Economic slowdown: Forecasters say Salt Lake City will ride out crisis
By Derek P. Jensen
The Salt Lake Tribune
Salt Lake Tribune
Article Launched:10/22/2008 12:06:51 AM MDT
The fundamentals of Salt Lake City's economy are wobbly but sure to stand up straight soon.
Such is the forecast by economists, planners, developers and business leaders who say Utah's capital is
well-positioned to withstand an economic slug despite the financial chaos gripping much of the country.
"Although we will feel that bump, it will be very slight here," said Frank Gray, the city's community and economic
development director, predicting the two coasts and Midwest will be hammered much harder.
"You have high-end commercial property that has less risk than the suburban areas," explained James Wood,
director of the University of Utah's Bureau of Business Research. "And you have [the $1.5 billion] City Creek coming."
The diagnosis was part of a dialogue called by the City Council to assess the city's economic health in the face of a
recession and continuing market meltdown.
Lane Beattie, Salt Lake Chamber president, said two weeks ago at a meeting with other business boards in Florida, "I
almost felt guilty, almost" about delivering the only "glowing" report.
Beattie pointed to the dozen downtown cranes as "mascots of progress," and reported 9.5 million hits on the
Downtown Rising Web site.
And Jeff Edwards, with the Economic Development Corporation of Utah, noted four "significant" commercial-property
inquiries hit his desk within the past week.
"It's a really interesting phenomenon with the financial markets in chaos," Edwards said.
The news reassured a council that nonetheless anticipates an upcoming budget crunch due to reduced tax revenues.
"What I heard is it's not as bad as it could be," said Council Chairwoman Jill Remington Love.
To be sure, the housing slump, liquidity crisis, bond defaults and tightening lending guidelines have hampered
growth. Doug McDonald, an economist and consultant for the Utah League of Cities and Towns, says taxable sales
are down 50 percent from last year while residential building permits are off 18 percent in the city, 35 percent
countywide. By mid-year he said, new hires slid while unemployment claims shot up.
"We're going to be flat next year, but this doesn't account for all the financial stress if it continues."
Despite the overall enthusiasm, "For Lease" signs permeate downtown and its fringes, "For Sale" signs collect
cobwebs on front yards, and longtime local merchants like a photo shop and a rug gallery on Main Street recently
closed their doors after decades in business.
Still, out of 1,800 subprime mortgages recorded in the city, Wood notes just 7 percent are in foreclosure. But, he said
the capital's average home sales prices are down 1.4 percent, pricey downtown condos could become temporary
rentals, and Utah's second-largest homebuilder is in bankruptcy.
Betsy Burton, a Local First Utah board member, argued the city's best investment would be in local businesses. She
called on the council to let Local First representatives have input on key boards as well as Redevelopment Agency
decisions.
"You have a sympathetic council here," assured J.T. Martin.
Bob Farrington, the city's new economic development director, said the downturn should create opportunities. He
outlined the capital's plan to trot out a small-business initiative that streamlines the permit process.
He and Gray also pledged to upgrade ordinances, improve the city's business climate, tap lending programs for
businesses, and boost the city's marketing.
And, despite the slowdown, the team is targeting specific projects that include: A Broadway theater, foreign trade
zone, streetcar system, convention hotel, public market, new energy companies, developed transit hub, North Temple
corridor and neighborhood business districts.
The city's economic development braintrust conceded their staff is meager, but insisted everyone in the division is
effectively part of the team.
djensen@sltrib.com
By Derek P. Jensen
The Salt Lake Tribune
Salt Lake Tribune
Article Launched:10/22/2008 12:06:51 AM MDT
The fundamentals of Salt Lake City's economy are wobbly but sure to stand up straight soon.
Such is the forecast by economists, planners, developers and business leaders who say Utah's capital is
well-positioned to withstand an economic slug despite the financial chaos gripping much of the country.
"Although we will feel that bump, it will be very slight here," said Frank Gray, the city's community and economic
development director, predicting the two coasts and Midwest will be hammered much harder.
"You have high-end commercial property that has less risk than the suburban areas," explained James Wood,
director of the University of Utah's Bureau of Business Research. "And you have [the $1.5 billion] City Creek coming."
The diagnosis was part of a dialogue called by the City Council to assess the city's economic health in the face of a
recession and continuing market meltdown.
Lane Beattie, Salt Lake Chamber president, said two weeks ago at a meeting with other business boards in Florida, "I
almost felt guilty, almost" about delivering the only "glowing" report.
Beattie pointed to the dozen downtown cranes as "mascots of progress," and reported 9.5 million hits on the
Downtown Rising Web site.
And Jeff Edwards, with the Economic Development Corporation of Utah, noted four "significant" commercial-property
inquiries hit his desk within the past week.
"It's a really interesting phenomenon with the financial markets in chaos," Edwards said.
The news reassured a council that nonetheless anticipates an upcoming budget crunch due to reduced tax revenues.
"What I heard is it's not as bad as it could be," said Council Chairwoman Jill Remington Love.
To be sure, the housing slump, liquidity crisis, bond defaults and tightening lending guidelines have hampered
growth. Doug McDonald, an economist and consultant for the Utah League of Cities and Towns, says taxable sales
are down 50 percent from last year while residential building permits are off 18 percent in the city, 35 percent
countywide. By mid-year he said, new hires slid while unemployment claims shot up.
"We're going to be flat next year, but this doesn't account for all the financial stress if it continues."
Despite the overall enthusiasm, "For Lease" signs permeate downtown and its fringes, "For Sale" signs collect
cobwebs on front yards, and longtime local merchants like a photo shop and a rug gallery on Main Street recently
closed their doors after decades in business.
Still, out of 1,800 subprime mortgages recorded in the city, Wood notes just 7 percent are in foreclosure. But, he said
the capital's average home sales prices are down 1.4 percent, pricey downtown condos could become temporary
rentals, and Utah's second-largest homebuilder is in bankruptcy.
Betsy Burton, a Local First Utah board member, argued the city's best investment would be in local businesses. She
called on the council to let Local First representatives have input on key boards as well as Redevelopment Agency
decisions.
"You have a sympathetic council here," assured J.T. Martin.
Bob Farrington, the city's new economic development director, said the downturn should create opportunities. He
outlined the capital's plan to trot out a small-business initiative that streamlines the permit process.
He and Gray also pledged to upgrade ordinances, improve the city's business climate, tap lending programs for
businesses, and boost the city's marketing.
And, despite the slowdown, the team is targeting specific projects that include: A Broadway theater, foreign trade
zone, streetcar system, convention hotel, public market, new energy companies, developed transit hub, North Temple
corridor and neighborhood business districts.
The city's economic development braintrust conceded their staff is meager, but insisted everyone in the division is
effectively part of the team.
djensen@sltrib.com
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