July 12, 2012

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Utah County Doing Well, But Faces Growing Pains

Di Lewis

July 12, 2012

Economic development and infrastructure changes are bringing more people and businesses to Utah County, but the area is hitting a few roadbumps on the way to growth, according to a panel of local leaders at a Utah Business roundtable Wednesday morning.

New construction and rentals in residential and commercial properties are on the rise, said Wilford Clyde, president of Clyde Companies, Inc. New homes are being built, and Utah Valley University and Brigham Young University are adding new buildings.

The National Security Agency (NSA) data center—which is still under construction—is also bringing in many other businesses, said Russ Fotheringham, Utah County economic development manager for EDCUtah. “This infrastructure development that has gone on, we’re now going to start reaping the benefits of that,” he said.

Andy Shimberg, VitalSmarts CEO, said he was concerned about whether he would have the employee base and supply partners needed in Utah County. However, he said there wasn’t a problem. Not only is the employee base “smart and engaged,” but the company isn’t seeing people job hopping like they would on the East Coast, he said.

However, all of the development comes with a cost. The higher concentration of tech companies in the county means they are all competing for the same employees. That shortage results in some smaller local companies moving or going out of business because they aren’t able to compete with large companies for high-tech employees, said Roger Andrus, director of the UVU Business Resource Center.

More than three-quarters of engineering graduates from Brigham Young University and Utah Valley University are moving out of state for jobs, said Fotheringham. Enough students are graduating with the degrees local companies want—they just aren’t staying in the state.

Utah County also faces the stigma of being a non-diverse, conservative area, said Colin McMullin, general counsel for IM Flash Technologies.

Aribex President and CFO Ken Kauffman said they have a challenge getting people to come from Salt Lake to Utah County because of that stigma. So the company has considered relocating to Lehi or American Fork to recruit people willing to commute from Salt Lake.

He said, “I believe that there’s a lot of the workforce in Salt Lake that maybe looks down a little bit. ‘Wages are lower in Utah County. I can’t make as much money there. It’s too conservative and doesn’t fit the way I think.’ I think there’s still a big cultural divide between the two areas.”

John Garfield, general manager of the Provo Marriott Hotel and Conference Center, said that stigma also hurts tourism. Part of the problem is many Utahns talk down the state and the county, giving visitors a poor perception of the scenery or culture. “But tourists that come here and are just amazed,” he said.

Despite the hurdles Utah County faces, Joel Racker, Utah Valley Convention and Visitors Bureau president and CEO, said what’s happening overall is positive, with the I-15 rebuild, FrontRunner South nearing completion and several large business construction projects in the works.

“I joked to somebody that with Mitt Romney we’re having our ‘Mormon Moment,’” he said. “And I said that Provo and Utah County are having a ‘Provo Moment’ right now, because things are just really happening in our county.”

The Utah County roundtable will appear in the September issue of Utah Business magazine.

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