"We have a vision of the next American economy, which we think is very different than the real estate-fueled consumption economy that crashed," says Muro, of Brookings. "It's one that's much more oriented to production of things, the export of things, it is driven by strong regional innovation systems and industry clusters, and because it exports, it isn't so determined solely by the U.S. business cycle. Utah epitomizes that."
Muro is especially impressed with the Utah Science Technology and Research Initiative, created in 2006 by Republican Gov. Jon Huntsman Jr. The program's goal is to enhance research and innovation at the state's universities, then pair that with businesses, making the universities into high-tech incubators of sorts. Another Huntsman initiative is using incentives to help attract "clusters" of industries of the sorts Muro mentions -- software, aerospace, the outdoor industry.
In the last year alone, the state government has given out more than $100 million in incentives to businesses relocating or expanding in Utah, including eBay, a Family Dollar distribution center in southwestern Utah, and Sephora and Hershey distribution centers. Over the past three years, the state incentivized IM Flash to the tune of $45 million; Goldman Sachs dramatically expanded its Salt Lake City presence with the help of a $47.3 million tax rebate; and Adobe and Morgan Stanley also drew from the state pot. More than $7 million in motion picture incentives were handed out last year, and the state also has strong rural development grants and renewable energy incentives.
Incentives fly in Utah, with support from some of the most conservative legislators, says Jeff Edwards, president of Economic Development Corporation Utah, a public-private partnership, because they aren't paid to the businesses up front. The state writes the check, usually in the form of a tax credit rebate, only after the business has settled in Utah and created a specific number of jobs with higher wages than the average for the area. The approach seems to be working. Utah has gained more than 24,000 jobs since August 2011, with the biggest gains in the manufacturing and "professional and business" sectors.
Ogden has used state incentives -- plus a generous offering of local cash and tax credits -- to help it attract its own branch of the state's outdoor industry gear cluster. Amer Sports, an international conglomerate that owns Salomon, Atomic, Wilson, Mavic and other big names, moved to Ogden in 2007 with about 110 employees. Amer received $2.5 million in state incentives, in addition to some $5 million in local tax credits and incentives, including naming rights to the city-owned Salomon Center. Quality Bicycle Parts, a huge wholesale distributor, received state incentives for locating in Ogden, and ENVE, which builds carbon-fiber bike parts, was offered $1.3 million to "inshore" more than 300 Chinese manufacturing jobs back to Ogden.
Mike Dowse, Amer's Americas general manager, says he was attracted by Ogden's proximity to outdoor amenities (such as federal land), the incentives and the direct flights to Paris from Salt Lake City's airport. There was also cheap housing for his employees, who have bought some 30 homes in the area (the median home price in Ogden is about half that in Portland, Ore.). Dowse was also drawn by the then-fledgling outdoor industry cluster in Ogden, which provides a larger labor pool to draw from, a more collaborative environment and adds energy and bodies to the "high adventure" visions of Godfrey.
Ogden's cluster got its start when Curt Geiger, then vice president of Descente North America, convinced the Japan-based ski-apparel company's higher-ups to move its headquarters from Denver to a downtown location in 2004. They were drawn not by state incentives but by the promise of a gondola, an idea being floated by Godfrey and others at the time, from downtown Ogden to the eastern side of town, with a second leg leading up to the slopes. Goode Skis soon followed Descente, helped along by free access to a lake near downtown, renamed Goode Lake, where it can test its water skis.
On a sunny September day, I slip away from the notebook and the interviews for a run through the streets and hillsides of Ogden. I head east from downtown, past the stately First Security building, which yearns for some ski or software company to come in and ease its emptiness, continuing toward the mountains, along streets lined with brick arts-and-crafts style bungalows in various states of disrepair that would easily fetch a half-million each in Boulder, Colo., but sell for a fifth of that here. I wave to a crowd milling in front of the Al-Anon place, and hear angry screaming from inside a rundown bungalow and wonder if I should call the cops.
Whatever's in Utah's secret sauce, one thing is clear: It hasn't been dolloped out to everyone. As much success as Ogden has had in bringing jobs to downtown, the greater metro area continues to have unemployment and poverty rates higher than its neighbors. Likewise, the Wasatch Front's prosperity has not trickled outward to many other parts of the state, where small isolated communities like Green River struggle chronically and now wait desperately for something, anything, even a nuclear power plant. And even as the state hands out millions of dollars worth of incentives to Wall Street giants, it is the worst in the nation at funding elementary and secondary education, a slap in the face to long-term economic prosperity.
The pavement ends and I head up a steep trail to a place where I can sit and look out at the gob of humanity that sprawls to the edge of the Great Salt Lake. It was not far from here that, 165 years ago, Brigham Young looked out onto this scruffy and treeless valley and saw it as the Promised Land, or at least decided it could be, with enough hard work. He knew that he couldn't simply unleash his minions and expect them to go forth and build a cohesive home in this hostile land. The Western frontier ethos wouldn't work here. They'd need guidance, cooperation and strong central planning to make the "desert blossom as a rose." Young never retreated from that, even when it got ugly: He forbade Mormons from selling wheat to Gentiles (though Gentiles could work for it), and in at least one instance failed to stop violence against Gentiles.
And then there's Matt Godfrey. He wanted Ogden to be the kind of place he would be happy to call home, a bustling downtown with young folks heading out on mountain bikes from not-too-expensive homes after a day at high-paying, professional jobs with outdoor gear companies. It took a lot of hard work, sacrifices and a sometimes-heavy hand from the government.
True, some of his efforts crashed: The gondola remains no more than a dream, as does the $14 million velodrome and the free-standing ice-climbing tower. Descente moved out into the suburbs and fired Geiger, who subsequently started his own downtown gear business. Even Envision Ogden, a nonprofit started by Godfrey and others to provide a non-governmental economic development organization, perished after it got caught up in a campaign finance scandal that's still under investigation.
Still, by nearly everyone's reckoning, Ogden's come a long way in the past decade. There are new jobs, great trails and a pleasant downtown peopled by a vibrant new community of folks drawn by the changes. Some of the credit goes to Godfrey, but mostly it's attributable to the paradoxical politics of Utah, a pragmatic if unlikely blend of free-marketeering and a pro-planning, Keynesian approach. Godfrey embodies that.
"I'm financially very conservative," says Godfrey, responding to those who have compared him to Joseph Stalin more times than he can count, "but I also don't believe in a free lunch. If we're not willing to invest in our own community, why should we have the gall to ask others to invest in our community? People were saying, 'It's a big gamble.' Yeah, it is, but doing nothing is a much larger gamble."
This coverage is supported by contributors to the High Country News Enterprise Journalism Fund
Jonathan Thompson is a senior editor at High Country News.