State development office is busy, potentially fruitful

Only a couple of years old, the Governor's Office of Economic Development has been busy and potentially fruitful — to the tune of 10,000 new jobs from economic incentives granted to companies.

Michael Nelson, executive director of GOED's incentives and business recruitment, told a legislative committee on Wednesday that about $77 million in incentives approved for 28 companies ultimately could lead to 10,000 new jobs, new state revenue of $476 million, capital investment of $2.7 billion and new wages of $4.6 billion over the next decade.

A relatively new tool, a tax rebate program, has proven extremely popular. During the past fiscal year, 14 companies were approved for up to $38.3 million in rebates but could eventually create 3,960 jobs, produce new state revenues of $224 million, $914 million in capital investment and more than $2 billion in new state wages over 10 years.

Nelson said recipient companies can get rebates of up to 30 percent of new state income, corporate and sales taxes they generate — for example, $3 million in rebates on $10 million in new tax revenues — and they receive the money only after they've created the revenue or put the promised high-paying jobs in place.

Among the companies the state has landed is Amer Sports Corp., which has consolidated its Suunto, Salomon and Atomic brands in downtown Ogden after getting approval for state incentives of more than $7.9 million and a city incentive package of nearly $4.2 million. About 230 jobs have come to Ogden as a result, and the company is expected to be a magnet for more companies, Nelson said.

From initial "humble conversations," bringing Amer Sports to Utah took many meetings and visits, he said.

"Not only do we just sit at our desk and hope that somebody's going to call us and say, 'Hey, we're looking at at this state and want to look at you' — and that does happen — but we actually work proactively to bring these key companies to the state," Nelson told the Workforce Services and Community and Economic Development Interim Committee.

Another long-term deal with Barnes Aerospace retained 350 Utah jobs and could result in 1,200 workers for the company in Ogden.

Ogden Mayor Matthew Godfrey said he used to cold-call CEOs, participate in trade missions and encourage Silicon Valley people to put satellite operations in Utah. But those efforts were fruitless because the right incentive programs weren't in place. That's different now, he said.

"We are nowhere near the top as what other states offer, but we're at least in the game and competitive enough that we can win some here and there," Godfrey said.

Jeff Edwards, president and CEO of the Economic Development Corp. of Utah, which is contracted to recruit companies on behalf of GOED, said the public often misunderstands incentives programs, believing that companies simply receive a big check from the state. "That's just absolutely not true," he said. "The dollars are not paid (to the company) until the revenues are realized in the state and are given back in a rebate format."

While Utah has many acknowledged attributes, including quality of life, Edwards said the state still battles negative misperceptions fostered by the national press and others. He said that if people read The Wall Street Journal and watch "HBO programming, then you get a very different view of what's really going on here."

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E-mail: bwallace@desnews.com

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