EA officials suggest Utah consider offering incentives to technology companies

Published: Wednesday, July 21 2010 8:12 p.m. MDT

Gov. Gary Herbert tries out a life-sized version of the Monopoly car as EA Salt Lake celebrates the opening of a new development studio in downtown Salt Lake City Wednesday.

Jason Olson, Deseret News

SALT LAKE CITY — Utah's governor and several state senators received boisterous applause Wednesday during grand opening ceremonies for an office of Electronic Arts, the world's second-largest video game publishing company.

Standing among children's toys and LED screens displaying family-friendly games, the Utah government officials also got an earful about why the state should start offering tax incentives to technology companies in order to bring other large companies, and jobs, to the state.

EA government affairs director Craig Hagan said other parts of the country, such as Texas and Florida, and Canada's Vancouver and British Columbia, are offering rebates on corporate income tax of up to 42 percent to companies like EA.

"We're not competing with traditional brick-and-mortar business in Main Street," he said. "We're competing against other digital media companies across the world."

Hagan added that the average wage for a game-industry employee is $92,000 a year. The industry is larger than the Hollywood box office and music combined, bringing in about $20 billion worldwide every year, he said.

The 20,000-square-foot office, generally tightly secured, was opened to other building tenants and employees' families Wednesday for a rare look into game production. Standard cubicles had multiple screens, and a life-sized stuffed alligator hung from the ceiling. Nearby, decorations such as a bright-green desk fan and huge beanbags rounded out the playful space while magnetic white boards full of multicolored sticky notes adorned the walls.

Despite not receiving tax incentives, EA moved from its offices in Bountiful and has been operating in new quarters for three months. The number of employees has grown from 30 to about 100 over 10 years, and more expansion could be in the works, said John Dean, executive director of the studio.

"Making fun takes a lot of passion and hard work," he said.

The studio is using an agreement with Hasbro to develop games featuring pets and Nerf guns for children and families. The label's goal is to provide entertainment to audiences outside the traditional video game demographic of young adult males. This holiday season, it hopes to unveil an electronic version of Monopoly for multiple gaming systems.

EA wanted to expand in Utah because of the state's strong education infrastructure, its history with technology, a welcoming government and high quality of life, Dean said. But other places in the world have all of those things plus tax incentives.

Members of the Governor's Office of Economic Development said there are some incentives available to businesses like EA but the company did not use them. As a group, they believe Utah is on the cusp of reaching a critical mass of technology companies. Once that mass is reached, they hope the industry will boom.

"All the components are now here," said Spencer P. Eccles, GOED executive director.

Gov. Gary Herbert also noted that Utah has been ranked highly among states in terms of places to work and places to start technology companies.

Legislators at the party said there are not any plans in the works to start an incentive program for the technology sector, but they were willing to listen to EA executives about the issue.

The state already provides incentives for the film industry.

e-mail: rpalmer@desnews.com

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