Salt Lake a good fit for tech

Salt Lake City is on the "short list" of cities west of the Mississippi attractive to information technology companies looking to flee the cost-prohibitive California market, according to new information from a New Jersey-based corporate location consultant.

The Boyd Co. Inc., whose clients include JP Morgan Chase, PepsiCo and the World Bank, compared 18 California cities and 12 western and central U.S. regional locations in the cost of operating a 35,000-square-foot, 125-worker information technology facility. Among the cities surveyed, Salt Lake City was the fifth least-expensive city, behind Tucson, Ariz.; Omaha, Neb.; Oklahoma City; and Sioux Falls, S.D.

The firm ranked the cities based on operating costs including Class A office lease rates, utilities, corporate travel and the cost to retain skilled or educated workers.

John Boyd Jr., consultant with the Boyd Co., said the cities chosen for the study either house large concentrations of information technology operations or, in the case of Salt Lake, are "those cities that we're projecting will be on the short list of our clients looking to expand or relocate in the years ahead."

"There really is today an unprecedented preoccupation, an unprecedented focus on reducing costs at all levels of corporate structure, because of a softened economy, because of free trade," Boyd said. "The result of this borderless economy we live in today is an increased competition, an increased focus to be cost competitive.

"It's no longer enough for companies here in Salt Lake to be cost competitive with rivals in San Diego or Boston or Chicago. Now you must be focused on being competitive with your competition in Portugal or in Canada or Asia."

That "preoccupation" has brought smaller cities into the mix like never before, Boyd said. Cities like Sioux Falls and Omaha. Cities that will now compete with Salt Lake City for IT jobs.

"Over the course of the last several years, it's no secret that companies have been fleeing California," Boyd said. "The major beneficiaries of this have been Denver, Phoenix and Las Vegas, and those cities have become victims of their own success. By virtue of attracting so much industry, they're now experiencing inflationary wage pressures, inflationary real estate costs. So now, our clients are looking beyond the usual suspects."

Compared to San Francisco, the survey's most expensive city, a client in Utah could save about $2 million annually, the study found. Total annual operating costs in Salt Lake City were estimated to be $10 million. In Sioux Falls, those same costs came in at $9.4 million.