Utah’s economy is robust, attracting businesses from various industries and furthering its reputation as a business-friendly state. However, not all viable growth is associated with its dense population center. In recent years, state incentives like the Utah Rural Jobs Act (RJA) have sweetened the deal for companies looking to expand their workforce and footprint in rural areas.

The RJA was first signed into law in 2017 and renewed in 2022. The program supports businesses in rural Utah by providing flexible and affordable capital to create full-time, high-wage jobs. Eligible small businesses may receive up to $5 million in capital via a loan from an approved rural investment company.

The Governor’s Office of Economic Opportunity (GOEO) facilitates this program, and related key investments have made headlines in recent months.

‘A fantastic program’ 

Managing Director of Incentives and Grants Jim Grover says the targeted nature of the program positioned his organization and stakeholders for success.

“The legislature gave us a fantastic program where we can enter into agreements with investment companies,” he says. “These rural investment companies can raise up to $42 million of their own funding to land businesses in rural Utah. It’s a fantastic program in that you’d have access to capital and enter into a partnership with one of these authorized companies. Their names are Advantage Capital Utah Partners II, LLC; Enhanced Capital Utah Rural Fund II, LLC; Stonehenge UT Rural Fund I, LLC; and Utah Rural Jobs Subsidiary Fund, LLC.”

With a few success stories already, Grover says they’re looking to the second funding phase and anticipate similar results. This time, the program is limited to businesses in any Utah county except Davis, Salt Lake, Utah and Weber. The reason, he says, for the restriction is these are considered more populated regions and don’t meet the definition of rural.

Ultimately, it’s about using the funds as a tool to help select companies grow faster and create more opportunities for communities outside of the population centers.

“[The investment] of $42 million in rural Utah is going to increase capital and jobs,” he says. “The companies, at the time of investment, need to have fewer than 150 employees and have less than $10 million of net income for that preceding taxable year. It’s really focusing on the smaller companies that are ready to make that next step and grow.” 

Grover says the focus on industries ranging from aerospace to software development illustrates the breadth and depth of the type of companies that have put down roots in the Beehive State. At the same time, Grover believes one important facet of this program is building on past wins.

“The success that we have is because we’ve focused on areas of high growth and very specific targeted industries adding to our GDP,” he says. “One of Utah’s strengths is that we have such a diverse group of companies operating.”

This mix means that Utah isn’t hanging its proverbial hat on one industry alone to provide jobs and economic opportunity. For instance, agribusiness will round out the exposure and soften the blow if manufacturing takes a hit.

“There’s always going to be agribusiness — everyone’s gonna have to eat,” Grover says. “And so you’ll end up having a few industries kind of ebb and flow [due to the] cyclical nature of business, nationally and internationally.”

More jobs, more opportunity

Despite the recent economic uncertainty and higher interest rates, Grover says this program has produced quantifiable gains. To date, the program has netted 500 new, high-paying jobs — and that’s worth bragging rights.

“It’s a really big deal [when you consider] the fact that the jobs likely wouldn’t have occurred if there wasn’t increased capital,” he says.

Speaking of money, Grover says these jobs, by definition, are over the county average in terms of earning potential. This might just be the beginning of lifting Utah’s rural and working families in an intentional way.

“There are definitely going to be some [employers] that are going to be [paying] much higher than 100 percent of the county average wage as a lot of the types of jobs that we’re seeing are in the advanced manufacturing area,” he says. “Some of them are even defense contractors. It’s great to see the diversity that we have for job growth.”

Grover says his office is still crunching the numbers. He’s particularly interested in seeing the net benefit to Utah as these loans go out and bolster rural enterprises.

“We’re excited to see what kind of study we’re able to conduct with this information,” he says. “But as for right now, it’s all about counting jobs.”

The Utah Rural Jobs Act in action

Grover points to examples like Farmstead Manufacturing in Leeds to showcase how the new program supports economic gains. Farmstead Manufacturing is a commercial bakery that supplies croissants, donuts, danishes and pastries to cafes, hotels and wholesalers across Utah. Its retail arm — Farmstead Bakery — serves European-style bread and sweets. According to Advantage Capital, both entities are owned by Chris Connors and Li Hsun. 

At the end of 2023, Farmstead Manufacturing received a $1.75 million investment from Advantage Capital to support the land purchase and expansion of a commercial bakery from 1,000 square feet to 5,000 square feet. The expansion will support greater operations and distribution through wholesale, e-commerce and catering. The Farmstead Manufacturing commercial bakery is under construction and will open in the first half of 2024.

Per Advantage Capital, the facility will employ 25 full-time workers in Leeds once operational. The town is located off I-15, only 20 minutes from St. George. That means company officials plan to hire from the surrounding area, not just Leeds.

Before the loan, Farmstead Bakery had maintained a successful bakery located in the heart of downtown St. George. However, with the increase in volume came growing pains.

“As a company, we had a very difficult time keeping up with demand,” says serial entrepreneur and Farmstead Co-Owner Li Hsun. “Baking is a time-consuming art. Mixing and proofing and baking not only take valuable time, but baking 400 croissants a day also takes up a lot of space.”

According to Hsun, this funding will allow Farmstead Manufacturing to invest in larger equipment and strategically plan out their space to supply four to five additional Farmstead Bakeries as well as cafes, hotels and wholesalers throughout southern Utah. Hsun believes growth will beget growth and support their other business interests.

“This warehouse will be the epicenter of our future retail bakeries,” he says. “Everything will be baked within hours of being displayed and consumed at existing and future Farmstead Bakeries.”

In the meantime, Hsun says he’s bullish on what will come to fruition based on the financing. Farmstead is looking to open two more retail locations in 2024 and will also open a new concept, FS Coffee Co., in downtown St. George. The latter venture, a coffee shop, will roast all the coffee for future Farmstead Bakeries. 

Ultimately, Hsun hopes that the project will enhance the quality of life for residents in Leeds.

“A great bakery is a community gathering spot, and nothing beats a good bakery in a small town,” he says. “What we have lost in our society is the ability to sit down and get to know our neighbors, break bread with them if you will. In many ways, rural Utah and Farmstead Bakery go together like butter on a baguette. It’s a beautiful synergy.”