Kraftmaid Plant Closing is Painful, but Tax Incentives Did Not Go to Waste

Having worked so hard to bring them to Utah in 2004, it was upsetting to hear of Kraftmaid Cabinetry's decision to idle its Salt Lake County manufacturing plant and lay off its remaining employees. While this impact will be significant in 2009, we have every indication that they will return as the Western residential market improves. Tom Burdett, of West Jordan City, notes that "Kraftmaid will maintain the facility and keep over $100 million in high tech manufacturing machinery to hopefully one day re-open the facility."

This situation also points out a positive side of the changes made in economic development policy in the last few years. Under the new rules, the state tax incentives that Kraftmaid received were "post-performance" and therefore did not go to waste. Incentives granted by the Governor's Office of Economic Development (GOED) require that certain criteria be met before the incentives can be received, and for the most part those targets were not reached. They also remain in place as an added incentive for the company to reopen in Utah. To learn more about the Kraftmaid plant closure read this article published by the Salt Lake Tribune.

Let me also remind you of our Holiday Open House tomorrow, Dec. 17, from 4-6 p.m. here in our EDCUtah office. I hope to have the opportunity to personally wish you a Happy Holiday and a prosperous New Year. Details about the open house can be found on the invitation here.

EDCUtah is enthused about the first event of the New Year: our yearly Entrada event, which takes place in conjunction with "What's Up Down South," the yearly economic development conference in St. George. We hope you can attend this excellent opportunity and get involved in all the positive economic development work going on in the southern part of our state. Event details are as follows:

Entrada
Tuesday, Jan. 13, 2009, from 6 to 8 p.m.
Entrada @ Snow Canyon Country Club
2537 W. Entrada Trail, St. George
www.golfentrada.com

Due to the holidays, the next edition of this Economic Review newsletter will be published the week of December 29th. This will be our "Year in Review" edition and will cap off all the work we as partners in economic development have accomplished.

Today's Economic Review also includes links to many of the ED-related news stories from the past week. As always, if you have comments, suggestions or topics you'd like to see in the Economic Review, please contact us by clicking the "Comments" link on the bottom of this page. Enjoy!

Jeff Edwards
President and CEO

Monthly 'Project Update Report' Will Provide EDCUtah Members with Exclusive Insight into Project Activity

As a growing member-based organization, EDCUtah places a high priority on ensuring that its investors receive tangible benefits for their investments. However, EDCUtah has grown by 30 members during the past year and some of the newer members may not be aware of the many benefits available to them, says Art Franks, EDCUtah's director of membership development.

"What's more," he says, "we are about to roll out a new benefit in January and want to be sure our members know about this exciting new service."

Project Update Report

Franks is referring to EDCUtah's new Project Update Report, a monthly report that will contain exclusive information for members about recruitment projects in the pipeline, new projects, major activity within the past 30 days, new companies looking at Utah, details about project wins and losses and contact information for the various business development managers working on the projects. The first report will be published in January.

A report of this type was initially suggested by Bill Martin, EDCUtah executive committee member and co-managing partner of the commercial real estate firm Commerce CRG. He suggested that members could benefit by having access to greater detail regarding EDCUtah's economic development activities. Consequently, in January EDCUtah members will receive the first monthly e-mail notice when the report is available online and a link to where it may be downloaded.

"The Project Update Report will provide our members with timely, accurate insight into EDCUtah's economic development activities," says Jeff Edwards, EDCUtah president and CEO.

In addition to the new Project Update Report, Franks says there are many other benefits available to members, including the following:

Networking events

Research center

Industry intelligence

Direct referral opportunities

Networking

Michael Flynn, EDCUtah's vice president of public development, says many of EDCUtah's members joined for the networking opportunities.

"Our roster of members includes many of Utah's most successful businesses and public organizations," Flynn says. "EDCUtah events provide excellent opportunities to network with influential CEOs or top-level management from both the public and private sectors."

EDCUtah events primed for networking include its annual meeting, the holiday open house and quarterly investor update meetings. The quarterly investor meetings were specifically designed for networking. They provide members with the opportunity to receive updates about project activity and typically include conversations with representatives or executives from businesses recently recruited to the state. Flynn says the representatives generally tell about their companies, the nature of their relocation or expansion plans, the types of facilities involved, why they are coming to Utah, the key factors in their decisions and the types of services they will need during and after the relocation or expansion.

Additional networking opportunities exist for members that serve on EDCUtah's executive committee, the central governing mechanism for the organization, and the board of directors, which represents a cross section of all members, public and private.

Research Center

EDCUtah's research center houses one of the largest economic data libraries in the state and includes the latest information on business incentives, labor statistics, real estate, taxes, utility rates, demographics, and much more—and it's available exclusively to all members. Flynn says the data can be repurposed upon request for member use in the form of customized reports or analyses, such as operating cost comparison models, economic impact studies, demographic studies and local and national business lists.

Industry Intelligence

In addition to its library of economic data, EDCUtah also maintains industry intelligence and metrics that can be valuable for members assessing developing markets. Furthermore, EDCUtah's intelligence reports provide members with a heads-up regarding company relocation or expansion announcements.

Direct Referral Opportunities

Companies looking to relocate to Utah or expand in the state often have needs that they fill through local services, like local construction companies, real estate brokers, attorneys and more. When EDCUtah receives requests for vendor or supplier names from clients, it passes those referrals on to its members to give them the first opportunity for business.

"The direct referral program really pays off for or members because the companies we recruit tend to use our investors for the services they need," Flynn adds.

To find out more about the member benefits mentioned in this article, contact Art Franks, (801) 323-4242, or e-mail him at afranks@edcutah.org.

In The News

Economic Development Headlines from the Past Week

eBay brings computer center to Utah

- Online auction giant eBay has decided to build a $334 million computer center in the Salt Lake Valley, state and company officials said Monday. (Salt Lake Tribune) (Deseret News) (KSL) (Business Week)

State courts major new ATK manufacturing facility

- The Governor's Office of Economic Development (GOED) Business Development Board approved an Economic Development Tax Increment Financing (EDTIF) incentive for a new ATK manufacturing facility. For decades, Utah has been home for several ATK divisions and Utah wants to be proactive in securing this potential major new plant and the 800 full-time positions it will create over the next 20 years. (Utah Business Magazine) (Deseret News)

Local aircraft support company to expand service

- The Governor's Office of Economic Development (GOED) Business Development Board met today and approved an Economic Development Tax Increment Financing (EDTIF) incentive for Keystone Aviation, LLC, doing business as HondaJet Northwest. (Utah Business Magazine)

Utah 'Entrepreneur of the Year' named by Utah Valley forum

- John Edwards of Move Networks was named Utah Entrepreneur of the Year on Thursday by the Utah Valley Entrepreneurial Forum during its annual UVEF Awards. (Deseret News)

Ski campaign: Sandy pitched as 'ultimate base camp'

- Chris McCandless is a backcountry skier and a Sandy City councilman. "Besides the beauty and majesty of that kind of day, what a huge economic benefit," McCandless said. "I don't believe there's anywhere in the U.S. like Sandy, where you can live or stay, and be at a world-class ski area in 15-20 minutes." Consequently, Sandy City, its business community and the resorts -- led by Snowbird -- are pitching the city as "the ultimate base camp" for vacationing skiers. (Salt Lake Tribune)

Solar farm nears completion

- Workers installed the last of 466 solar panels at a new solar farm in Bloomington on Tuesday, as officials prepare to plug into the state's largest solar-energy project. Through a joint program of St. George's Energy Services Department and Dixie Escalante Power, coined "SunSmart," local residents can purchase a one-kilowatt "unit" on the solar grid through a one-time payment. Each unit would generate energy equivalent to 15 percent of the average home's monthly power usage. (The Spectrum)

Economy split between metro, rural areas

- The economy in Utah (and Davis County) is starting to split. According to Mark Knold, Chief economist for the Department of Workforce Services, there's a split in economic situations when comparing major metropolitan areas (including Davis County) and the remainder of the state's "rural" economies. Knold stated that history has shown a uniformed increase or decrease in the economy between the two areas. However, short-term economic standings between the metro and rural areas of the state show that economy can play tricks in certain areas of the state. (Clipper Today)

Winter season starts brightly for area motels and inns

- The holiday season is shaping up as a festive one for local motel managers, many of whom are reporting an upsurge in business. Carol Gibson, manager of the 64-room Holiday Inn Express, said occupancy rates at her motel have been running around 75 percent, compared to 60 percent for the month of December last year. (Tooele Transcript Bulletin)

Winter sports: Olympic Park to host international events

- Alissa Johnson, Lindsey Van and the rest of the native Utahns on the U.S. women's ski jumping team will be among the international cast of athletes competing in a four-day series of skiing and skeleton events at the Utah Olympic Park starting Thursday. The women are fighting to be allowed to compete at the 2010 Vancouver Olympics - the International Olympic Committee has kept their event out, citing low worldwide participation numbers - but will provide a preview of their sport's first world championship event next year in the Czech Republic during a Continental Cup event Friday and Saturday at 5:30 p.m. (Salt Lake Tribune)

BYU's graduate accounting program ranked no. 1 in nation

- Accounting professors from across the country selected Brigham Young University's graduate accounting program as best in the nation -- unseating the University of Texas-Austin, which had held the top spot for more than a decade. (Utah Business Magazine)

KraftMaid to lay off 813 in Utah

- Christmas may not be so merry for 813 people at KraftMaid Cabinetry in West Jordan who were told Thursday that the company plans to shut down the manufacturing facility two days before the holiday. Masco Retail Cabinet Group, manufacturer of KraftMaid cabinets, said in an e-mail Thursday to the Deseret News that the company is consolidating manufacturing operations and will idle operations at its West Jordan plant, beginning Dec. 23. (Morning News)

Logan incomes 2nd lowest in Utah

- Logan residents' median household incomes are nothing to brag about, according to a recently released U.S. Census report. The city's median household income is $33,007— second lowest in Utah among cities with populations of 20,000 or more. That's just above South Salt Lake, which came in last at $31,868. (Herald Journal)

Utah 5th in analysis of states' health

- Rio Tinto to lay off 14,000 worldwide
Mining goliath Rio Tinto Group, parent company of Kennecott Utah Copper, said Wednesday that it plans to reduce its net debt by $10 billion by the end of 2009 and cut 14,000 jobs worldwide. (Deseret News) (Salt Lake Tribune)

Utah's small businesses feeling recession

- Utah's small business index is the lowest it's been since 1990, when economists created the index. Economist Kendall Oliphant says the latest figures indicate Utah hasn't escaped the national economic crisis. (KCPW)

CALENDAR

Dec. 17: Holiday Open House 4 to 6 p.m. at EDCUtah

Jan. 13, 2009: Entrada at Snow Canyon Country Club; reception 6 to 8 p.m.

Jan. 14: Washington County Economic Summit, 7 a.m. to 2 p.m., Dixie Center, St. George, UT www.whatsupdownsouth.com

Jan. 15: Utah Commercial Real Estate Symposium, Salt Palace Convention Center, Room 255. Register here.

March 24-26: JEC Composites Show (Paris, France) http://www.jeccomposites.com/jec-show/

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