January 3, 2006

  

A Publication of the Economic Development Corporation of Utah

 PRESIDENT'S MESSAGE

 Wishing You a Prosperous New Year



Let me begin by wishing EDCUTAH’s partners and friends a prosperous New Year. Your continued support is critical to our success and we appreciate all that you do to help economic development thrive in Utah.

Today’s Economic Review is slightly pared down due to the holiday.  Nonetheless, it contains some very interesting information. Last week one of our partners, Commerce CRG, released its year-end numbers for the office and industrial markets in Salt Lake County. As our feature story points out, office vacancies in Salt Lake City dropped by 8 percent during 2005, while the industrial market in the county is seeing construction growth for the first time since 2002.

Today’s issue 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.

Here’s to a happy and prosperous New Year!

Jeff Edwards
Jeff Edwards
President and CEO

FEATURE STORY

More Signs of a Strong Utah Economy

Solid Demand in Commercial Real Estate

Last week commercial real estate brokerage firm and EDCUTAH partner Commerce CRG released its year-end numbers for the office and industrial markets in Salt Lake County, which show solid demand and a positive outlook for 2006. These numbers are significant, since the availability of both office and industrial properties is critical in attracting out-of-state companies to expand into Utah.

Commerce CRG says office vacancies in Salt Lake City dropped by 8 percent, from a 19.3 percent vacancy rate to 11.3 percent during 2005, while the industrial market in the county saw construction growth for the first time since 2002.

Office space absorption in Salt Lake City matched a record set in 2000 and exceeded the last three years combined. The increased absorption is timely, considering seven new office buildings (720,000 square feet) are under construction in Salt Lake City and six additional buildings could be started and completed in 2006 (for a total of 1.2 million square feet of new office space).

In Salt Lake County, large-scale speculative industrial construction returned to the marketplace in 2005, along with a surge in industrial land sales. Lease rates are also on the road to recovery and developers are pursuing significant big box projects for the first time in four years. The market is so active that an occupancy decline into the six percent range by mid-2006 is not unrealistic.

Commerce CRG numbers for the other Wasatch Front counties should be out this week. They are expected to be equally positive.

Utah Ranks 3rd for Economic Competitiveness

For the second year in a row Utah ranks in the top tier for economic competitiveness, according to a study just released by the Beacon Hill Institute at Suffolk University in Boston. Utah ranks third in the nation for its strength across a broad variety of economic indicators. Massachusetts ranked 1st.
 
 State  Rank
 Utah  3rd
 Colorado  4th
 Idaho  12th
 Arizona  24th
 Wyoming  25th
 New Mexico  38th
 Nevada  39th

The Institute defines competitiveness as “the policies and conditions that ensure and sustain a higher level of per capita income and its continued growth.” The State Competitiveness Report 2005 assigns 42 variables to eight categories – government and fiscal policy, security, infrastructure, human resources, technology, business incubation, openness, and environmental policy – and combines these eight measures into a single “competitiveness index.”

No Dark Clouds on the Horizon

The December edition of Utah Business Magazine takes a look at prognostications for the 2006 economy and can’t find a dark cloud on the horizon. Writer Lucy Burningham interviews several economists and other sources for the cover story and the consensus is steady growth for 2006.

Inc. Magazine Announces 25th Annual Search for 500 Fastest-Growing Companies in America

Inc. magazine and Inc.com have begun the search for the 2006 Inc. 500, the annual listing of America’s 500 fastest growing privately-held companies.  The Inc. 500 listing is widely regarded as the most prestigious indicator of growth among independent companies in the US.

A preliminary qualification form is available at Inc.com through  January 15. In late January and February, Inc. staff will contact the companies that have a chance at making the list and ask them to fill out a more detailed application. (Full press release)

IN THE NEWS

Business Headlines from the Past Week

New Dollars Help Colleges Push Research to Market

- Over the past 20 years, the U. and USU have launched more than 180 startup companies. The ventures include Evans and Sutherland, Myriad Genetics, HyClone Laboratories, Sorenson Communications, NPS Pharmaceuticals and ARUP, to name a few. What's new this time is that the state is investing in the effort. (SL Tribune)

Another Look at Utah’s 100 Fastest Growing Companies

- Marketing genius. A vision to help people. The dedication to build something. A passion to be the first to discover new technology. These and other common threads of success distinguish this year’s group of Utah’s 100 Fastest Growing Companies. Compiled by MountainWest Capital Network, the 100 Fastest Growing companies are selected from a pool of thousands of Utah-based companies that are at least five years old and reported a minimum of $50,000 in revenue in 2000— the base year. (Utah Business Magazine -- registration required)

Lehi Hopes New Look Will Revitalize Downtown

- Hoping to revitalize the area, Lehi is planning a new look for its historic downtown. The city has selected a planning and architectural consultant to design a new look for the city. (Daily Herald)

Ogden Gateway Center Expected to Open in May

- An upscale restaurant, a posh lounge for flight crews and a terminal equipped to handle scheduled commuter service will all be part of the new Ogden Gateway Center airpark. (Standard-Examiner)

Utah Information Technology Association (UITA) Announces Four New Trustees

- The Utah Information Technology Association (UITA) announced four new members of its Board of Trustees at the UITA Trustee Meeting. New trustee appointments include: Jacqie Soechtig, CEO, First Choice Solutions, Michael Wilcox, Utah Public Sector Account and Executive of Hewlett-Packard, Cynthia Bioteau, president of Salt Lake Community College, and Sam Gardiner, partner in the law firm of Dorsey & Whitney. (UITA) (Press release)

Job-site Zones for Davis County?

- If more Davis County residents are going to work closer to home, then city leaders will need to establish "job-site" zones now for future economic development. That is a warning being issued by Envision Utah staff. "You have to have at least the zoning in place to allow it to happen," Envision Utah Planning Director Ted Knowlton recently told the Layton City Council. (Standard-Examiner)

Utah County Commissioner Thinks Tourism Arm a Failure

- The Utah Valley Convention and Visitors Bureau will receive the $1.1 million called for in its 2006 business plan, but Utah County Commission Chairman Jerry Grover isn't happy about it. (Morning News)

Tweaking Sales-tax Laws Could Cost Some Cities Big Financial Hit

- As Utah lawmakers gear up to tweak how sales-tax revenues are distributed among the state's 242 municipalities, a handful of cities are preparing to take a financial hit. (SL Tribune)

Small Biz Not Ready to Survive Disaster

- Only slightly more than half of the companies in the state and its neighbors in the Southwest with annual revenues of $10 million or more have a business continuity plan, according to a national study released Wednesday by AT&T Inc. and the International Association of Emergency Managers. (SL Tribune)

Ogden City Approves Boyer Contract for Mall Development

- The City Council has approved a development and lease agreement with The Boyer Co. for most of the vacant land on the southern half of the downtown mall site. Under the agreement approved Tuesday as the last act of the current council, The Boyer Co. will develop at least 50,000 square feet of retail space, at least 40,000 square feet of office space and a multiscreen theater complex. (KSL) (Morning News)

GOED Board Approves Incentive for Beryllium Plant

- In an effort to help convince Brush Resources to build beryllium processing plant in Utah, the Governor's Office of Economic Development Board two weeks ago approved $700,000 in tax incentives over a 10 year-period for the company. The plant is expected to increase state tax revenue by as much as $2.3 million over the same 10 years. (SL Tribune)

IKEA Incentives in Line

- Incentives Draper offered IKEA to build a 310,000-square-foot store in the city appear to be in line with or less than what other cities have offered the furniture retailer. (Morning News)



CALENDAR

Jan. 11:
Washington County Economic Summit (www.whatsupdownsouth.com)(St. George)

Feb. 10-12:
EDCUTAH Site Consultant Event (Park City)

March 8-9:
Big Business and Technology Expo (Orem)

April 6-7:
Utah League of Cities and Towns Spring Convention (St. George)

April 9-12:
BIO 2006 Annual Conference (Chicago)

April 23-26:
CoreNet Global Summit Spring Convention (Philadelphia)

May 3-4:
Salt Lake Chamber Business-to-Business Expo

May 21-24:
ICSC Spring Convention (Las Vegas)



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