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Special Report: Weber and Davis Counties

A special thank you to Angie Osguthorpe, president of the Davis Chamber of Commerce, for moderating the discussion.

Participants:

Mike Bouwhuis, Davis Applied Technology College

Chad Buttars, Utah Executive Real Estate

Mike Caldwell, Ogden City

Roger Christensen, Bank of Utah

Chris Falk, Newmark Grubb ACRES

Rob Lindsey, Cushman & Wakefield/Commerce

Bret Millburn, Davis County

Brad Mortensen, Weber State University

Scott Paxman, Weber Basin Water Conservancy District

Timothy Pehrson, Intermountain Healthcare

Brandon Rawlins, JLL

Darren Rogers, Utah Department of Workforce Services

Dana Slaughter, Ogden-Weber Applied Technology College

Eric Smith, CBRE

Bob Stevenson, Layton City

Sara Toliver, Visit Ogden

David Webster, Davis Conference Center

 

What is the overall economic outlook in our area?

CALDWELL: For four of the past five years, Ogden has been rated as one of Forbes’ 20 fastest growing cities in the United States. Having grown up in Ogden through the ’80s and ’90s, I don’t think anyone would have believed we were going to turn the corner like that.

MILLBURN: Weber County and Ogden have been focused on the outdoor industry. But that’s started to trickle down into Davis County with Cabela’s. On even a grander scale, in the Station Park area is the construction of the corporate headquarters for Vista Outdoors, which is ATK’s conglomeration of outdoor companies. That’s a Fortune 500 company that’s located right here in Davis County. It’s the beginning of many great things that are coming down the pipe.

CALDWELL: The outdoor piece is unique because it’s lifestyle based. Typically you locate in places where people can get out and ski, ride their bike, fish, hunt or whatever they want. But that has resonated with other companies like Home Depot and Esurance and a lot of these others that have relocated into Ogden. The lifestyle piece played more into their decision than just about anything else. It was equal to workforce. In a global economy that really matters; now you get to choose where you can live, work and employ your talents.

RAWLINS: Level 9 Sports, headquartered in Woods Cross, just acquired a mountain bike cycling component to add to its business. That’s huge for the Legacy Park trails. You’re going to see a lot more of those bike shops. There was also another startup that came out of Weber State called Climate. Climate is an outdoor apparel company that’s located in Centerville right next to the Legacy trail as well.

PEHRSON: We’re seeing a tremendous amount of growth in the community as witnessed by the fact that we just broke ground on a new hospital in Layton. And we’re committed to open up a brand new beautiful sports and orthopedic center in Ogden. We just opened a clinic here in Kaysville. The University of Utah is putting resources down in Farmington. So the healthcare providers are responding to the growth both in the population as well as in the businesses.

When businesses are deciding whether to locate here, the questions they ask are: Is the education great and is there good healthcare? If you get those two things right and you have a wonderful location like we have in both Weber and Davis County, you have a winning combination.

What are our greatest economic strengths? What is being done to capitalize on those strengths?

MILLBURN: Our greatest strengths are our people. Our location is another strength—our proximity to great transportation options, I-15, Legacy, the airport, and great infrastructure that we have.

BOUWHUIS: The fact we live in a beautiful environment is so attractive for a lot of people. The environment, low energy costs, low taxes, all of those things come to together, and we’re poised to grow dramatically over the next few years.

PAXMAN: A big one is Hill Air Force Base and all the economic growth that it brings to both Davis and Weber counties. And the legislature just announced the Doppler building that’s going to house some high-level education-type positions, engineers, scientists. That will be a great benefit of the whole area.

CALDWELL: I would add the diversity of our economy. It’s not focused on any one industry. Like Vernal, you get the oil boom that comes and everyone is making crazy money and every hotel room is rented out. And then you get a hiccup or a bubble that you can’t control and it completely wrecks the economy. When we went through the recession it was tough on everybody. But because we had a lot of diverse manufacturing, advanced manufacturing, distribution centers, STEM-oriented careers related to Hill Air Force Base, all of that really stabilized that boom and bust.

BOUWHUIS: We’re working very hard to transform educational/industrial partnerships. We demonstrated through the aerospace initiative that what we need is articulated curriculums starting in the junior year of high school. And then using the summer to educate kids for the company or at an ATC. And then go on to Weber State and get that degree, and the company generally pays for that.

There are drivers in the economy that are really causing that to happen—3.5 percent unemployment means almost full employment. So we have to focus on those who are underemployed and make education easy for them to obtain. But the biggest source of workers is high school students.

We need to do more and more of those articulated programs that are hard wired between the high school, the ATC, and the university system. It works.

ROGERS: We have a consortium between Weber and Davis counties through our economic development teams, where we bring in the tech colleges, the university and private industry. It’s called Northern Utah Workforce Development Alliance, and we are working with education and private industry to understand the needs. We do surveying of employers to find out what their projections are for the next 10 years so we can all work with private industry, education, and get that information out to that emerging workforce.

What is the current state of residential, commercial and industrial real estate markets in both Weber and Davis County?

FALK: Last year there was over 300,000 square feet in new class A office space that was brought to market. There was a big concern about not being able to fill that, but it filled to capacity overnight. With those pending, it’s over 90 percent occupied and absorbed.

I’m dealing with three or four companies right now who want to occupy a similar type of footprint in the next six to 12 months, so they can’t wait for new construction. New product doesn’t exist. Two of those projects I mentioned were speculative. A couple of groups took a chance and bet on Davis and Weber, and we performed. But now for those groups that are looking, we may not get them. We’ve almost done such a good job from the county’s standpoint in addressing all the things we’ve talked about—the lifestyle, the cost of business—that we need some new products.

LINDSEY: The class A new stuff is being filled up very rapidly. However, in Weber County we’re still at 18 percent vacancy rate for office space, and that’s mostly to class B and C space. There’s a great opportunity for some creative developers to go in and rehab some of the old spaces and create something interesting and unique—second generation space instead of the brand new buildings that are coming online.

CHRISTENSEN: On the residential side, prices are going up pretty rapidly. And some of the higher-end homes have been developed well. It’s that lower-end home that’s a quality home for first-time homebuyers that we’re beginning to lack in this area. People are having trouble finding houses for those first-time homebuyers. Anything under $200,000 hardly exists anymore. The first-time homebuyer, they’re getting driven further and further out of the area.

There’s a lots of apartments going up, and the apartments have been filling up just like that. We’re financing quite a few. It’s great for the bank.

CALDWELL: Ogden has got a pretty unique housing stock in that it is older. We’re in redevelopment versus development. That being said, realtor.com and Zillow recognized Ogden as the sixth hottest housing market in the United States right now, in part because it is so affordable and people can find homes there. The medium home price is probably less in Ogden than any other surrounding city in Weber or Davis County.

We have some neighborhoods that were at one point 80 percent rentals, and they just turned into substandard, unsafe units. So we’re very excited to see young families moving in, dropping roots, stabilizing neighborhoods, and rehabbing some of those really unique older Craftsman style homes.

STEVENSON: There is somewhat of a negative attitude toward apartments, especially in Davis County. We have to turn this attitude around, showing that you can build very nice apartment complexes that are very, very desirable.

FALK: Some cities in Davis County—Layton, Farmington, Centerville, Ogden—have done a really good job of this. They’ve had a really positive outlook on multifamily development. Cities need to step back and understand the full economic picture when it comes to real estate values in general. The definition of housing is no longer a single-family, attached 2,500-foot home. Cities that have been really accepting of multifamily development have really seen an economic stimulus. The rest of commercial real estate flows thereafter. That’s where you see the big office products, that’s when you see the retail portion come in.

MILLBURN: We’re faced with a huge growth in our population. We’re expected to double here along the Wasatch Front by the year 2040. That’s why we are putting so much effort in planning for the future—our water, our electricity and particularly our infrastructure.

Let’s talk about some notable construction projects. And the retail sector—how is that faring?

RAWLINS: WinCo has finally announced they are going to be opening just off the Layton Parkway exit. They just started digging on that. The retail side, with WinCo and Cabela’s and all these different things, is really coming.

MILLBURN: Within Davis County, Smith’s Marketplaces are popping up everywhere. One just opened here in Kaysville, and you’ve got one up on West Point that’s being built. Woods Cross at 2600 South—they’re redoing all that. It’s not just the store itself, but it’s everything else that’s coming around it—restaurants, small offices and dentists, and things of that nature.

CALDWELL: We’re moving out some of the big-box retail that was so popular for so long. People want a more intimate connection and a little more diversity in what they’re seeing.

TOLIVER: It shows how important it is to shop local too. One of the great things we have in Ogden is the independent nature of so much of our dining, retail and entertainment. It’s a reminder for all of us to support those local businesses in all of our communities because of the percentage of dollars that stay within your community.

LINDSEY: We’re seeing a slow down, in my opinion, on retail because of online sales. Now on the flip side, the order fulfillment centers are booming. Especially those that can marry the two together—have brick and mortar and their warehouse in the back—are doing exceptionally well.

STEVENSON: In Layton, our sales tax will be above our high in 2007, before the recession. Our mall area is booming. The growth taking place throughout the community has been unreal. We have to keep these brick-mortar buildings going, because if they start to shutdown, then you end up with vacant buildings. And when that happens, it creates a problem no matter what community.

In the mall, where we had the old Sports Authority, an interactive aquarium is going in that location. This is an example of being smart with intermixing things—when the aquarium opens, we’ll have entertainment in the mall. You guys have the theaters in the Newgate Mall to draw people. But these are the types of things that bring people in, and then people have a tendency to turn around and shop.

WEBSTER: The aquarium, Farmington Station, all of that’s leading to tourism and bringing dollars from the outside in. We’re providing such value in this northern area of Utah with the amenities, the mountains and the bike trails, and with the ability to build a business and have your company here. We’re poised for great things.

The aquarium will be bringing people in from Idaho and Wyoming and from all over the place. Frankly Oregon and Washington don’t have aquariums like this. You can swim with rays and sharks. You’ve got to go to Hawaii for that—or Layton.

That leads us into tourism. What is happening on that front?

STEVENSON: Stop and think about the entertainment aspect. You’ve got Lagoon, Cherry Hill, ski resorts, the mountains, the trails, golf courses, Antelope Island. Within a 20-mile radius, you basically cover the whole gamut of what somebody could spend a good week doing.

We have plenty of hotels for people to stay in. We have an airport that’s 30 minutes away. And we still have the Ogden airport that’s now picking up some commercial flights. Every one of the elements is there. And the most important part of it—we’re not expensive.

MILLBURN: In Davis County we stepped back and really analyzed and maybe changed our thinking a little bit on how we market our tourism. Let’s really stop and look at our strengths and where our real marketplace is. We drew a radius of about 300 miles. So you’ve got Southeast Idaho and Wyoming and other parts of the state that bring people here. Then we’re also looking at how can we package things together? You’re in Southeast Idaho and you need to do back-to-school shopping—come to Station Park and while you’re here go to Lagoon or the aquarium. It’s really understanding the market.

TOLIVER: We have a lot of room to grow with awareness of Weber and Davis counties on a national or even international level, but one of the great opportunities has been the national championship events. They’re great for our group business market, and it’s also been an amazing opportunity to market our destination to a target demographic of outdoor recreation enthusiasts who oftentimes travel with their families and are looking for things for the entire family to do.

On the conference side of things, it’s added the recreation-related conferences, so that we’re able to expand beyond just what’s been our bread and butter of state associations and corporate business and some of those things that we’ll always continue to work on.

PEHRSON: Historically, the reason a lot of people lived in Davis County is because it was close to Ogden or Salt Lake. But we now have a county that has 320,000 people in it with a projected growth over the next 20 years of 50,000 new people. More and more we’re seeing families want to actually stay here—they want to work, shop and have access to entertainment here. Sixty-five percent of the residents in Davis County leave Davis County for healthcare. That’s amazing. Compare that to Weber or Utah counties, it’s 20 percent. Salt Lake County is about 15 percent.

Let’s talk about Falcon Hill and what’s happening with the aerospace industry.

SMITH: Falcon Hill took a large amount of collaboration to be able to get that project going. It’s something that is really unique, and it’s allowing the base to be redeveloped. Federal funds are basically nonexistent to redevelop facilities on the base, but it’s happening at Hill Air Force Base and that’s going to allow that base to grow and flourish rather than potentially not be here anymore.

We’re getting a lot more activity on the base now. The second commercial office building on the base will be full within a few weeks. We are also working with two groups, one that wants to build a 100,000-square-foot industrial building off the base and another group that wants to build a 50,000-square-foot flex building off the base. So we’re getting not only development activity on base but off the base. There’s 500 acers of commercial development that can happen there. And that development will not only help with more jobs outside the fence, but also inside the fence with more companies and more contracts.

CALDWELL: An eyeopener for me was that the ecosystem of support that’s on and off base. They told me they have 6,000 individual vendors that participate in what goes on on the base that are outside of the fence that you don’t hear about—23,000 employees.

We’re very lucky to have that F-35 program there. Basically the federal government doubled-down on what’s happening here in Northern Utah with Hill Air Force Base. You can never say anything is BRAC proof, but it’s in as strong of a position as it’s ever been.

Higher education is a key component of our development. What are we seeing from that end?

MORTENSEN: At Weber State, we’ve had 50 percent growth in the last five years of the number of our engineering and engineering technology and computer science graduates. That’s not even keeping up a smidgen with the demand that’s happening at Hill Air Force Base and the aerospace industry and all of those areas.

We’re racing as fast as we can in preparation of students in the earlier levels, junior high and high schools. We have our partnership with the Northern Utah Academy for Math Engineering and Science here at our Davis campus to try to help expand that pipeline. There’s a new program the legislature just approved this year where the higher education institutions will work with the ATCs on stackable credential programs, where students have that hardwired path from a certificate to an associates to a bachelor’s degree.

We have our new Tracy Hall Science Center building that will be opening fall. That’s a state-of-the-art science building, and the theme of it is really to have science on display. There’s DNA coding and the Fibonacci sequence. And all of the laboratories have windows in them.

PEHRSON: The healthcare industry in general has a great partnership with Weber State and the ATCs in providing healthcare workers—great nursing program, great tech programs, great CNA programs, Rad tech, Med tech. We have a great partnership because these folks need places for their students to do actual practical work and we can use that as a training ground.