November 15, 2005

A Publication of the Economic Development Corporation of Utah, edcUTAH.org

PRESIDENT'S MESSAGE

Interest in Utah is Booming

I trust by now you’re familiar with EDCUTAH’s new weekly Economic Review and are finding it useful and insightful. If you have comments or topics you’d like to see, please send your comments by clicking the “Comments” button on the bottom of this page.

We will continue to feature relevant economic development articles, including this week’s look at the critical factors currently topping the list for companies considering expansion or relocation of their operations.

In addition, we include links to economic development oriented stories from the previous week, a calendar of events and the informative, if not entertaining ‘Spotlight,’ this week featuring EDCUTAH’s Vice President of Marketing, Kim Lofgreen.
Enjoy!

FEATURE STORY

What Are the Top Factors that Influence A Company’s Decision to Move or Expand into Utah?

Utah is high on the radar of many companies looking to expand or relocate. Nonetheless, the competition is fierce, especially with neighbors Idaho, Nevada, Arizona, and New Mexico. While the conditions that influence a company’s selection vary, five key factors are integral to nearly every expansion or relocation decision: cost of doing business, workforce, timing, location, and incentives.

EDCUTAH sees each of the following factors as an opportunity to increase Utah’s competitiveness and expand upon the booming economic development efforts underway.

1. Cost of Doing Business

Taxes, healthcare, incentives, property prices or leases, workers compensation, utility rates—they positively or negatively impact economic development. Fortunately, Utah’s cost index is one of the lowest in the nation and a key factor in keeping the state competitive. The 2005 Milken Institute “Cost of Doing Business Index” ranks Utah 37th (1 having the highest cost index and 50 having the lowest). Of the western states only Idaho ranks lower.

(Click here to see the index)

To help each company make an accurate analysis of its costs of doing business, and factor in the true impact of cash incentives, EDCUTAH produces a 10 year operating cost projection. Such projections, along with the state’s high marks in the other factors, make the state highly attractive.

2. Workforce

The composition of the labor force is changing dramatically in many states. Aging baby-boomers are retiring, the effects of which will be substantial on the overall economy and on certain industries. Demand for younger workers to fill the vacated jobs, many of which require relatively high levels of skill, will continue to increase. Since Utah has the youngest population of any state in the nation, and is well known for its educated, skilled workforce, this factor makes the state extremely attractive. An intangible aspect of Utah’s workforce is its reputation for being loyal and industrious, with low turnover. Such a reputation is a huge plus for the state.

Approximately 30-40 percent of EDCUTAH’S project load involves manufacturing companies, which typically demand a young, vibrant workforce. EDCUTAH is working to put Utah at the forefront of the market for skilled labor.

3. Timing

Economic development has become fast tracked and speed-to-market is critical. More and more companies are looking for “shovel ready” locations. They want the site work completed with utilities, such as power and water, ready to go. To make Utah more competitive in this area, EDCUTAH is working with the state to create a “Certified Sites Program,” which would pre-qualify sites for industrial development.

EDCUTAH hopes to have 10 sites certified by the end of 2006. These would be shovel-ready locations where a company could break ground immediately. Michigan and Oregon already have certified sites programs, and EDCUTAH believes completion of Utah’s Certified Sites Program will significantly enhance the state’s competitive advantage.

4. Location

Companies want efficient access to major transportation corridors. For example, Cedar City is often an attractive location for California companies looking to relocate because it offers access to both rail lines and the interstate highway. Location also has to do with quality of life, a factor in which Utah excels.

In reality, Utah’s combination of balanced growth, cultural appeal, strong sense of community, and excellent year-round recreational activities puts the state second-to-none in the quality of life category. Nonetheless, quality of life is often a matter of perception and companies unfamiliar with Utah sometimes have distorted views about the state and its culture. EDCUTAH will continue to educate companies in respect to our quality of life and excellent amenities, up-selling the state’s virtues and dispelling whenever possible the preconceived misperceptions people and companies may hold.

5. Incentives

Some states bring buckets of incentive money to the table, using cold cash to foster economic development. Until recently, Utah struggled to compete with large cash incentives. However, the recently passed HB11, a tax rebate program, has helped make the state much more competitive without risking taxpayer dollars. (EDCUTAH will cover the state’s incentive programs in an upcoming issue of the Economic Review.)

Other factors may surface; however the five factors identified above are involved in nearly every relocation or expansion project with which we work. EDCUTAH believes successful economic development must combine an understanding of all the factors that influence location decisions with corresponding, aggressive strategies to promote the many benefits of doing business in Utah.

EMPLOYEE SPOTLIGHT

Name: Kim Lofgreen

Occupation/Company: VP, Marketing and Communications, Economic Development Corporation of Utah.

Education: BS, Marketing, Arizona State University. MBA, Arizona State University.

Growing up: Born and raised in Mesa, Arizona.

Family: Married with 6 children: 2 girls, 4 boys.

Hobbies: Spending time with my family, music (too many years playing in rock ‘n roll bands), art, cartooning/illustration.

Motivations: My family.

Ambitions: To see my children be healthy, happy and successful.

Why economic development is important: We need to provide sufficient quality jobs in the future for our children. We also need to provide the financial backbone so that we may continue to improve the quality of life for all and to improve the quality and level of education for our children.

Improvements in economic development you’d like to see: Greater coordination throughout the state in both the public and private sectors regarding economic development issues.

Proudest moment: I know everyone says this, but it truly is the birth of each of my children.

Most embarrassing moment: Much too many and too humiliating to share with the world.

Favorite book: It would have to be one of the last two books I’ve read, either John Adams or 1776. I purchased and read most of 1776 while spending five days in Philadelphia at a conference. It was a wonderful experience to walk the historical areas and think about the founding of this country as I was reading about it.

Favorite mentor: Both my parents, who patiently and lovingly raised 11 children.

IN THE NEWS

Business Headlines from the Past Week

Canada Watching Utah's Life Sciences Industry

- Utah's booming life sciences industry is getting noticed, particularly by Canada. Medical exports to Canada from Utah reached $28 million in 2004, the third largest export category in Canada-Utah trade, according to information provided by the Canadian consul. (D-News) (SL Trib)

Utah's Biotech Industry Under the Microscope

- Utah is the No. 15 region in the nation for total number of biotechnology companies, according to an Ernst and Young biotechnology and industry report. Utah has approximately 20 biotech companies, two of which are publicly held. Industry leaders at the E&Y presentation expressed both enthusiasm and anxiety about the future of Utah’s biotechnology industry. (Utah Business)

Incentives Pushed to Aid Economic Development

- Economic development leaders in state government want to pair up a couple of financial incentives to help lure companies to Utah or aid in local companies' growth. (D-News)

Beattie: Utah Expected to Grow Dramatically Over Next 5 Years

- Speaking during the annual board meeting of the Salt Lake Chamber of Commerce, President Lane Beattie said Utah's population will swell by 305,000 in the next five years, which is the equivalent of adding the combined populations of Davis and Summit counties. That kind of growth will put pressure on education and roads and other key infrastructure components. (KSL) (D-News)

Merit Medical Systems Opens New Facilities in South Jordan

- Merit Medical's new, $24 million South Jordan facility will increase its production capacity and add 134 new positions to its Utah workforce, increasing payroll by $4.2 million. D-News)

University of Southern Nevada Breaks Ground for Utah Campus

- The private University of Southern Nevada, a pharmacy school, broke ground Friday for its 117,000 sq. ft. Utah campus in the RiverPark Corporate Center, South Jordan. The school will open the Utah campus in fall 2006. The Salt Lake Tribune reports that for Utah to keep pace with prescription drug demand, the state will need between 92 and 116 new pharmacists a year or twice the number of annual qualified graduates churned out by the University of Utah.

Leggett & Platt to Close Cedar City Plant, Cut 70 Jobs

- Missouri-based Leggett & Platt Inc. plans to shut down its Cedar City operation next month, displacing about 70 employees. (The Spectrum)

Utah Safe as Military Bases Begin Closing

- Final recommendations from the Base Realignment and Closure Commission resulted in a loss of only six jobs for the Utah. Not much happened at the Davis County military hub—a few workloads were shuffled to other bases, while Hill gained some workers. (Daily Herald) (KUTV)

More Funds Sought to Court Hollywood

- Lawmakers recommend tripling an incentive fund for the motion picture industry. An interim legislative committee is recommending tripling - to $3 million - the state's investment in a fund that gives the motion picture industry incentive to film in Utah. (D-News) (SL Trib)

Rotary switches convention to Salt Lake Rotary

- International's 2007 mega-convention will be coming Utah, rather than New Orleans, thanks in part to hurricane Katrina. (Standard-Examiner) (D-News) (SL Trib)

‘Speed Pitching’ Matches Startups With Investors

- FundingUtah.com's first "speed pitching" luncheon rapidly matched 10 start-up companies with dozens of angel investors and venture capital firms. ”With a giant clock display ticking down the seconds, entrepreneurs repeated five-minute presentations to tables of four or five investors, wooing their listeners for millions of dollars in capital.” (SL Trib)

New Plans to Expand Powder Mountain Ski Resort

- Plans are in the works to turn Powder Mountain Ski Resort into a four-season resort and luxury development. Built in seven phases, the resort will feature 15 ski lifts, two golf courses, 415 hotel and apartment units, 195 houses, six corporate retreats, an equestrian facility and 150,000-square feet of commercial space. (SL Trib)

CALENDAR

Nov. 16

EDCUTAH New Investor Orientation (EDCU Offices)

Nov. 17

EDCUTAH Board of Trustees Meeting

Nov. 18

GOED Board Meeting

Nov. 18

UITA Board of Trustees Meeting

Nov. 23

GOED Tech Breakfast (Click here for more information)

Dec. 15

EDCUTAH Holiday Open House (EDCUTAH Offices)

Feb. 10-12

EDCUTAH Site Consultant Event (Park City)

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