Local leaders gather to discuss commercial growth and economic development
Salt Lake City — The Utah Valley Chamber of Commerce partnered with Colliers International once again to host the annual Utah County Commercial Real Estate Symposium earlier this month. Local community and business leaders from across the county gathered at the Utah Valley Convention Center to discuss the most pressing issues impacting commercial growth and economic development throughout the Wasatch Front. The event garnered a great turnout, with speakers and panelists highlighting the strength of Utah’s economy and the greatest challenges to future growth.
The Utah way
Former Governor Gary R. Herbert kicked off the symposium as the keynote speaker, highlighting the successes he saw during his time as governor and how Utah can continue that momentum into the future.
Governor Herbert took over in 2008 with the goal of making Utah recognized as the most powerful economy in the country. By and large, he succeeded: according to the Hatch Index, Utah has the most diversified economy in the United States today. Governor Herbert attributes Utah Valley’s unprecedented growth to the implementation of the State of Utah’s Four Pillar Strategy: economic development, energy, education, and efficiency. He also recognized how the establishment of the rainy-day fund for the state of Utah by Olene Walker helped enable quick recovery from the effects of Covid. He then pointed out that Utah’s workforce is value-driven and dedicated to family and hard work, leading the nation in both volunteerism and charitable contributions.
When asked what might limit Utah’s growth into the future, Governor Herbert focused on water shortage, adding that more emphasis needs to be placed on conservation efforts in order to sustain Utah’s growing economy. Overall, however, by staying true to its fundamentals, Utah can continue to succeed well into the future.
The state of the Utah Valley economy
Following Governor Herbert’s remarks, Juliette Tennert, chief economist at the Kem C. Gardner Policy Institute, addressed the state of Utah Valley’s economy. She began by emphasizing that the economy is strong, leading the country in recovery from both the Great Recession and the ongoing pandemic. Utah also leads the nation in job growth and job creation, with one in three new Utah jobs being created in Utah Valley. Economic growth in Utah Valley is broad-based, spanning various sectors and job types.
She pointed out that Utah would not be number one in the nation without Utah County. For example, Utah had a 3.8 percent change in jobs from August 2019 to August 2020. Without the Provo-Orem metro, Utah would be number two behind Idaho, at just 3.1 percent. Utah also leads the nation in population growth, with one in three new Utahns living in Utah Valley. Population growth was so substantial, in fact, that Utah County has added “two new Lehis” in the last few years.
Utah County is not immune to national challenges, however. Recovery pains will include supply constraints, price instability, water supply, and perhaps the biggest roadblock, an ongoing housing shortage. Utah is unique, though, in that policymakers are actively planning to create more housing equality into the future — something other areas don’t do. The overall outlook is positive with some risks: the Delta Variant and surge in prices serve as good reminders that Utah is not out of the woods yet.
Economic trends and insights
The first-panel discussion included Dan Hemmert, executive director of the Governor’s Office of Economic Development, and Jeff Acerson, Lindon Mayor and UTA board member, with Brandon Fugal, Chairman of Colliers Utah, and Lew Cramer, CEO of Colliers Utah as moderators.
Fugal started things off by asking what the greatest challenge to growth is moving forward. Echoing sentiments from earlier in the conference, panelists mentioned housing affordability, a workforce shortage, air quality, and a potential water shortage and dust bowl as the Great Salt Lake dries up. Jeff Acerson pointed out that UTA’s critical area of focus is housing, specifically building higher-density housing along transit highways. Acerson took some time to review plans to improve the transportation infrastructure for the State of Utah, including various FrontRunner, BRT, Streetcar, and TRAX projects. He focused on the flexibility and long-term adaptability of BRT over light rail. When he looked to the audience for insights, attendees made it clear that time and convenience were bigger barriers to ridership than cost.
The conversation then shifted to corporate and government incentives programs. Dan Hemmert explains how the State of Utah is re-engineering incentives to be more targeted both on and off the Wasatch Front, focusing a lot more on community impact instead of just performance. The state is going to target five key industries — finance, life science, manufacturing, tech, and healthcare — “dialing it down” and making sure companies have a net-positive impact on the community.
Commercial trends and insights
Lana Howell, managing director at Colliers Utah, moderated the final discussion, asking a panel of commercial real estate experts from Colliers International to give a three-word description of the most significant topic in each of their respective areas of expertise. Jarrod Hunt, EVP of industrial services, says “supply-chain constraints,” later elaborating how the tremendous wait times for construction and other materials as well as a workforce shortage are getting pushed onto consumers in the form of higher prices for food, apparel, and other goods.
Lori Coburn, VP, says “retailers adapt,” explaining that retailers who are willing to change business models and roll with the punches, especially during the pandemic, are the ones who are succeeding and even coming out ahead. John Peterson, EVP, also pointed to the effect of Covid, responding “returning to the office.” People thought in 2020 that nobody would ever go back to the office, but tours picked back up as early as January of this year as company leaders are trying to facilitate collaboration and culture among employees.
Mark Jensen, EVP and investment expert, says, “we need inventory,” referring again to the housing shortage and “insatiable investor demand in Utah.” With up to 17 percent rent growth, Utah needs more inventory and to address affordability, or it will lose its competitive edge.
The panel then focused on specific pain points in each industry, starting with transportation. Infrastructure plays a major role across all business types, whether it be commuting, distribution and delivery, retail ingress and egress, or transit-oriented development. All sectors seem to be feeling the effects of supply-chain constraints, with retailers unable to fully stock their shelves, office tenants facing major delays in tenant improvements, and multifamily developers unable to get appliances on time. Each sector has had to adapt to other challenges as well, including a labor shortage, increased land costs, a polarized national climate, and low vacancy, to name a few.
But the outlook is not bleak. Utah County weathered the pandemic better than any other area in the country. The availability of land, pro-business environment, and growing population have all worked to sustain Utah’s strong economy. Mark Jensen pointed out that “Utah is not just a right to work state, but a go-to work state,” praising Utah’s incredible work ethic and encouraging collaboration and forward-thinking.
He continued that history will look back on the Covid pandemic as a very innovative time. While Utah is not immune to global and national challenges, the economy is strong. If local leaders continue to proactively address the major issues that Utah faces and plan accordingly for growth, the future looks bright in “The County to Watch.”