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Utah Business

Salt Lake City ranks as one of the worst cities for urban sprawl. So now, developers are looking westward for commercial development opportunities in Utah.

Investors look westward for commercial development opportunities

Utah is one of the fastest-growing states in the nation. As people flock to the state, the question is: Where will all these new people go?

Utah’s communities on the west side have been setting records for growth over the past decade, with South Jordan adding over 27,000 new residents and Herriman more than doubling in size. Rusty Bollow, EVP at Colliers, says that communities on the west side are growing more quickly than their east side counterparts because “that’s where there’s room to do it.”

While the last decade has seen tremendous development on the west side, there are still over 50,000 acres available for new growth. Those acres could make room for upwards of 350,000 new people if introduced to the market.

Utah will add an estimated 2.2 million people to the population over 30 years. Without rapid development, this influx of people could wreak Utah’s housing market havoc. Zach Beaudry, EVP at Colliers, has worked with multiple major national retailers looking for retail space in Utah’s rapidly expanding communities. And Utah is on the map, continuing, “It’s amazing how many eyeballs are looking at the Utah market, whether it’s developers, tenants, equity investors, or people that just want to relocate here.”

Beaudry says businesses are looking to move into new Utah communities at unprecedented speeds. “Places that look too green by developer’s standards are suddenly ready to go today,” he says. “Retailers and restaurants are saying, if we don’t go today, we’re going to miss out, and we might not get the right location in the trade area.”

The speed at which the state is growing means that today’s developers will play a significant role in determining the future of Utah’s thriving communities. With pressing questions of water usage, air pollution, and housing affordability to consider, what should these new communities look like? How can Utah create a thriving west side for future generations?

Following the water

As a desert state, water has been one of the most significant factors determining how our state was formed. When Salt Lake City pioneers entered the valley, they set up camp near City Creek and later chose it as a permanent settling place.

“We located, and we looked about, and finally, we came and camped between the two forks of City Creek, one of which ran southwest and the other west,” the first governor of the Utah Territory, Brigham Young, wrote. “Here, we planted our standard on this block and the one above it; here, we pitched our camps and determined that we would settle and stop here.”

As Utah residents spread out across the valley in the late 19th and early 20th centuries, most developments happened near City Creek’s water, snow runoff from the canyons, or the Jordan River.

“It takes less than 24 hours for a drop of water at the top of the Wasatch Mountains to reach a faucet in Salt Lake City,” says Laura Briefer, director of Salt Lake City’s Department of Public Utilities, speaking about Salt Lake City’s unique proximity to the water supply. “The drinking water sources are within a few miles of the water service area. Some water sources in other western states must travel hundreds of miles through aqueducts and other infrastructure to get to the large population centers.”

Increasing the population on the west side means figuring out how to support large numbers of people in areas with fewer water sources. Tooele County, which borders Salt Lake and Utah counties but stretches to Utah’s western border, relies primarily on ground wells.

As communities in the dry western region of the state grow, water infrastructure planning will be essential. Newer cities on the west side like Herriman, Eagle Mountain, and Saratoga Springs have utilized ground wells to support the city.

“One of the biggest challenges we’re facing currently in Utah with the growth is water,” Bollow says. He believes due diligence in determining where the water will come from before developing large areas on the west side is critical.

As the west develops further, new communities can implement innovative water policies, like water conservation technology and landscaping with native plants. Infrastructure to carry water from distant water sources will likely mean higher expenses. However, the incredible surge in demand for Utah living will offset much of the cost of providing enough water for everyone.

Easy access and transportation options

Strong communities can attract residential and commercial development, allowing new local economies to develop and support themselves. The Silicon Slopes area in Lehi has seen rapid growth in both residential and commercial developments in recent years. Easy access was one of the primary reasons for that success, Bollow says.

“[Silicon Slopes] can equally pull talent from Utah County and Salt Lake County,” he says. “If it was in Provo, the commute gets long for Salt Lake County residents.”

The success of the Silicon Slopes area highlights how easy access to other state regions contributes to the success of a new community. As new developments are added to Utah’s west side, easy access to other already densely populated cities is crucial.

Mass transit infrastructure is one of the critical components of making a new west side development more accessible. Historically, the majority of transportation in Utah is car-based. However, as new residents flood the state, roads and highways turn into traffic jams, and idling vehicles contribute to dangerous air pollution.

Mass transit minimizes the number of new cars on the road while allowing economies in new communities to grow and incoming residents can make a home in the state. When the master-planned community of Daybreak was developed on the western border of South Jordan, the connection to Salt Lake County’s Transit Express (TRAX) lines was a vital element of the new development’s success.

TRAX lines allowed Salt Lake County residents to relocate to Daybreak while easily commuting to jobs on the east side of the valley. Similarly, companies can set up offices in Daybreak and recruit employees from the east side. Travel in and out of Daybreak can be done without hitting extreme traffic or adding dangerous air pollution because the mass transit options are available and easy to use.

Housing density and housing diversity

Thriving communities foster their local economies, allowing residents to live and work in the area while also adding to tax revenue that can further improve the community.

However, attracting businesses to an area requires a certain level of population density. New developments must consider increasing the number of homes built within a certain amount of space by mixing small and large lots in new developments.

“You don’t want too much sprawl,” Bollow explains. “You want some open space, but you want to do it in a way that provides densities for a grocery store because grocery stores require so many rooftops within a certain proximity of their location to justify landing there.”

 Utah has a shortage of grocery stores, according to Beaudry. “Usually, grocery stores look at current population and population growth. A grocery store is a huge validation point for a market that there’s the business to be had for ancillary business, retail, and restaurants,” he says.

Bollow says grocery stores help draw other businesses to an area. “The retailers look at the businesses in place, the existing population, and the population that’s coming, and then they’ll either come or not come based on those metrics,” he says.

Low population density can also be a deterrent to retailers looking to move into an area where they can keep shipping costs down. The “last mile” of shipping a product to a customer is generally the most expensive part of shipping costs. But when customers live near each other, that cost burden can be shared, allowing retailers to be more profitable.

Not only does higher population density attract more business to an area, but smaller lot sizes also provide affordable housing options. New communities that expect to last long-term should be designed for diverse needs—affordability being one of the most important.

“We need to look at providing housing to accommodate all people,” Bollow says. According to him, a large tract of land should be developed with homes that can meet the needs of everyone—from first-time homebuyers to late-in-life retirees. A mix of affordable and luxury homes allows people across various industries to live and work in their community and throughout different life stages.

Today’s planning will determine what tomorrow’s communities look like. And as Utahans expand to the west as they did in the mid-18th century, thoughtful planning will lead to a thriving community.