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Salt Lake City: America's new cover story.

Salt Lake City America's New Cover Story

IF Salt Lake City were a person, it could perhaps best be described as, no not Perry Como, but more of a young, rising star like Demi Moore or even Jay Leno.

Salt Lake City Mayor Palmer DePaulis says the city is a variety of people. "It's a community that's diverse ethnically and socially. It's a city whose personality is the compilation of many ethnic backgrounds."

The description of a rising star might better describe the current economy of Salt Lake City. U.S. News & World Report said Salt Lake City was "An economic ace and one of 16 newly bright stars in the U.S. economic sky" (November 13, 1989).

Diversity Brings Prosperity

Why this glowing economic report card? Perhaps the reason can be best stated in one word: Diversity. Over the past six years, Salt Lake has been moving away from a reliance on heavy industry, such as mining, steel, and military expenditures, and working to attract service sector businesses, telecommunication companies, biomedical firms, aerospace manufacturing firms, corporate headquarters, and banking and financial institutions.

While mining was once Salt Lake's largest industry, with Kennecott playing a leading role, today the city's top employers are the University of Utah, the LDS church, First Security Corp., LDS Hospital, Questar Corp., Unisys, and Utah Power and Light.

The city's top industries parallel the state's top industries: trade, manufacturing, government, transportation/communication/public utilities, and finance/insurance/real estate.

As DePaulis wraps up his second term as mayor, Salt Lake City's economy is on an upswing. In the mid-eighties, however, Salt Lake's economy was "cooling," and the new mayor realized that an economic development effort needed to be launched throughout the entire county to get the economy back on track.

A City with a Plan

So DePaulis gathered a "Blue Ribbon" committee to develop a plan to diversify the economy, attract new business, and address other community concerns. The plan that was developed in June of 1987 was the first phase of "Salt Lake City Tomorrow." This six-point plan identified everything from establishing a Downtown Development Council to assigning neighborhood liaison officers in City Hall.

"We went out into the community to decide what we wanted to be when we grew up," DePaulis says. "I tried to sell the idea that as a community we have to do strategic planning, that we can't sit back and just let things happen."

Mayor DePaulis is credited with having aggressively courted new business and with diversifying the city's economy away from basic manufacturing. DePaulis is the first to admit he hasn't done it single-handedly, however, but with the help of other community leaders.

"I'm part of the team," he says. "We have to cooperate with the state and county and other organizations. We're all inter-related; we're not isolated."

One of the six points listed in phase 1 of the Salt Lake Tomorrow plan, was to support a regional public-private economic development policy partnership: the result was the Economic Development Corp. (EDC) of Utah. EDC brings together resources and commitment of the area's municipalities and private-sector businesses. An emphasis has been placed on unifying the economic development efforts of all groups involved. DePaulis credits this one act with doing more to diversify the area's economy than anything else.

Attractive Incentives

Salt Lake's economic development cheerleaders often offer incentives to attract new business to the area. The recently created $10 million Industrial Assistance Fund is one of the incentives being offered to entice McDonnell Douglas to bring more MD-80 subassembly work to its Salt Lake City plant. And both state and city officials have a reputation for using a "hands on approach" to attract new business.

Other incentives used by the city to attract new business are tax increment financing, subsidies, and industrial revenue bonds. DePaulis points out that many tools previously used as incentives have been taken away, curtailed by the federal government.

Boosters highlight four points when selling Salt Lake as a place to do business. These selling points are labor (young, educated, and plentiful), the area's relatively low cost of living (during the first quarter of 1991, the cost of living in the Salt Lake metropolitan area was 7.9 percent below the national average), accessibility (whether by train, plane, or automobile), and the exceptional quality of life (we have it all--arts, education, and recreation).

Baby Boom Isn't Over Here

Salt Lake City's and Utah's labor force is known for being the youngest in the nation. Utah's median age is 26.2 compared with the national median age of 32.9. "The baby boom never stopped here," Fortune magazine proclaimed in its October 22, 1990 edition.

And the abundant labor force is known for being well educated. Utahns have the highest literacy rate in the nation. And Utah continually ranks first in the nation in the percentage of high school graduates qualified to take advanced placement college exams.

For new employees to the state, a free, tailored training program called "Custom Fit" is offered. The state provides the custom-fit training programs to help meet the demand for a trained workforce for new and expanding businesses. The program is taught by community-college faculty and out-of-town experts.

Salt Lake City has 27 elementary schools, five intermediate schools, three high schools, plus a number of alternative programs. With the University of Utah (the largest state-funded educational facility in the state, with 25,000 students), Westminster College (an independent and privately funded liberal arts institute), Salt Lake Community College, and business and technical colleges, opportunities for advanced education are abundant.

The Good Life

The low cost of living in Salt Lake means residents can afford to buy homes. The average price of a home in Denver hovers at $105,186, while Salt Lake City's average home price is $83,780. But most of the homes available in Salt Lake City are older; the newer home developments in the city are located in the Rose Park area and in the foothills.

As the world headquarters for the Mormon church, Salt Lake City is home to a large population of Mormons. But many other religions flourish in the city including the Buddhist, Catholic, and Jewish faiths.

A Transportation Hub

Accessibility is touted as one of Salt Lake's favorable characteristics. Salt Lake City's international airport is served by nine major airlines, with 850 planes taking off and landing and non-stop service to 68 cities daily. It is no wonder that Salt lake's airport is the 25th busiest in the nation and the 45th busiest in the world.

When Delta Airlines established its western hub in Salt Lake, it meant not only increased air traffic, but construction of a $9 million training facility and a $25 million aircraft maintenance hanger. Delta is one of the city's largest employers, with 3,500 employees.

The airport's master plan projects that passenger traffic will double by the year 2006. Planners are already preparing for the increase in traffic with the current parking expansion and enlargement of the baggage claim area in terminal No. 2. Future airport expansion plans include installing a range-control tower and constructing a third runway west of the existing terminal buildings.

Other transportation advantages that make the city the "Crossroads of the West" include the convergence of Interstate 80 and Interstate 15 in Salt Lake.

Add to this about 120 interstate and intrastate motor freight carriers with headquarters or terminals in Utah, allowing shippers to move products easily, and you have easy access.

The service Amtrak, Union Pacific, Rio Grande, and Western/Southern Pacific railroads provide completes the intrastate transportation needs businesses require.

Within the city and county, the Utah Transit Authority provides public transportation, and a proposed light-rail system could further enhance the city's transportation needs (see "An Issue for Voters: Light Rail Transit" on page 47).

Recreation and the Arts

When it comes to quality of life, words like recreation and the arts are frequently mentioned. Salt Lake has seven ski resorts within an hour's drive of an international airport.

Salt Lake also has the Utah Jazz; Ballet West, one of the top 10 ballet companies in the nation; the Utah Symphony, one of the country's top 10; the Utah Opera; professional theater; modern dance troupes; an International Hockey League team; college athletics; dozens of nearby canyons, lakes and reservoirs; and close proximity to five national parks.

This mix of artistic and recreational opportunities adds up to an attractive quality of life. And Salt Lake City's art community plays an important role in that quality of life. Research for the Salt Lake Tomorrow plan showed that the public believes the arts are one of the downtown's strongest suits.

The arts in Salt Lake City are thriving, and projects like Artspace, an old warehouse that has been converted into studio and living space for artists, are booming. According to Artspace Executive Director Stephen Goldsmith, Artspace currently can't meet the demands for studio and living space, even with six new units being added. "If we added 50 more spaces, they could be filled," Goldsmith says.

The popularity of Artspace is proof, says Goldsmith, that west downtown is a great neighborhood for housing and mixed use. "The more we can establish a genuine arts district and show how that plays into a cultural plan, the more we can establish Salt Lake as a cultural destination," Goldsmith explains.

An Oasis in the Recession

Salt Lake's future looks bright as the city's economy continues to flourish while the nation recovers from a recession. Utah's unemployment rate is 5.2 percent, compared to the national rate of 6.8 percent. U.S. News & World Report listed Utah as one of six states the publication termed "America's Little Dragons," states that were prospering while other states were struggling. As Utah's capital city, Salt Lake is closely tied to these healthy indicators.

Another sign of Utah's and Salt Lake City's prosperity is an 8.4 percent growth in personal income during the first quarter of 1990: the seventh-fastest growing state in the nation.

This growth hasn't gone unnoticed by the rest of the nation. Salt Lake City was ranked by Fortune magazine as the No. 1 city in America for business in terms of available, educated labor. The May 1991 issue of The Economist said, "None [of the southwestern states] is having more success in diversifying than Utah."

Growth Expected to Continue

During the 1990s, Utah is expected to grow at a rate of 1.3 percent per year making it the eighth fastest-growing state in the nation. Salt Lake Valley's population is expected to double by the year 2030. Utah's AAA rating from Moody's and Standard & Poor's (only eight states have this ranking), means that governmental services and infrastructure investment can continue to expand without tax increases.

Construction in Salt Lake City is already heading forward at a fast pace. The 20,000-seat Delta Center, a $40 million project, is due to open this fall. Continental Airlines recently opened a new reservation center in the former Eastern Airlines Center. (About 400 employees work at the center, but the company plans to hire as many of 1,500 in the next two years.) Renovation of the former Hotel Utah is continuing at a steady pace. The reshaping of Block 57 is well underway. And just around the corner the Broadway Centre--a $24-million, 14-story office and entertainment complex--is being constructed.

And the list continues. The Salt Palace Convention Center will soon undergo remodeling. Mars Inc. is constructing a $10 million, 240,000-square-foot warehouse and distribution facility. And, in addition to its existing plant, McDonnel Douglas is looking at Salt Lake as one of eight cities in which to build a final-assembly plant for the next-generation jumbo jet. (The plant would generate 6,500 to 12,000 new jobs, plus four times that number in supplier industries.) The Utah Department of Community and Economic Development is actively working with Salt Lake City Corp., the Salt Lake Airport Authority, and the Salt Lake Redevelopment Agency to lure the plant to Salt Lake City.

How will this growth affect the city's services? Can the city's infrastructure handle this growth? And how will this growth affect the city's quality of life?

Salt Lake City's infrastructure should be perfectly able to handle the anticipated growth. Mayor DePaulis says all the systems are in place to handle the anticipated growth. The city has adequate water and sewer lines, and there is currently 25 million square feet of office space in the city. (Office vacancies during the first quarter of 1991 were 18.3 percent.)

The projected growth isn't expected to have a major impact on Salt Lake City's school district because most newcomers are moving to the suburbs. "The growth will more likely impact the surrounding districts," says Jan Keller, a spokesperson from the school superintendent's office. "We could actually accommodate more students now."

Balancing the development and quality of life issues is something with which DePaulis takes a proactive approach: Rather than let growth dominate, he says, the city must plan ahead.

"As we grow, we want to make the right moves," DePaulis says. "But the question is how do we handle it, not whether we can handle it. How do we expand our business, the job sector, and income and not destroy our quality of life? It's walking that fine line between preserving the good things we have and growing and developing. If we're not going forward, we're going backward."

The Salt Lake City Tomorrow plan continues to serve as a blueprint for the city's future. Phase 2 addresses four primary issues: neighborhoods, leadership and regional cooperation, government services and responsiveness, and reliable and adequate revenue resources.

Salt Lake City will face a number of challenging issues in the coming decade--issues such as transportation and parking, housing, the growing number of homeless citizens, and an increasing commuter population.

The Daytime Crunch

Commuters nearly double the population of the city on weekdays, causing additional strain on city services. Salt Lake City's day-time population is about 300,000, compared with the resident population of nearly 160,000.

According to Skip Daynes, president of the Downtown Merchants Association, people feel a lack of adequate parking is one of the biggest challenges currently facing downtown retailers.

But Daynes says three solutions are being looked at to resolve the parking situation. "Block 57 will have some parking for retail, and the city is looking at adding some diagonal parking," he says. "It's also possible that a light-rail system could help alleviate the problem."

Dayness says the recent rejuvenation of the downtown area has retailers thinking on a more positive note. "The street vendors, the carriages, and the brown-bag concerts have improved the ambience of Salt Lake," Daynes says. "And activity like this is important to merchants."

The Downtown Alliance, which fosters economic activity downtown and acts as a single voice representing the area, is conducting a survey of merchants to determine additional concerns.

The small, non-chain retailers who were adversely affected by the decision to locate Crossroads Plaza across from ZCMI in the early 1980s have different concerns from the merchants located in the malls.

Richard Hazel, director of business development for the Salt Lake Area Chamber of Commerce, surveyed merchants in the Pioneer Park area and found that most of these merchants' concerns were over the increasing transient population and security needs. After all the survey data is compiled, the Alliance will analyze the data and identify the major issues affecting merchants. But overall, Hazel says the downtown area "needs more attractions to keep visitors for longer periods of time."

Another challenge Salt Lake City faces is community cooperation. "We need to come together as a community, in a consensus, to achieve well thought out strategic plans and goals that everybody buys into," DePaulis says. "That, to me, will make the difference between a city that really goes places and a city that just fumbles along."

Nancy Volmer is director of communications for the Park City Chamber/Bureau.
COPYRIGHT 1991 Olympus Publishing Co.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Title Annotation:the economy of Salt Lake City is up-and-coming; includes article about Block 57 district and an article about the Downtown Alliance
Author:Volmer, Nancy
Publication:Utah Business
Date:Oct 1, 1991
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