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GOED announces incentives for 1,250 new Utah jobs

Published: Thursday, Jan. 9 2014 3:45 p.m. MST

Mark Jonaitis, left, Vice President of Operations, talks with Governor Jon Huntsman during a tour of Varian Medical System's 268,000 square-foot manufacturing facility in Salt Lake City Monday, August 29, 2005.

Jason Olson, Deseret News Archives

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SALT LAKE CITY — The Governor's Office of Economic Development announced approval of two new tax incentives that could result in more than 1,200 new jobs.

On Thursday, GOED said Salt Lake City-based Varian Medical Systems is expanding its existing Salt Lake operation, a move that Varian estimates will lead to the creation of 1,000 new full-time jobs over the next 15 years.

Varian is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The company is also a supplier of X-ray tubes and digital image detectors for X-ray imaging in medical, scientific and industrial applications, as well as X-ray imaging products for cargo screening and industrial inspection.

“Varian’s X-ray technology manufacturing operations have been part of the Utah economy since the early 1940s,” said Dow Wilson, Varian’s CEO. “Today, some 70 percent of the orders for our X-ray products come from customers outside the U.S., making us one of Utah’s largest exporters.”

The expansion of the Utah facility will add 120,000 square feet to the existing 341,000-square-foot building. Varian expects to make an estimated capital investment of $40 million for new construction at the site.

The expansion will include a facility that will enable the company to perform a panel production process in-house that is currently being outsourced.

“The continued expansion of Varian Medical here will help to elevate Utah’s recognition around the world as a leader in research and development, and manufacturing of medical products,” Gov. Gary Herbert said.

The GOED board of directors approved a tax credit of $7.1 million in the form of a post-performance Economic Development Tax Increment Finance incentive, in anticipation of receiving more than $35 million from Varian in new state tax revenues over the 15-year life of the agreement. The company is also expected to pay out more than $400 million in new state wages over the 15-year period.

All of the jobs with incentives will pay at least 125 percent of Salt Lake County’s average annual wage, including company contributed health insurance.

The GOED board also announced plans for a distribution center in Tooele County to process freight and deliver products to consumers for Cabela's — a leading specialty retailer and the world’s largest direct marketer of hunting, fishing, camping and related outdoor merchandise.

The company is entering into an agreement with the state to create approximately 250 jobs, of which 85 will be contracted with the state to pay at least 100 percent of Tooele County’s average annual wage including benefits. The company expects the jobs to create more than $30 million in new state wages over the life of the decade-long agreement.

GOED estimates that the company will also pay approximately $3.4 million in new state taxes over the 10-year period. As part of a contract, the GOED board of directors approved a maximum cap tax credit of $693,198 in the form of a post-performance Economic Development Tax Increment Finance incentive, which is 20 percent of the net taxes Cabela’s will pay over the life of the agreement.

Email: jlee@deseretnews.com, Twitter: JasenLee1

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