabrication of composite horizontal stabilizer components for Boeing’s 787-9 Dreamliner, it made perfect sense for the company given the proximity of the building to its existing facility, and the stability of Utah’s economic and political climate.
While design and construction on the facility’s refurbishing will take a couple of years, the company will begin filling some positions right away. In the meantime, the State remains committed to supporting the renowned business-friendly environment that has elevated Utah to its premier global business destination status. And with Utah’s cultural vitality and unrivaled quality life continuing to underpin the State’s one-two punch of economic and workforce dynamism, it is no wonder Utah’s project pipeline is full of multi-national companies considering expansion in the state.
It is these companies, and the hundreds of new, smaller support firms, that will help define Utah’s future economy.
Andrew Gillman is a marketing coordinator for the Utah Governor’s Office of Economic Development (GOED).