Economic Development Update: Commercial Construction in Southern Utah

How COVID-19 is Affecting Commercial Construction in Cedar City and St. George

Over the past decade, Southern Utah has experienced significant increases in population, tourism, and industry. All three have subsequently led to an expansion in commercial construction in the areas of manufacturing, education, multi-use, tourism, technology, and business startup spaces.

According to Tim Watson, President of Watson Engineering, the areas’ multifaceted growth is attributed to Southern Utah providing a business-friendly environment. “Southern Utah has a large diversity of outdoor activities, easy access to multiple modes of transportation, a well-educated population, and proximity to major metropolitan regions.”

Director of the Cedar City Economic Development, Danny Stewart, describes the diverse manufacturing sector that has been in the area for well over 30 years. Examples of this growth include GAF Roofing, recently adding a half-million square feet of manufacturing space. Additionally, Charlotte Pipe will be doubling their building size in a few years with their recent announcement of an immediate expansion of a 70,000 sq. ft. building, followed by another 70,000 sq. ft. building.

"There are some key reasons manufacturers choose Cedar City, including a designated rail spur and being located along Hwy 15. Geographically we are only one-day trucking from multiple major cities in Utah, California, and Nevada," says Stewart. "Manufacturing has done very well in our community, with huge expansions over the past five years."

Despite the recent impacts of COVID-19, manufacturing businesses have continued with their need for expansions. These operations depend heavily upon automated machinery, which often requires large building footprints. Thankfully, manufacturing typically accommodates the social distancing of employees, allowing the continuation of this labor force.

Several manufacturers in the area are increasing their operations in response to the virus and new market demands. GenPac produces foam and plastic food containers and has completed five building expansions over recent years. With the trend toward curbside and takeaway meals, their products are currently in exceptionally high demand.

Watson Engineering is currently working on a new 17,000 SF building addition for Integrated Process Systems (IPS) in Cedar City. IPS is a manufacturer of state-of-the-art process equipment, including automated wet process equipment and material handling systems. The project is under construction and will be complete later this fall.

Of course, the area is also home to Southern Utah University, which has experienced double-digit growth in the student population. This growth contributes to an increase in the building of structures and infrastructure—both on and off-campus. This need for new structures is expected to continue, considering students will be returning in the fall for on-campus classes.

In recent years, Southern Utah has also experienced an influx of remote employees. These are employees who do not work in the offices of their company but work from home or co-sharing workspaces. Southern Utah is attracting people who can choose where they want to live versus being near their company offices. It is expected that companies will continue offering an increased number of remote employment opportunities directly related to their response to COVID-19, bringing further growth to Southern Utah.

"Remote work will continue to increase and change living locations. We have seen an increased demand in co-working spaces and believe this will continue to increase, especially as more companies are finding this as the new normal," explains Stewart. "People who work from home still need to have dedicated spaces for meetings and various work situations. Technology associated with Southern Utah University has helped create this as a desirable location."

Since the outbreak of the virus, many metropolitan area companies are reaching out to community leaders in Southern Utah with interest to move their employee base to a smaller population. It is believed this may result in an influx of business relocations.

Don Willie, President and Chief Executive Officer of St George Area Chamber of Commerce, also provides insight into Southern Utah's COVID-19 impact. "Thankfully, we have not seen the high cases of the virus in Southern Utah. Proximity has helped to keep us safe. Plus, residents are taking precautions," explains Willie. "The rebound for us appears to be quicker and not as impactful. Of course, we have a dependence on tourism. We need to adopt practices that make both tourists and residents feel safe."

Willie also details the growth of startup companies and technology companies. "We are experiencing a strong surge of startups. St. George is home to the largest entrepreneurial space in Utah. A few years ago, Dixie University remodeled an abandoned Elementary School into the 55,000 sq. ft. Atwood Innovation Plaza," expounds Willie. "It offers 15,000 sq. ft. of co-working space, 30,000 sq. ft. of common and classroom space, along with 10,000 sq. ft. of maker space with a 3D printer, vinyl cutter, and wood and metal shops."

Additionally, St. George is experiencing the expansion of technology. Currently, a development known as Tech Ridge is underway. It is located on Black Ridge, a plateau where the old airport was located. As airplanes increased in size, this airport ended up not being big enough and was thus relocated.

"Everyone was bringing ideas and plans for the site, but nothing felt quite right," says Willie. "Then Tech Ridge, LLC proposed a mixed-use development. It will house several tech startups, residential, and retail along with Dixie Technical College." One example of a company moving to Tech Ridge is PrinterLogic, with 200-plus employees. Plans are also to build residential, gym, retail, commercial, a park, and a trail around the entire complex.

Willie concludes, "Growth and development are only the tip of the iceberg. Because of the Tech Ridge project, there is a new mindset in how we develop. Southern Utah is growing up. We are becoming more sophisticated and focusing on economic development. Bigger companies are taking notice of our region due to the younger population and access to outdoors. These companies realize they can attract talent, with more and more people wanting to live in the area."