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    Nonresidential Construction: Murray to American Fork

    Nonresidential Construction: Murray to American Fork

    2015 saw the strongest year for nonresidential construction in Utah since 2007 and the fourth highest in the state’s history at $2 billion. Industrial and office construction, in particular, had a great year coming close to matching pre-recession investments.

    Despite this high water mark, nonresidential construction is expected to drop 20% this year to $1.6 billion. 2015 topped out so high due to two large projects in the energy industry:

    Oil Refinery Expansion in Davis Countyhollyrefinery1

    This $216 million expansion at the oil refinery in Woods Cross doubled its daily capacity from 30,000 barrels to 60,000.

    Solar farms in Beaver and Iron CountiesSolar

    $200 million invested in solar farm construction in Beaver and Iron Counties will help power southern Utah.

    Between the two projects, they accounted for $416 million of the $485.1 million invested in industrial construction last year. 2015 was also second only to 2007’s all-time high of $497 million in industrial development (adjusted for inflation).

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    Office Construction

    Demand for office space in Utah has increased significantly in the last few years. The profession, scientific, and technical services and administrative and support services sectors along have added 40,000 jobs since 2010. Because the two sectors are heavy users of office space, the need for new construction has only gone up. At $424 million, new office construction hit its highest year since 2007, which topped out at $457 million.


    Retail Construction

    Since the recession hit in 2008, retail development has had seven years of relatively low work. Each year has totaled less than $200 million in investments. The 14 years before the recession never dipped below that. Retail construction investment has increased in the last few years, but Internet sales have cut into traditional retail sales and slowed recovery.


    Southern Salt Lake County and Northern Utah County Reaping the Benefits of New Construction

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    The bulk of new office and retail construction is concentrated in southern Salt Lake County and northern Utah County between Murray and American Fork. This isn’t a surprise, given that nearly 25% of all Utahns live in that area. Almost 40% of all new residential construction in the state last year was there, too, on top of 50% of all new office and retail development.

    Lehi, in particular, is leading every other city in the area with $120 million of new office space going up for local businesses like Nuvi, Vivint Solar, and Utah Community Credit Union. The main draw for these businesses is the availability of large tracts of land ready for development, all close to the I-15. No other city in recent years has had so much undeveloped commercial property available along the I-15, making it the ideal location for commercial construction.


    im flashIM Flash, based out of Lehi, Utah

    The development of Thanksgiving Point almost 20 years ago kickstarted Lehi’s development along the I-15. Possibly more important than that, though, was Micron’s construction of a $1.3 billion semiconductor plant east of the highway. It started in 1995 and was completed a few years later. A downturn in the microchip market in the early 2000s led to it being mothballed, however. It wasn’t until a few years later that Micron partnered with Intel to form IM Flash and used the plant to produce flash memory products. Since then, other tech companies like Adobe and Xactware have moved into the area. The National Security Agency built a $1.5 billion data center in Bluffdale to help store communications data for the U.S. Intelligence Community. All of this has helped contribute to the nickname Silicon Slopes for the area.

    In Salt Lake County, Sandy, and Midvale rank in the top five cities for office construction. Midvale is seeing $82 million going into development at Bingham Junction on the west side of the I-15. This is replacing Sharon Steel, a smelting and ore milling plant, which had operated on the site for almost 70 years before closing operations there.

    The top five cities for retail construction are also located between Murray and American Fork. Sandy leads the way with $40 million in retail work being done, and South Jordan follows with $27.7 million. Growth is steady in both cities due to high population densities in the area.


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