November 21, 2018, City Council Meeting

Date:  Wednesday November 21, 2018 (11/21/18)

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Economic Development Analysis Summary

West Haven officials have been told by commercial developers for years that certain criteria need to be met in order to draw businesses to our city. One of those criteria is the number of “rooftops” or residential units in an area. As the Wasatch Front has been experiencing rapid growth, many have wondered where West Haven sits in its readiness and ability to draw and support commercial growth, particularly in the 21st Street interchange area.

 As part of the 21st Street master planning project, the city contracted with Zions Public Finance to conduct an economic opportunity analysis for the area. Their representative, Mr. Benj Becker, presented the findings of the analysis to our City Council in their November 21st meeting. Following are some of the main points of information that Mr. Becker presented that evening.

 1.     In general, retail conditions in Utah are changing dramatically, mainly due to the increased influence of online retailers. Traditional businesses in the clothing, jewelry, department store and toy categories are struggling. Businesses that are still doing well include grocery stores, eateries, automobile services, and “experience” stores. Experience stores are businesses where customers can try merchandise before they buy in a way that cannot be replicated online.

 2.     As businesses try to adapt to the online-shopping competition, distribution spaces are replacing some retail spaces. Eateries are focusing more heavily on delivery – a change that leads to needing less table space.

 3.     Location criteria that are important to retailers when they choose a location include strong traffic counts and good site access, daytime populations in the area (typically requires offices nearby), proximity to destination locations such as parks and stadiums that draw people to the area, demographic factors that indicate a population less likely to support online retail over traditional shopping, and growing population counts within ½ mile, 1 mile and 3 miles of the proposed site.

 Mr. Becker shared with the council some important information specific to West Haven. Nationwide, there are two major factors that are currently determining a city’s ability to attract commercial development. One is a federal program that incentivizes businesses and investment dollars to move into what are called “opportunity zones.” Opportunity zones have been designated nationwide based upon median income census tract data. Opportunity zones near us – in Ogden, South Ogden, Clearfield, and Layton – are drawing businesses that might otherwise be interested in locating in West Haven. Mr. Becker indicated that a $10 million investment in West Haven would be worth $12.5 million to an investor who went to a nearby opportunity zone location instead.

The second factor which greatly impacts a city’s ability to attract commercial development is the establishment of Community Redevelopment Areas (CRAs), which provide tax increment financing to incentivize development. When an CRA is established, the city, along with other taxing agencies, offers tax incentives to businesses that can be used to offset some of the up-front project costs. Mr. Becker explained that because West Haven City does not have a property tax, we have a limited ability to create an effective CRA at this time. This factor makes sites in nearby cities that do have CRAs more economically attractive to business investors than sites in West Haven.

 At the end of his presentation, Mr. Becker offered some information about a few factors that, although they are not as major as the two above, are within our ability to leverage. His suggestions include the following:

Market our strengths to potential investors.

* Potential for residential growth
* High median incomes (strong purchasing power)

Create a draw through the establishment of destination locations such as parks, trails, education centers, sporting facilities, and nature-based activities. Have specific branding for the area.Ensure that approval processes are not unnecessarily burdensomeKnow where we are “leaking” (this term relates to how much our residents spend in certain categories and how much of that spending occurs outside of West Haven) and target businesses in those categories.

 In conclusion, Mr. Becker emphasized that although there are some major factors which put our city at a disadvantage when it comes to attracting retail commercial to our city, there are steps that we can take to maximize the advantages that we do have. It was a very informative presentation and we look forward to utilizing the information as we move forward with master planning the 21st Street area and planning for the future of our city as a whole.

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