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If You Build It

A Strong Infrastructure Makes Doing Business in Utah a Breeze

By By Marie Mischel

Whether it’s the interstate or the information superhighway, the Beehive State’s infrastructure has what it takes to keep businesses buzzing, and the Utah Legislature is maintaining its investment in roads and IT to ensure that companies continue to find a business-friendly landscape.

Plugged in

Almost three-quarters of Utah homes are equipped with broadband, according to a 2010 U.S. Department of Commerce Report. In addition to making Utah the national leader in this area, it also bodes well for businesses.

“Where there are higher speeds available for residential services, there are higher speeds available for businesses, too,” says Tara Thue, Manager of the Utah Broadband Project.

The project is a joint effort between the Governor’s Office of Economic Development (GOED), the Public Services Commission and the Department of Technology Services’ Automated Geographic Reference Center. Started two years ago, the project is meant to develop a map of broadband services available in Utah and to devise a plan to increase broadband throughout the State.

Currently, Utah is second in the nation for gigabit-to-the-home broadband download speeds, with 95 percent of Utahns having access to download speeds of more than 6Mbps, according to the 2011 National Broadband Map.

“What we’ve found since we’ve been doing the mapping is that Utah is highly deployed with broadband services,” Thue says. “It’s pretty uncommon that you can put a pin on any city on our map and not have some broadband service there.”

That’s critical for attracting high-tech businesses, says Richard Nelson, president and CEO of the Utah Technology Council. “You can never have enough broadband access and speed. It drives opportunity. Fortunately, we’re a state that is very internet savvy.”

This is a discovery that’s already been made by companies such as Adobe, eBay and Oracle. “A lot of businesses—especially tech-related businesses—are coming to Utah because of the broadband infrastructure we have in place,” Thue points out. “It is well-equipped to handle high capacity, especially the Wasatch Front area. Companies are able to build facilities and get the connectivity they need through connections that are already available.”

Worker Bees

“Workforce is probably the No. 1 business resource that we bring to the table,” says Jeff Edwards, CEO of the Economic Development Corporation of Utah (EDCUtah).

Gary Harter, Managing Director of Business Outreach and International Trade at GOED, agrees, saying that when he talks to CEOs about why they are locating their companies in Utah, “one of the top two things they tell us is the workforce.”

About 30,000 people are employed in Utah’s IT industry in companies such as Novell, which began in Provo in 1979, and Iomega, which has been in Roy since 1998. A year after Adobe acquired Omniture in 2009 and chose to retain the offices in Orem, it announced plans to build a new technology campus in Utah, which has the potential to add 1,000 jobs or more to the workforce over the next 20 years.

“That is terrific for Utah; it puts us on the map that we are continuing to be a place for IT companies,” Harter says.

But more than that, the State’s renowned entrepreneurial drive fuels new technologies, new startups and new partnerships. “One of the reasons that companies come to Utah is because we … continue to develop the entrepreneurial spirit throughout the State,” Harter says. That innovation pays off: While Adobe’s acquisition of Omniture is the most recent IT headline in Utah, numerous other startups also have been successful. The State encourages this entrepreneurial spirit through technology commercialization and innovation programs as well as business resource centers throughout the State.

Low Costs

Beyond the well-educated and productive workforce, CEOs are attracted to Utah because of the low costs of doing business, with affordable real estate, low cost utilities, and high-quality and reasonably priced telecom.

“Having been actively involved with economic development for over 20 years, Utah’s highly competitive cost structure, especially in energy costs, continues to differentiate us as a top state for business and careers, as Forbes has identified the last two years,” says UTC’s Nelson, referring to Forbes magazine’s listing of Utah as the Best State for Business because of its energy costs and 5 percent corporate tax rate, among other benefits. “It’s one of our major competitive advantages to have our energy costs at such an attractive level.”

The Forbes ranking measured six categories: costs, labor supply, regulatory environment, current economic climate growth prospects and quality of life.

In the costs category, Utah has the second-lowest electric utility rates across all sectors (commercial, industrial, residential and transportation) and the 10th lowest natural gas costs, according to the U.S. Energy Information Administration.

Meanwhile, salaries across all occupations in the Beehive State are 10 percent less than the national average, according to the Bureau of Labor Statistics, and the cost of living is 6 percent below average in Salt Lake City, according to COLI by ACCRA.

Planes, Trains and Automobiles

The Utah Legislature has committed about $3 billion to road improvements throughout the Beehive State, and over the past five years has received $214 million in federal stimulus monies for such improvements as well. For companies like Litehouse Foods, a refrigerated products manufacturer based in Idaho that opened a facility in Hurricane last May, that commitment is critical.

Each day, eight to 10 refrigerated trucks roll up to the Litehouse Foods building, which is located about 2.5 miles from Interstate 15, bringing in raw material and carrying out packaged goods, says Director of Operations John Shaw, who adds that access to the interstate and the condition of the roads were probably among the top five reasons the company chose to locate in Hurricane

The expansion of St. George’s airport also has benefited Litehouse. Prior to its completion, executives flew into Las Vegas and rented a car for the trip to Utah; now they land less than an hour from the facility.

In addition, the new location has expanded Litehouse’s shipping options, Shaw says. “We’re looking at railway heads for some of our inbound raw materials that come in tankers.”

That Litehouse Inc. is investigating the use of rail lines doesn’t surprise EDCUtah’s Edwards. Utah is the first place that all of the eastbound rail lines from the West Coast converge, he says, and “that’s been a strong competitive factor for us. The same is true of the highways. We’re centrally located. We’re a day’s drive from California.”

An additional boost to Utah’s infrastructure is scheduled to start in mid-2013, when the Salt Lake City International Airport begins its multi-year facilities renovation. The $2 billion project will replace the airport’s aging facilities, some of which are 50 years old. More than 20 million people pass through the gates each year, and the reconstruction project “presents us with an opportunity to express our ascendancy in a number of ways,” including innovative design and construction methods, said Salt Lake City Mayor Ralph Becker in his 2012 State of the City address. “Visitors to the airport should experience a wonderful gateway to Salt Lake City, to our State and to the Intermountain West.”