There is demand for industrial park real estate in Morgan County, and the county should be looking into making it easier for new businesses to use such space, said Better City, the county’s economic development consultant.
The site most suitable for future industrial park development in Morgan County is on 125 acres near the recycling center, property currently owned by the Clarks and the Thackerays, said Ryan Hunter, Better City director of economic development.
Morgan City Mayor Ray Little wasn’t surprised at the location, saying it has been identified for years as a prime spot for industrial development. “My intuition is it is a good spot,” Little said, noting that sewer trunks have already been brought to the land.
By definition, an industrial park is more than 100 acres with good freeway access and utilities at the site, or “ready to build,” Hunter said. “They want to come in and have everything ready to go.” Needed utilities would include power, gas, culinary water, sewer and phone.
The cost to extend the road to the site and other “soft costs” such as fees to bring the industrial space to the “level that meets market returns” would cost $1.5 million in public participation, Hunter said.
“Along the Wasatch Front, $1.5 million is not a big deal,” said Morgan County Councilman Austin Turner. “But we really don’t have that kind of a slush fund at all. That is pretty extreme to us.”
Better City anticipates the county playing a role in future industrial park development, as well as a private developer. Most times “projects wouldn’t pencil” if private developers had to bear the cost of infrastructure alone, said Adam Hughes, chief operating officer with Better City. Therefore, the county should consider paying to bring all utilities to the industrial park site.
Grants and loans are available for such purposes. The Morgan County Council voted July 1 to allow Better City to seek grants to pay for predevelopment studies of industrial park space such as soil samples, design, cost to extend utilities, surveying and engineering elements.
Government leaders voiced approval of the move to seek grant money for predevelopment studies.
“I understand the concerns that we don’t have funds as a county to move forward,” Councilwoman Tina Kelley said. “But we are constantly saying ‘economic development.’ If we don’t take the small steps to move forward, economic development will not come. We need to utilize what funds we have available through grants. I understand those are taxpayer dollars, but I would like to see some of that come back to Morgan.”
“I can’t speak to how soon and with whose dollars on what piece,” future industrial development would take place, Little said. “The piece closest to the utilities would be the first to come in. It would take someone that likes Morgan saying this piece is good for me, and be willing to pay money for utilities.”
“We have been needing and wanting industrial space,” Little said. “We need to start somewhere.”
Seeking a grant is just the first step in a long process, Hughes said.
“We are in the very first couple of possessions in the first quarter of a football game,” Hughes said. “We have to determine the framework for the park, levels of public and private participation, determine costs and what other areas are developable.”
Better City will also be seeking a grant to study the feasibility of a hotel at Como Springs since plans for a hotel on Commercial Street fell through.
The height restrictions passing under the railroad could pose a problem for oversized loads and future development of any kind, Morgan County Councilman Lyle Nelson said.
But Hunter said the demand for industrial space is increasing in both the nation and the state. Nationally, forecasts put industrial space demand at a 7.6 percent increase in 2014, Hunter said. Because Utah’s manufacturing output is 8 percent higher than the nation’s, demand for industrial space is higher, he said.
The state demand would spill over into Morgan County, Hunter said. Based on unemployment rates and the current supply of industrial space in Morgan, Hunter estimated a demand for 20,000 square feet of industrial space in Morgan in 2014 and another 20,000 square feet in 2015. In the next 10 years, that could mean Morgan needs a total of 200,000 square feet of industrial space, Hunter said.
Currently, Morgan County has 366,000 square feet of existing industrial space near the Mountain Green airport. Of that, 15,000 square feet, or a “pretty limited supply” is available, Hunter said. “There is a demand for industrial space up here, we think.”
The market in Weber and Davis County is seeing a 37 cent per square foot lease rate, which takes into account both large and older buildings, Hunter said. He said industrial space in Morgan County could lease for the same price.
The study is preliminary, and doesn’t imply agreements with current land owners.
Mecham said that is the very thing he is worried about: that current land owners won’t willingly sell their property to make way for a county industrial park.
Hunter also noted there may be some floodplain land in the area that may have to be filled before it can be developed.
He was also quick to point out the benefits of a local industrial park such as bringing in up to 100 new jobs and some $56,000 in annual property tax revenue. “It could be a public-private partnership that would benefit both sides,” Hunter said.
Hughes said the job creation aspect of industrial space “bodes well” on grant applications.
Industrial space is “flexible,” allowing for uses from warehouse space to a call center, office space showroom and distribution, Hughes said.