Dec. 2, 2008

   A Publication of the Economic Development Corporation of Utah
CEO Jeff Edwards

President's Message

Thanksgiving Reflections


Time spent giving thanks with friends and family helps us appreciate life's great blessings. During my weekend of giving thanks I also pondered what we have to be thankful for in the realm of economic development in Utah. In these tumultuous times it can be difficult to see the positives, but a quick glance at Utah's economy shows some areas of great strength.

This week, Hamilton Partners will "top off" 222 Main with the last beam of its 22 story tower on Main Street. This building will be the first LEED certified high-rise in Utah. This massive building and the investment in downtown Salt Lake City, in addition to the billions of dollars being invested into City Creek Center, are two of the many developments to be thankful for in Utah.

We should also be thankful that, as CNN and Careerbuilder.com just reported, three Utah Cities are among the country's best for finding jobs: Logan, Salt Lake City and Provo. What's more, the state's lower unemployment average gives Utah a great outlook--better than most of the nation. Read more about our unemployment situation in the full story here.

At EDCUtah, we continue to receive new projects every week and continue to work hard to bring those projects to fruition. We have a lot to be optimistic about and I encourage you to feel thankful, as well.

Our feature story this week focuses on the interesting, positive changes taking place with UTOPIA, the consortium that is bringing high-speed fiber optic connectivity to commercial and residential customers in underserved areas of the state. Eight of EDCUtah's municipal investors are part of the consortium.

Today's Economic Review also includes links to many of the ED-related news stories from the past week. As always, if you have comments, suggestions or topics you'd like to see in the Economic Review, please contact us by clicking the "Comments" button on the bottom of this page. Enjoy!

Jeff Edwards

Jeff Edwards
President and CEO

Feature

Utopia Has a New Model, New Management, and New Life


In 2004 Utah's two community-driven fiber optic networks were the cutting edge of broadband fiber-to-home connectivity—bold moves to bring services such as Internet, voice and video signals at light speed over public infrastructures to underserved markets in 16 The Utah Telecommunications Open Infrastructure Agencycommunities across the state.

Today, after lengthy litigation, delays and setbacks, one of those networks, iProvo, has gone private and the other, UTOPIA, has refinanced and restructured with a new business model, new management team and a greater focus on financial health.

"UTOPIA" is an acronym that stands for Utah Telecommunication Open Infrastructure Agency, a public entity comprised of a 16-city consortium, which banded together to deliver a ubiquitous 300-plus-mile fiber optic network to underserved markets from Tremonton in northern Utah to Cedar City in southern Utah. EDCUtah investor municipalities involved in UTOPIA include Brigham City, Cedar City, Layton, Midvale, Murray, Payson, Riverton and West Valley City.

Hugh Matheson, spokesman for UTOPIA, says the consortium was formed around the concept that true broadband was going to be a major driver of economic development and that it was important for municipal governments to provide the network infrastructure and let the private sector provide services over the infrastructure. Thus, UTOPIA's "Open Service Provider Model" delivers the physical infrastructure to the doorstep, office or business, while renting bandwidth to private sector companies that compete to deliver everything from Internet access, voice, video and other services over the infrastructure.

UTOPIA's fiber optic infrastructure utilizes light to transfer information, making it the fastest communication technology on the planet. Most current networks operate on a copper wire infrastructure that limits the speed and amount of information that can be transferred. But with UTOPIA, customers can reach speeds up to 100x faster than current broadband connections. Furthermore, its active ethernet infrastructure means customers never lose speed through a shared connection with other homes or businesses. The network is primed for high-demand uses such as:

  • Telemedicine
  • Distance education
  • Real time, two-way video conferencing
  • Telecommuting
  • Interactive gaming
  • Remote data storage and retrieval
  • Whole home automation

Matheson says UTOPIA's new CEO Todd Marriott and development director Chris Hogan are leading a strategic shift that has helped strengthen its relationships with current service providers, such as XMission, Fibernet, Veracity, Fuzecore, MStar, and Nuvont, and also helped as it pursues additional service providers. Key to UTOPIA's new focus is a return-on-investment analysis, which is directing network deployment toward businesses in addition to residential areas where UTOPIA infrastructure has already been built. Recently, UTOPIA began connecting its fiber network to underserved office parks in Utah County. UTOPIA's goal is still to be ubiquitous eventually, but to do so by first becoming fiscally sound and then building upon the strength of its improved financial model.

In addition, UTOPIA is making a series of other changes meant to improve its economics, which include replacing Tetra Tech, the partner it used for fiber deployment, and transitioning to an in-house network operations center from one managed by PacketFront (which acquired Dynamic City, one of the creators of UTOPIA's original business plan). UTOPIA service providers have also contracted with a third party to help sign up new customers. Network Community Services representatives are going door to door on behalf of service providers, explaining to potential customers what their choices are and helping them sign up.

Ultimately, UTOPIA is still a major international test-bed for open access networks and all eyes are on UTOPIA to see if its new course will ultimately prove successful.

"It's a major undertaking," says Matheson, "but the new ROI-based deployment strategy will provide the economic base necessary to build out the entire project. As the network grows, it will be exciting to see how existing and new businesses in member cities will take advantage of true broadband connectivity."

CALENDAR


Dec. 17:  Holiday Open House 4 to 6 p.m. at EDCUtah

Jan. 13, 2009:  Entrada at Snow Canyon Country Club;  reception 6 to 8 p.m.

Jan. 14:  Washington County Economic Summit, 7 a.m. to 2 p.m., Dixie Center, St. George, UT www.whatsupdownsouth.com

March 24-26:  JEC Composites Show (Paris, France) http://www.jeccomposites.com/jec-show/

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In The News

Economic Development Headlines from the Past Week

SiteSelection.com highlights Barnes Aerospace expansion

- A story in the November edition of Site Selection Magazine's online edition hightlights the expansion of Barnes Aerospace, a business unit of Barnes Group Inc. and a global jet engine component overhaul and repair service company, which has tripled the size of its operation in Utah, unveiling a new 165,000-sq.-ft. (15,329-sq.-m.) facility in Ogden.
(SiteSelection.com--scroll down)

Utah's 100 fastest growing companies

- Business comes down to one thing for Utah's fastest growing companies: giving the customer something no one else can. That knack for finding a market niche and going after it with gusto spurred homegrown companies Interbank FX and Skullcandy to post unheard of growth rates -- close to 29,000 percent -- over the last five years.Towering growth earned both companies the top spots on this year's Utah 100 Fastest Growing Companies list announced in October by MountainWest Capital Network. (Business Connect)

3 Utah cities among best for finding a job

- In reference to CNN's ranking of three Utah cities as among the best places to find jobs, Jason Perry, executive director of the Governor's Office of Economic Development, says "Having three Utah cities in the top 25 highlights why Utah remains one of the bright spots in America for finding jobs." (Press Release)

Groundbreaking for wind farm in Utah's west desert

- A wind farm in Utah's west desert will start with 97 giant turbines. Newton, Mass.-based First Wind held a groundbreaking Friday. It already was building gravel roads and delivering blades to the site 10 miles northeast of Milford. (Local News 8) (Spectrum) (Salt Lake Tribune)

The Beehive State is buzzing with demand for new IT workers, but what will it take to attract them?

- "Utah! Where Ideas Connect" was the state slogan from 2001 to 2006. Currently, however, recruiters and workers are failing to connect in the Utah job marketplace. Research, information technology development and service-based industries are important economic activities along the Salt Lake City/Ogden/Provo corridor. Utah is a hub for new tech companies; but like the rest of the country, it's currently experiencing an IT employment crisis. (Business Connect)

Downtown businesses bolstered
by Black Friday shoppers

- Many businesses rely on holiday shoppers to get through the year. And with gloomy economic forecasts, expectations were low going into Black Friday - the unofficial kickoff to the holiday shopping season. (KCPW) (SL Tribune)

Economy sending people to school

- Enrollment growth at Utah's technical colleges isn't expected to slow down anytime soon, thanks to a sluggish economy. The Utah College of Applied Technology increased the number of students enrolled during the 2007-08 school year by nearly 12 percent over the year before, according to its annual report released recently. (Standard Examiner)

Canadian cooperative close to buying Midvale's Sportsman's Warehouse

- A cooperative started by Canadian farmers a century ago, and which topped $2 billion in revenue last year, is poised to purchase a majority interest in Sportsman's Warehouse, a Midvale-based outdoors company with four Utah stores among its 67 locations in 38 states. (Salt Lake Tribune)

WaMu layoffs skip Utah

- But in Utah, virtually all 300 WaMu workers will continue to be employed by Chase as they continue to serve customers through WaMu's transition to the Chase brand in 2009, said Mary Jane Rogers, a spokeswoman with JPMorgan Chase. JPMorgan Chase & Co. said Monday it will cut 9,200 jobs at Washington Mutual, which it acquired Sept. 25 after WaMu became the nation's largest bank to fail amid the credit crisis. Most of the affected jobs are in Washington and California. (Daily Herald)

Weekend sales beat expectations

- National and local retailers witnessed a glimmer of hope amid economic turmoil as shoppers pounced on substantial discounts over the weekend, surpassing projections in many cases. (The Spectrum)

Small Talk: Small businesses find silver linings in downturn

- An economic downturn, while fraught with pain and problems for so many small businesses, can also have some upsides for companies. Some are to be expected -- a tough economy motivates businesses to find new ways to work more efficiently -- while others are serendipitous, coming in the form of opportunities for expansion. (SL Tribune)

Shaky economy may help stabilize some Utah cities

- The unstable economy that is slowing development in southwestern Utah may end up saving cities, towns and residents money, according to a Utah Geological Survey official. UGS senior scientist Bill Lund wants to take advantage of a "pause" in growth in the normally booming St. George/Hurricane area by making sure government planners, geologists and engineers are aware of the geologic hazards and adverse construction conditions in their respective municipalities.
(Morning News)

BHP ends bid for Rio Tinto Group

- BHP Billiton, the world's largest mining company, abandoned its hostile bid to acquire Rio Tinto Group on Tuesday, saying turmoil in financial markets, uncertainty about the global economic outlook and regulatory concerns in Europe meant the deal was no longer in the best interests of its shareholders. (Morning News) (NY Times)

Canadian company closes southern Utah mine

- Toronto-based Denison Mines Corp. shut down the Tony mine in southern Utah on Tuesday due to slumping uranium prices but is opening another Utah mine that has higher grades of uranium. Company President Ron Hochstein said the Beaver Shaft mine in San Juan County also has deposits of vanadium, which is used in steel alloys, and yields better uranium ore than the Tony mine in Garfield County. (Morning News)

Conference, week a ‘huge success'

- Hundreds of entrepreneurs were in attendance Thursday for the eighth annual Global Entrepreneurship Week Conference at the South Towne Exposition Center. "In tough economic times, it's a great feeling to know that entrepreneurship has shown a great interest in the local areas of the state," said T. Craig Bott, president and CEO of Grow Utah Ventures. "There's a heightened awareness of entrepreneurship here, as showcased by all the people present at this conference." (Clipper Today)

Jobs: Most Utah workers say they'll be employed in '09

- Utah's job prognosticators see storm clouds on the horizon, but residents see sunny skies. A Dan Jones & Associates survey for the Deseret News and KSL-TV found 96 percent of Utahns think they will have the same job six months from now. That vision is quite different from the forecast by Mark Knold, the Utah Department of Workforce Services' chief economist. Last week, he projected that Utah could lose as many as 19,000 jobs in 2009. (Morning News)

Business leaders pessimistic

- Utah business executives continue to be less optimistic about their companies' economic futures, according to a Zions Bank quarterly survey. The Zions Bank Utah Quarterly Economic Forecast featured an "optimism" score of 6.13 for the third quarter. That figure is the lowest since the surveying began in the second quarter of 2006, when the score was at its high point of 7.87 on a 1-to-10 scale, with 1 being "very pessimistic" and 10 being "very optimistic." (Morning News)

Ski/snowboard benefit scheduled for February

- Comprehensive wealth management service provider Bob Aamodt Inc. is giving businesses along the Wasatch Front a chance to promote their companies while supporting local youth programs through its second "Vertical Challenge" ski/snowboard event. The benefit is scheduled to take place Feb. 27 at Snowbasin and will support values-based programs sponsored by the Boy Scouts of America for more than 46,000 local youth in the Trapper Trails Council. (Morning News)