Some numbers were up, some were down.
That summarizes fiscal year 2018-19 for both the Governor’s Office of Economic Development (GOED) and the Economic Development Corporation of Utah (EDCUtah) as it relates to corporate recruitment and retention efforts, although representatives of both organizations said the fiscal year was strong.
For the fiscal year ended June 30, GOED’s 19 corporate incentives are expected to lead to the creation of 6,121 jobs, down from 7,182 jobs from 15 projects awarded incentives during the prior fiscal year. Capital investment from projects awarded incentives in 2018-19 totals $1.09 billion, up from $644.7 million during the prior year. Wages from the projects are projected at $3 billion for the 2018-19 projects, compared with nearly $5.3 billion from the prior year. New state tax revenue is projected at $207 million, down from $273.2 million in the prior year.
Most of the projects are tied to incentives for high-paying jobs the incentivized companies are expecting to create over the next five to seven years.
The 19 projects “puts us at about the average that we’ve seen historically,” said Thomas Wadsworth, GOED associate managing director.
The projection for job creation is “a bit below where we were last year, above where we were the year before, so kind of in the average where we’ve been the past four to five years,” he said during a recent meeting of the GOED board.
The standout figure was for capital expenditure, or capex. The figure represents “a banner year for us,” Wadsworth said.
“A big portion of that was the Merit Medical project that came through with about a half-a-billion dollars, but another $500 million with the other 18 projects that we have,” he said.
Wadsworth described the fiscal year as “a pretty good year” but was chided by board members and staffers for being modest.
“We do hear from counterparts from all across the country that the market is soft, there’s no question about that,” said Ben Hart, GOED’s deputy director. “So, I think the year that we had was actually really good on a lot of levels, and I think keeping the pipeline moving with really good jobs, high-paying jobs, and a lot of capex is definitely a good target for us.”
During the June GOED board meeting, EDCUtah reported 33 project wins during the most recent fiscal year, but a rush in late June pushed that figure to 39. That’s up from 35 in 2017-18.
The organization is refining its other figures because of that late-June activity. The 33 project wins at the time represented 9,978 new or retained jobs, down from 11,558 the prior fiscal year; $1 billion in capital investment, down from $1.7 billion; and 2.1 million square feet of project space, down from 3.2 million. The $1.7 billion capex figure and square footage amount both were skewed by a single project: Facebook, which in May of 2018 announced a $750 million, 970,000-square-foot data center in Eagle Mountain.
The GOED and EDCUtah figures vary because not all projects EDCUtah works on go through the GOED incentive process. For example, while both organizations worked on the Facebook project, the company did not apply for an incentive through GOED. Another example, from the 2018-19 fiscal year, was Tyson Fresh Meats Inc., which will have a $286 million, 400,000-square-foot production/distribution facility in Eagle Mountain. EDCUtah counted that project’s expected total job-creation figure of 1,374, while GOED counted only 500 incentivized jobs.
At the GOED board meeting, Theresa Foxley, EDCUtah’s president and chief executive officer, said the 2018-19 fiscal year was “a great year” as the organization reached its job creation/retention goal of 10,000.
Foxley noted the Tyson project as the EDCUtah’s largest in terms of capex and square footage for 2018-19. That project “piggybacks off the Facebook investment,” she said.
“Our thesis was really validated through the Facebook project, where we believed that if they installed a significant amount of infrastructure, which they did, that other companies would follow on,” she said.
EDCUtah ended the fiscal year with 153 “active” projects, matching the prior-year figure.
On the organization’s website, Foxley described 2018-19 as “productive.”
“Overall, FY2019 was a big year for our organization. EDCUtah worked on several incredible projects, had marquee successes, and prepared for the future of economic development in Utah,” she wrote.
Among EDCUtah’s goals for the 2019-20 fiscal year is landing five projects for rural Utah, she told the GOED board.