Temperature Not the Only Thing Heating Up Southern Utah

John Cottom, president of the Industrial Brush Corp., first heard Gov. Gary Herbert speak at a time when Utah’s budget needs exceeded projected revenue. As a California businessman accustomed to tax increases, Cottom was surprised when Herbert asked state agencies to cut expenses instead of calling for a tax increase.


“That’s not how government operates in California,” Cottom told an audience of more than 900 business, government and civic leaders during the “What’s Up Down South?” session of the Washington County Economic Summit in St. George’s Dixie Center last Thursday.

Cottom said he found the Beehive State’s business-friendly environment and the support of government leaders in Dixie to his liking and decided to relocate Industrial Brush and 80 percent of its workforce to the Fort Pierce Industrial Park. The company held a ribbon-cutting this week for its $6 million, 52,000 square foot building there.

Industrial Brush was one of three companies to announce St. George-area relocation or expansion plans during the summit, which has become the premier business event in southwest Utah, promoting economic development in the region while attracting leaders from across the state for a day filled with keynote addresses, economic reports, breakout sessions and networking events.

KPI Concepts, Inc. President Craig Upton also announced that his West Burlington, Iowa company will expand its operations in 2015 with a new location in Hurricane. The company designs and manufactures custom wood laminate store fixtures. Environmental Stoneworks General Manager Gaylen Hunt said his company plans to build a $2.5 million manufacturing facility in Washington County, most likely in the Fort Pierce Industrial Park. Final site selection will be made in February. Environmental Stoneworks is the only national manufacturer and installer of stone veneer.

“We are thrilled to have these companies locating in Washington County and will soon announce a number of other expansions and relocations here,” said Scott Hirschi, director of Site Select Plus, formerly the Washington County Economic Development Council, which puts on the annual summit.

Hirschi described the Site Select Plus name change as a step to emphasize the organization’s role as a private-public partnership that recruits new business to the area and helps local businesses expand.

“Our former name said ‘government’ in flashing lights,” he explained. “We wanted to convey as much as possible that we are not a council and not a government agency. We are a partnership for economic development in southwest Utah’s sunbelt.”

Over the decades of economic booms and busts, Washington County leaders have worked to diversify the economy. Hirschi said the economic summit is a showcase of that diversity and a platform for further economic expansion.

“We’re often thought of as a retirement community or a center for tourism, but Washington County is much more than that,” he added. “However, we still need to be more diverse, and that is our focus at Site Select Plus. We work to support existing businesses, retain jobs, help local businesses expand and recruit primary industries to the area.”

Once in the throes of the recession, the Washington County economy has rebounded nicely. Department of Workforce Services Senior Economist Lecia Langston told summit attendees the Dixie economy is now in the “Goldilocks zone,” growing at a rate that is “just right” rather than too hot or too cold. Job growth is near the long-term average of 5-6 percent. “The level of employment is almost back. We’ve almost dug ourselves out of the hole,” she added.

Construction and education/healthcare were the biggest job gainers year-over-year in the county. Construction jobs are still about half of what they were during the economic bubble, but almost back to the pre-bubble days, according to Langston.

“I am bullish on the Washington County economy,” she concluded. “Nothing in the data, at this point, suggests any deterioration in the economy.”

Similar positive sentiments about the state’s economy were expressed by Zions Bank President and CEO Scott Anderson and Cicero Group founder Randy Shumway during their breakfast keynote addresses. Anderson noted that Utah’s unemployment rate has beaten the national average for the past 12 years and said the power to grow Utah’s economy rests in three important tools: collaboration, partnerships and state capitalism.

During the commercial real estate breakout session moderated by EDCUtah Chief Operating Officer Todd Brightwell, local real estate executives expressed optimism for Washington County’s commercial real estate sector in 2014. The retail, office, investment, industrial and multifamily commercial markets, they said, all saw year-over-year gains. In the retail market, vacancy rates have declined while unanchored lease rates have increased. One dark spot: capitalization rates are down, primarily due to low interest rates fueled by the federal government’s bond buying program.

Meanwhile, the retail market is expected to backfill most of the available mid-box spaces, and new grocers are expected to enter or expand in the market by securing sites near the residential growth areas. In the office market, lease rates have increased as vacancy rates have declined. Washington County’s industrial market was the most active in 2013; however, it has been challenged by a lack of product, especially for buildings greater than 50,000 square feet. “Nearly everything out there is sold or leased,” said Ray Rosenthal, industrial specialist with Coldwell Banker Commercial.

Industrial construction is expected to ramp up in 2014, but the current lending environment may hinder speculative building in the commercial sector. Rosenthal said lenders want 50 percent of a building pre-leased before they will loan money for construction. “That will put a damper on things,” he added.

The summit’s Jones Waldo Luncheon Presentation featured a keynote address by two noted Utah lobbyists, Frank Pignanelli and LaVarr Webb, who offered their thoughts on “Politics vs. the Economy.” Afterward, the audience peppered the two speakers with questions regarding the County My Vote ballot measure and other hot topics.

The summit wrapped up with a bonus session called “Vision Dixie,” where local officials presented their annual report of progress in the long-term vision for ensuring Washington County’s quality of life in the coming years.