The Changing Economic Structure and Current Baseline of Draper City

The Changing Economic Structure and Current Baseline of Draper City Prepared for Draper City Department of Economic Development Prepared by James A. Wood Francis X. Lilly Bureau of Economic and Business Research University of Utah June 2006

TABLE OF CONTENTS Introduction...1 Study Highlights...3 I. Economic Baseline of Draper...6 II. Demographic and Economic Changes in Draper 1995 to 2005...8 Demographic and Income Trends...8 Employment Trends...11 Retail Sales Trends...19 New Residential Construction and Real Estate Trends...27 Nonresidential Construction Trends...33 Tax Revenues and Municipal Government Expenditures...38 III. Draper in a Regional Context...42 Population and Employment...43 Nonresidential Construction Activity and Housing...46 Retail Sales...48 Appendix and Methodology...52

Tables Summary Table: Economic Baseline in Draper...6 Summary Table: Change in Major Indicators...7 Table 2.1: Population Estimates for Draper City...9 Table 2.2: Rank of Cities by Population - Percent Change...9 Table 2.3: Rank of Cities by Absolute Population Change...9 Table 2.4: Population Change in Draper City Year End Estimates...10 Table 2.5: Change in Population by Age Group...11 Table 2.6: Household Change in Draper City Year End Estimates...12 Table 2.7: Population by Race in Draper City 2000...12 Table 2.8: Rank of Cities by Household Income...13 Table 2.9: Percent and Number of Taxpayers with Adjusted Gross Incomes Above $100,000...13 Table 2.10: Employment Characteristics in Draper 1995-2004...14 Table 2.11: Nonagricultural Employment in Draper City in 1995...15 Table 2.12: Nonagricultural Employment in Draper City in 2005...15 Table 2.13: Employer Firms by Category and Firm Size in Draper City 2003...17 Table 2.14: Major Firms in Draper City 2005...18 Table 2.15: Retail Sales by Category for Draper City...19 Table 2.16: Change in Retail Sales by Category in Draper City...21 Table 2.17: Per Capita Retail Sales in Draper City...22 Table 2.18: Retail Sales by Category as a Share of Total Sales in Draper City...23 Table 2.19: Estimated Retail Expenditures by Draper Households in 2005...23 Table 2.20: Retail Developments in Draper City...24 Table 2.21: Inventory of Retail Establishments in Draper City in 2005... 25-26 Table 2.22: Value of New Residential Unites and Real Estate Sales in Draper City...27 Table 2.23: Occupied and Total Dwelling Unites in Draper City...28 Table 2.24: Building Permits Issued in Draper City for Single-Family Homes...30 Table 2.25: Selected Large Apartment Communities in Draper City...31 Table 2.26: Price Distribution of New Homes Sold in Draper City in 2005...31 Table 2.27: Average Sales Price, Days on Market, and Number of New Listings in Draper City..32

Tables Table 2.28: Value of Nonresidential Construction in Draper City...33 Table 2.29: Major Permit-Authorized Nonresidential Construction Projects in Draper City...34 Table 2.30: Major Proposed Capital Investments in Draper City...36 Table 2.31: Average Daily Traffic Counts Both Directions...37 Table 2.32: Major State and Federal Transportation Investment in Draper City...38 Table 2.33: Municipal Revenues and Expenditures in Draper City in 2004...39 Table 3.1: Population Projections for Draper and Surrounding Communities...43 Table 3.2: Comparative Employment Characteristics in 2004...44 Table 3.3: Comparative Employment by Sector as a Share of Total Employment...45 Table 3.4: Average Nonagricultural Employment in Draper and in Surrounding Communities...45 Table 3.5: Average Monthly Wages in Draper and Surrounding Communities in 2004...46 Table 3.6: Permit-Authorized Nonresidential Construction: 1995-2005...47 Table 3.7: Housing Inventories in 2005...48 Table 3.8: Housing Inventories in Draper and in Surrounding Communities: 2000-2005...48 Table 3.9: Growth in Housing from 2000 to 2005...49 Table 3.10: Median Price of New Detached Single-Family Homes...49 Table 3.11: Rank of Cities by Retail Sales by Category...50 Table 3.12: Retail Sales in Draper and in Surrounding Communities: 2000-2005...50 Table 3.13: Reported Retail Sales in Draper and in Surrounding Communities in 2005...51

Figures Figure 1.1: Map of Draper City...2 Figure 2.1: Population in Draper City: 1980-2006...10 Figure 2.2: Employment by Major Industry for Draper in 2004...16 Figure 2.3: Retail Sales in Draper City: 1995-2004...20 Figure 2.4: Retail Sales Activity by Category: 1995-2004...21 Figure 2.5: Total Dwelling Unites in Draper City: 1990-2005...28 Figure 2.6: Building Permits issued in Draper City for Single-Family Homes...29 Figure 2.7: Percent Change in Average Sales Price of Homes in Draper City...32 Figure 2.8: Inventory of Office Space in Draper City...35 Figure 2.9: Inventory of Industrial Space in Draper City...35 Figure 2.10: Sales and Use Tax Revenue in Draper City: 1992-2004...40 Figure 2.11: Property Tax Revenue in Draper City: 1992-2004...40 Figure 3.1: Draper and Nearby Cities...42

INTRODUCTION This study was undertaken in 2006 by the Bureau of Economic and Business Research, University of Utah, for Draper City s Office of Economic Development. The study examines changes in the economic structure of Draper City from 1995 to 2005 and provides a current economic baseline for the city. Draper City s recent economic history is defined by rapid population growth, high levels of residential construction, rising real estate values and large-scale commercial development. In past twenty years Draper City has emerged from its agricultural past into a prototypical suburban community. For nearly 120 years Draper City was primarily an agricultural community. As late as the 1940s, Draper Poultry was the largest employer in the city. Chickens, eggs and sugar beets were the principal agricultural products however, agriculture s dominance of the local economy was disrupted in 1951 by the location of the Utah State Prison in what is now the western portion of the city. For the next two decades two contrasting activities state government and agricultural defined the Draper economy. One of the first signs of suburbanization came with the location of the Hidden Valley Country Club in 1959 and the conversion of the 300-acre Heber A. Smith farm and water rights from agriculture to recreation. Another harbinger of the decline of agriculture was the 1967 destruction by fire of Draper Poultry. Although rebuilt in 1969 and sold to the Intermountain Farmers Association, the poultry business and agriculture played a much diminished role in the local economy by the 1970s. 1 With the completion of I-15 to 13800 South in 1970 the commute time from Draper to Salt Lake City was cut in half to thirty minutes. Reduced commute times led to new home building in the 1970s, which in turn created demand for new commercial developments. By 1977, rapid population growth led to the incorporation of Draper City. Incorporation was a response by local residents to the threat of annexation from Sandy City. Sandy had undertaken a number of annexations and was expanding to the south, which threatened the country lifestyle of Draper City. Consequently, in the hope of controlling their lifestyle, residents approved the incorporation of Draper City in November 1977. At the time the population of the city was estimated to be 4,600, a 432% increase over the 1970 population of 870. 2 By 1980 the Census Bureau reported Draper City s population at 5,521. During the next ten years the city had a modest annual growth rate of 2.8% and by 1990 the population had reached 7,257 but there was little indication of the type of growth about to occur in Draper City. This study traces Draper s extraordinary demographic and economic growth that began around 1995 and continues to the present. 1 Sivogah to Draper City, 1849 to 1977, Draper Historical Society, 2002. 2 Draper Area Incorporation Study, Prepared by the Bureau of Community Development, University of Utah, 1977. Bureau of Economic and Business Research 1

Bureau of Economic and Business Research 2

STUDY HIGHLIGHTS Demographic and Income Trends Between 1990 and 2000 Draper ranked first among all Utah cities in population change. The city s population grew from 7,257 to 25,220, an increase of 247 percent. The rapid growth was initiated by the development of the large master planned community of South Mountain, which had over 1,800 residential lots. Since 2000, the population growth rate in Draper City has averaged 11 percent annually. Over the last few years the city has grown by about 2,500 residents each year. The 2006 population estimate for the city is 36,500 3. The number of households is estimated at 11,000. During the 1990s the population of Draper City became younger. The share of population of those age 5 and under doubled from 5 percent in 1990 to 10 percent in 2000, while the share of those 65 years or older dropped from 6.1 percent to 3.7 percent. A significant number of upper-income households have moved into Draper since 1990. The average household income for Draper increased from $45,240 in 1989 to $81,893 in 1999. Currently, the average household income in Draper City is estimated to be $115,250. Draper is among the highest income cities in the state. Only Alpine and Park City have more taxpayers earning at least $100,000 annually. Employment Trends Employment in Draper has grown rapidly from 1995 to 2004, increasing by 144 percent, an annual growth rate of 10 percent. Draper leads all cities in Salt Lake County in employment growth over this nine-year period. In addition to the high growth rate the most significant change has been the shift in the share of service and government employment. Since 1995 service employment has increased from 12 percent of the city s employment to 27 percent while government employment has fallen from 34 percent to 14 percent. Retail trade is the largest single employment sector with 2,300 employees. The construction sector ranks second with 2,100 employees followed by government with 1,700 employees. Employment in Draper City in 2004 was 12,000. The largest employer is the Utah Department of Corrections, followed by ebay and 1-800 Contacts. Retail Sales Trends Nearly all of the 1.35 million square feet of retail space in Draper City has been developed in the past 10 years and with the opening of IKEA in 2007 Draper will become a regional retail center for furniture. Since 1995 retail sales in Draper have grown at an annual rate of 28 percent, increasing from only $24.7 million in 1995 to $284.9 million in 2005. The steady development of retail space in the city has made Draper less vulnerable to retail leakage than many suburban communities. The current per capita retail sales for the city is about $8,500, very comparable to the state s per capita retail sales of $8,490. The largest retail category is grocery store sales which total $69 million or 25 percent of all retail sales. The most rapidly growing sector has been general merchandise, which has increased by 845% or $35.5 million between 1995 and 2005. The nine retail developments in Draper City have 193 retail establishments. The largest single category of retail establishment is restaurants with 55 establishments. The retail purchasing power of Draper households is considerable. They spent $450 million on retail consumer goods in 2005. 3 Excludes inmate population of 3,800 at the Utah State Prison. Bureau of Economic and Business Research 3

New Residential Construction and Real Estate Trends Draper City is one of the most robust residential real estate markets in the state. In the past ten years the city has approved $945 million in new residential construction and real estate agents have sold more than $1.4 billion in existing homes. Between 1995 and 2005 nearly 8,000 new dwelling units have been added to the housing stock, expanding the inventory from 2,700 units in 1995 to 10,675 units in 2005. Forty percent of all residential units in Draper have been built in the past 6 years. The boom in new detached single-family homes is associated with two large, master planned communities: South Mountain (1,800 homes on 1,500 acres) and SunCrest (3,300 homes on 3,800 acres). South Mountain was essentially developed between 1994 and 1998. Development at SunCrest has reached about 600 homes. Built-out is anticipated by 2012. Housing values in Draper are among the highest in the state. The average sales price of an existing home was $373,181 in 2005 and one quarter of all new homes in Draper City are priced above $500,000. Nonresidential Construction Trends Since 1995 there has been $304 million in permit-authorized new nonresidential construction in Draper City. The largest single project was the $40 million Skaggs Catholic Center. Other large projects include the Coca Cola Bottling Plant, Metropolitan Water District Treatment Plant, Hidden Valley Shopping Center and Draper Peaks retail center. Draper City s inventory of office and industrial space includes 3.7 million square feet of office space and 1.9 million square feet of industrial space. Sixty percent of the office space has been built in the past 10 years and 75 percent of the industrial space. Major Projects and Public Infrastructure There is over $350 million in new nonresidential development planned for Draper City by 2009. The largest project is South Point office park followed by Lone Peak Hospital, IKEA and the LDS Temple. Notably, these new projects will serve larger market areas demonstrating Draper s transition from a local to a regional provider of goods and services. Proposed commercial developments will likely add 750,000 square feet of office space and 200,000 square feet of retail space by 2009. In addition, the potential redevelopment of the VF Factory Outlet would add several thousand square feet of refurbished retail. There has been substantial public investment in the transportation infrastructure of Draper City. Since 1995, federal and state governments have committed $226 million to the construction of highways and roads serving Draper City. The largest investment has been $138 million in the 12300 South expansion followed by $63 million in the 11400 South State Street interchange. Draper City has funded $6.34 million of the Bangerter Extension between I-15 and Highland Drive. A light rail TRAX line is also planned for Draper City by 2014 pending approval by Salt Lake County residents of a property tax increase in November 2006. The Draper line will cost $250 million and include three stations. The transportation infrastructure has been an economic development advantage for Draper City, particularly the presence of I-15, which has created significant commercial development opportunities along 12300 South as well potential commercial development at Draper s three other I-15 exits: 14600 South, Bangerter Highway (13600 South) and 11400 South. Bureau of Economic and Business Research 4

Tax Revenues and Municipal Government Expenditure Since 1990, municipal tax revenues have increased 423 percent and expenditures have increased 585 percent, with most of the increases occurring in the last decade. Sales tax receipts have increased 923 percent since 1990, reflecting the growth in Draper s retail sector. Property tax revenue shows the most profound increase 1,661 percent over 1990 levels. Draper in a Regional Context Draper s population growth is part of a broader transformation affecting southern Salt Lake County and northern Utah County. Draper has experienced the most population growth of the cities in the area. Draper s population is expected to exceed 72,000 people by 2050. Sandy and West Jordan have the largest employment bases in the region; have recorded the highest value of new nonresidential construction since 1995; and have the region s largest retail centers. Since 1990, the housing inventory in Draper has increased 629.4 percent, the greatest increase of the cities in the region. Relative to the region, new housing prices in Draper are high. Only Sandy has a higher median new home price. Bureau of Economic and Business Research 5

I. ECONOMIC BASELINE OF DRAPER Population* Residential Population (2006) 36,500 Median Age (2000) 28.6 Households (2006) 11,000 Average Household Income (2006) $115,250 Employment Employer Firms (2004) 1,200 Average Employment (2004) 12,000 Average Annual Wage (2004) $30,852 Major Employment Sectors (2004) Number Share Retail Trade Employment 2,760 23.8% Construction Employment 2,103 17.5% Government Employment 1,706 14.2% Retail Sales Taxable 2005 Retail Sales (millions) $284.9 Major Retail Categories (millions) Food Store Sales $69.0 Motor Vehicle Sales $50.2 General Merchandise $39.7 Per Capita Retail Sales $8,519 Retail Expenditures by Draper Households (millions) $431.3 Housing, New Construction and Real Estate Value of New Residential Construction, 1995-2005 (millions) $944.6 Sales of Existing Residential Real Estate, 1995 2005 (millions) $1,429.1 Average Sales Price of New Listings (2005) $373,181 Average Days on Market (2005) 50 Number of Listings (2005) 825 Occupied Dwelling Units (2005) Number Share Owner-occupied 8,250 80.5% Renter-occupied 2,000 19.5% Total Occupied Dwelling Units 10,250 100% Nonresidential Construction Value of New Nonresidential Construction, 1995 2005 (millions) $304.8 Value of Nonresidential Additions and Alterations, 1995 2005 (millions) $41.2 Total Nonresidential Construction Value, 1995 2005 (millions) $346.1 Inventory of Commercial Space (million sq. ft.) Office Space 3.7 Industrial Space 1.9 Major Retail 1.3 Tax Revenue and Expenditures Total Revenue (millions) $26.6 Property Tax Receipts $4.9 Sales Tax Receipts $5.3 Expenditures $22.3 *Excludes inmate population of approximately 3,800 at the Utah State Prison. Bureau of Economic and Business Research 6

Change in Major Indicators 1990 2006 Change Percent Change Residential Population* 4,995 36,445 31,450 629.6% Households 1,401 10,991 9,590 684.5% Average Household Income $32,357 $115,250 $82,893 256.2% Dwelling Units 1,452 11,500 10,048 692.0% 1990 2006 Change Percent Change Municipal Revenue $5.1 $26.6 $21.5 421.6% Sales and Use Tax $0.5 $5.4 $4.9 980.0% Property Tax $0.3 $4.9 $4.6 1,533.3% Municipal Expenditures $3.3 $22.3 $19.0 575.8% 1990 2006 Change Percent Change Employment 4,912 12,010 7,098 144.5% Nonagricultural Employer Firms 334 1,200 866 259.3 Retail Sales** Total (millions) $24.7 $284.9 $260.2 1,053.4% Per Capita $2,944 $8,519 $5,575 189.4% *Excludes inmate population of approximately 3,800 at the Utah State Prison. **Retail sales data begin with 1995. Bureau of Economic and Business Research 7

II. DEMOGRAPHIC AND ECONOMIC CHANGES IN DRAPER 1995 TO 2005 Demographic and Income Trends Highlights Between 1990 and 2000 Draper ranked first among all Utah cities in population change. The city s population grew from 7,257 to 25,220, an increase of 247.5%. The rapid growth was initiated by the development of the large master planned community of South Mountain, which had over 1,800 residential lots. Since 2000, the population growth rate in Draper City has averaged 11% annually. Over the last few years the city has grown by about 2,500 residents each year. The 2006 population estimate for the city is 36,500 4. The number of households is estimated at 11,000. During the 1990s the population of Draper City became younger. The share of population of those age 5 and under doubled from 5 percent in 1990 to 10 percent in 2000, while the share of those 65 years or older dropped from 6.1 percent to 3.7 percent. A significant number of upper-income households have moved into Draper since 1990. The average household income for Draper increased from $45,240 in 1989 to $81,893 in 1999. Currently, the average household income in Draper City is estimated to be $115,250. Draper is among the highest income cities in the state. Only Alpine and Park City have more taxpayers earning at least $100,000 annually. Demographic Change from 1995 to 2005 Draper has experienced unprecedented population growth in the past fifteen years. This growth has underwritten the development of major employment and retail sectors in the city, has prompted historic infrastructure upgrades, and has demanded a new vision for the city. What once was a rural agricultural community with a long history and deep community roots has been transformed into a prosperous, young, suburban community in a growing metropolitan region. Draper City was incorporated in 1977. At that time the estimated population for the city was 4,600. In 1980 the Census reported the population for Draper City at 5,521, which included 985 inmates at the Utah State Prison. The Census Bureau considers the prison population as part of the resident population of the city. The decennial census population estimates for the city and the inmate population at the Utah State Prison (Draper) are shown in Table 2.1. For the purposes of this study the residential population excludes the inmate population and is used throughout the study unless otherwise noted. Between 1980 and 1990 the residential population of Draper City increased at only 1% annually, adding 459 new residents to the city in the 10 year period. In the next ten years the population of Draper would more than quadruple, increasing at an annual rate of 16% over the decade of the 1990s. By 2000 the residential population of Draper City had grown to 21,596. In the past five years the population growth rate has slowed to an annual rate of 11% but Draper City still ranks in the top 5% of all Utah cities in rate of population growth. 4 Excludes inmate population of 3,800 at the Utah State Prison. Bureau of Economic and Business Research 8

Table 2.1 Population Estimates for Draper City Year Total Population Prison Population Residential Population 1980 5,521 985 4,536 1990 7,257 2,262 4,995 2000 25,220 3,624 21,596 2006* 40,245 3,800 36,445 *Year-end estimate. Other estimates are for 1 April Source: U.S. Bureau of the Census, Utah Department of Corrections, and 2006 population estimated by the Bureau of Economic and Business Research, University of Utah. Among all Utah s cities and towns Draper City ranked first in percent change in population between 1990 and 2000. During the ten-year period, the Census reported a 247.5% increase for Draper. This increase includes the inmate population at the Utah State Prison. The second-ranked city was South Jordan with an increase of 140.9%. Utah s top ten cities ranked by percent change and absolute change in population for the 1990s are shown in Tables 2.2 and 2.3. Draper ranked seventh in absolute change in population with a gain of 17,963 between 1990 and 2000. Table 2.2 Rank of Cities by Population Percent Change City 1990 2000 Percent Change Draper 7,257 25,220 247.5 South Jordan 12,220 29,437 140.9 Lehi 8,475 19,028 124.5 Riverton 11,261 25,011 122.1 Lindon 3,818 8,363 119.0 Bluffdale 2,152 4,700 118.4 Leeds 254 547 115.4 Hurricane 3,915 8,250 110.7 Alpine 3,492 7,146 104.6 Santaquin 2,386 4,834 102.6 Source: U.S. Bureau of the Census. Table 2.3 Rank of Cities by Absolute Population Change City 1990 2000 Absolute Change West Jordan 42,892 68,336 25,444 West Valley 86,976 108,896 21,920 Salt Lake City 159,936 181,743 21,807 St. George 28,502 49,663 21,161 Provo 86,835 105,166 18,331 Draper 7,257 25,220 17,963 South Jordan 12,220 29,437 17,217 Orem 67,561 84,324 16,763 Layton 41,784 58,474 16,690 Riverton 11,261 25,011 13,750 Source: U.S. Bureau of the Census. The Bureau of Economic and Business Research developed annual population and household estimates for Draper City based on new residential construction. These annual estimates exclude the prison Bureau of Economic and Business Research 9

population and were benchmarked against the decennial census population for 1990 and 2000. The annual estimates are year-end numbers. Draper s spectacular demographic growth in the 1990s is illustrated in Figure 2.1. The rapid acceleration in population growth began at mid-decade with the development of South Mountain and the increase in population led by the single-year surge of nearly 3,700 in 1997; still Draper s record for population growth over a twelve-month period. Over the last few years Draper s population growth has averaged about 2,500 annually, see Table 2.4 and Appendix for discussion of population estimating methodology. Figure 2.1 Population in Draper City: 1980-2006 Population 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 1980 1991 1993 1995 1997 1999 2001 2003 2005 Year Source: Bureau of Economic and Business Research, University of Utah. Table 2.4 Population Change in Draper City Year End Estimates Year Population Change % Chg. 1990 4,959 1991 5,248 289 5.8% 1992 5,755 507 9.7% 1993 6,357 602 10.5% 1994 7,393 1,036 16.3% 1995 9,094 1,701 23.0% 1996 11,641 2,547 28.0% 1997 15,476 3,835 32.9% 1998 18,428 2,952 19.1% 1999 21,299 2,871 15.6% 2000 23,542 2,243 10.5% 2001 24,703 1,161 4.9% 2002 27,528 2,825 11.4% 2003 29,116 1,588 5.8% 2004 31,556 2,440 8.4% 2005 34,124 2,569 8.1% 2006 forecast 36,445 2,320 6.8% Note: Excludes prison population. Source: Bureau of Economic and Business Research, University of Utah. Bureau of Economic and Business Research 10

The population growth of Draper has resulted in some changes in the age structure of the population, most notably, an increase in the number of young people in the city. The population under 5 years of age increased from 390 in 1990 to 2,640 by 2000. As a share of the population this age cohort increased from 5.4% to 10.5%. The only other age group that experienced a significant change in its share of the population was the 65 years+ cohort. As a share of the population this group dropped from 6.1 percent in 1990 to 3.7 percent in 2000. These changes in the age structure of Draper population resulted in the median age dropping from 30.0 years in 1990 to 28.6 in 2000 (Table 2.5). Table 2.5 Change in Population by Age Group Category 1990 % Share 2000 % Share Population 7,257 25,220 Age Under 5 Years 390 5.4 2,640 10.5 5 to 17 Years 1,508 20.8 5,425 21.5 18 to 20 Years 348 4.8 1,045 4.1 21 to 24 Years 575 7.9 1,786 7.1 25 to 44 Years 2,808 38.7 9,671 38.3 45 to 54 Years 772 10.6 2,525 10.0 55 to 59 Years 232 3.2 707 2.8 60 to 64 Years 181 2.5 495 2.0 65 Years and Over 443 6.1 926 3.7 Median Age 30.0 28.6 Source: U.S. Bureau of the Census. Households: Size and Number The size of households throughout Utah as well as Draper City has been declining for several years. In 1990, the average number of persons per household in Draper City was 3.54 and by 2000 it had declined to 3.4. Although Draper s typical household size was larger than both the state and Salt Lake County it is well below the average size of other rapidly growing cities in Salt Lake and Utah Counties. Typically households in Draper City are smaller and have higher income levels than other high growth cities. The number of households in Draper City in 2000 was estimated to be about 6,500. By year-end 2006 the number of households in Draper City will reach 10,800, an increase of nearly 750 households over 2005 (Table 2.6). Bureau of Economic and Business Research 11

Table 2.6 Household Change in Draper City Year End Estimates Year Households Change % Chg. 1990 1,401 --- 1991 1,488 87 6.2% 1992 1,639 150 10.1% 1993 1,817 179 10.9% 1994 2,122 305 16.8% 1995 2,621 499 23.5% 1996 3,368 748 28.5% 1997 4,496 1,128 33.5% 1998 5,376 879 19.6% 1999 6,217 841 15.7% 2000 6,874 657 10.6% 2001 7,296 422 6.1% 2002 8,164 868 11.9% 2003 8,671 507 6.2% 2004 9,437 766 8.8% 2005 10,248 811 8.6% 2006 forecast 10,991 743 7.3% Source: Bureau of Economic and Business Research, University of Utah. Change in Race and Ethnicity Population by race for Draper City in 2000 is shown in Table 2.7. Draper has been and remains a racially homogenous community, with the vast majority of the city s population characterized as white. Racial minorities comprise less than 10 percent of the city s population and a significant share of Draper s minority population. About 60 percent of the city s minority population are represented by inmates at the State Prison. The population by race in Table 2.7 does not identify the Hispanic population. Hispanics are considered an ethnic group rather than race and are included among population estimates for whites or may be part of other races or mixed race. The Hispanic population of Draper City in 2000 was estimated at 1,469 or 5.8 percent of the population. Again, a significant share of the city s Hispanic population 60 percent is part of the inmate population at the state prison. Table 2.7 Population by Race in Draper City - 2000 Percent Share Category Population Total: 25,220 100.0% White alone 23,013 91.2% Black or African American alone 384 1.5% American Indian and Alaska Native alone 189 0.7% Asian alone 329 1.3% Native Hawaiian and Other Pacific Islander alone 92 0.4% Some other race alone 684 2.7% Two or more races 529 2.1% Source: U.S. Bureau of the Census. Bureau of Economic and Business Research 12

Change in Income The median household income data for Draper show that between 1990 and 2000 a significant number of upper-income households moved into the city. The median household income for Draper increased from $32,357 in 1989 to $72,341 in 1999. Draper ranked sixth among all Utah cities in median income in 1999 and ranked first in the percent change 123.6% in median income over the decade of the 1990s (Table 2.8). Table 2.8 Rank of Cities by Household Income City 1999 1989 % Chg. Highland $80,053 $43,080 85.8% Fruit Heights $79,192 $54,372 45.6% South Jordan $75,433 $43,804 72.2% Farmington $74,250 $45,000 65.0% Alpine $72,880 $39,750 83.3% Draper $72,341 $32,357 123.6% Bluffdale $66,615 $36,302 83.5% Sandy $66,458 $43,971 51.1% Park City $65,800 $39,360 67.2% Elk Ridge $65,511 $36,618 78.9% Source: U.S. Census Bureau The Census Bureau publishes income data every ten years, therefore intercensal income estimates must rely on adjusted gross income data prepared by the Utah State Tax Commission. These data show that Draper is indeed a very high-income city. In 2004 only two cities had a larger percentage of taxpayers with incomes above $100,000 (Table 2.9). Employment Trends Table 2.9 Percent and Number of Taxpayers with Adjusted Gross Incomes Above $100,000 City % of Taxpayers Number of Taxpayers Park City 23.1 2,380 Alpine 22.7 647 Draper 21.2 2,262 Source: Utah State Tax Commission. Highlights Employment in Draper has grown rapidly from 1995 to 2004, increasing by 144%, an annual growth rate of 10 percent. Draper leads all cities in Salt Lake County in employment growth over this nine-year period. In addition to the high growth rate the most significant change has been the shift in the share of service and government employment. Since 1995 service employment has increased from 12 percent of the city s employment to 27 percent while government employment has fallen from 34 percent to 14 percent. Retail trade is the largest single employment sector with 2,300 employees. The construction sector ranks second with 2,100 employees followed by government with 1,700 employees. Employment in Draper City in 2004 was 12,000. The largest employer is the Utah Department of Corrections, followed by ebay and 1-800 Contacts. Bureau of Economic and Business Research 13

Employment Change 1995-2004 With the economic and residential growth in the southeast and southwest portions of Salt Lake County, employment in Draper City has increased rapidly, rising from 4,900 employees to 12,000 employees in just nine years, Table 2.10. Especially noteworthy is the increase in the number of firms located in Draper, more than tripling from 334 in 1997 to 1,229 in 2004. The average wage rate is relatively low due to the relatively high concentration of state government (prison employees), construction and retail trade employees, all moderate to low wage sectors. Table 2.10 Employment Characteristics in Draper City: 1995 to 2004 Average Year Establishments Percent Change Employment Percent Change Monthly Wage Percent Change 1995 334 4,912 $1,877 1996 401 20.1% 6,376 29.8% $2,131 13.5% 1997 535 33.4% 8,133 27.6% $2,229 4.6% 1998 586 9.5% 9,184 12.9% $2,143-3.9% 1999 628 7.2% 10,574 15.1% $2,203 2.8% 2000 750 19.4% 10,850 2.6% $2,443 10.9% 2001 890 18.7% 9,774-9.9% $2,326-4.8% 2002 953 7.1% 10,559 8.0% $2,332 0.3% 2003 1,111 16.6% 11,475 8.7% $2,366 1.5% 2004 1,229 10.6% 12,010 4.7% $2,571 8.7% Source: Utah Department of Workforce Services. Draper was affected by the 2001-2002 recession as employment at establishments in the city dropped by 10% in 2001. The relatively high concentration of employment in construction and retail firms both cyclical industries makes the city prone to some employment volatility, however, this is offset, to some degree, by the presence of the recession-proof Utah State Prison, the city s largest employer. The Utah State Prison currently employs about 1,150. In 1995 the employment base in Draper City was dominated by the government sector, which accounted for one out of every three jobs. A very high percentage of these jobs were at the Utah State Prison. The second-ranked sector was retail trade with 22.9% of employment followed by the construction sector with 14.5%. As noted these three sectors remain the dominant sectors of the local economy, however, there has been a dramatic shift in the relative role of government employment, which in 2004 accounted for only 14.2% of nonagricultural employment in Draper City. Government employment has grown only slightly over the past ten years, whereas employment in construction and retail has exploded: construction employment is up 194%, retail trade employment is up 128% while government employment increased by only 2%. The distribution of employment by sector in Draper City in 1995 is shown in Table 2.11. Bureau of Economic and Business Research 14

Table 2.11 Nonagricultural Employment in Draper City in 1995 Sector Employment Percent Share Mining 0 0.0% Construction 713 14.5% Manufacturing 531 10.8% TCPU 129 2.6% Trade 1,123 22.9% FIRE 131 2.7% Services 598 12.2% Government 1,687 34.3% Total 4,912 100.0% Source: Utah Department of Workforce Services. Determining the precise employment growth by sector between 1995 and 2004 is difficult due to changes in the definitions of employment sectors by Utah s Department of Workforce Services. However, for the three important categories, retail trade, construction and government the comparability problems are minimal therefore estimates of approximate change were determined. It s apparent from the data that the largest relative shifts in the employment base involve the loss of share by government and gain in the service sector. In 1995 the service sector accounted for about 12% of employment in Draper and by 2004 service employment (professional and business services, education and health services, leisure and hospitality and other services) accounted for about 27% of the jobs in Draper City (Table 2.12 and Chart 2.2). Table 2.12 Nonagricultural Employment in Draper City in 2005 Sector Employment Percent Share Mining 216 1.8% Construction 2,103 17.5% Manufacturing 694 5.8% Trade, Transp., Util. 2,863 23.8% Information 665 5.5% Financial Activities 501 4.2% Professional & Bus. Serv. 1,141 9.5% Education & Health Serv. 889 7.4% Leisure & Hospitality 957 8.0% Other 273 2.3% Government 1,706 14.2% Total 12,008 100.0% Source: Utah Department of Workforce Services. Bureau of Economic and Business Research 15

Figure 2.2 Employment by Major Industry for Draper in 2004 Financial Activities 4% Information 6% Manufacturing 6% Health Services 7% Other 2% Mining 2% Trade 23% Leisure and Hospitality 8% Professional & Business Services 10% Government 14% Construction 18% Source: Utah Department of Workforce Services. Current Employment Baseline In 2004, services which is comprised of several employment sectors including professional and business services, leisure/hospitality and education/health services and other services, employed nearly 2,500 workers. The largest sector within services is professional and business services a very broadly-defined sector that includes engineers, accountants, lawyers, computer programmers, software designers, architects, consultants and even temporary workers. This sector had 1,141 jobs in 2004 or 46% of the employment in services. The largest single employment sector is retail trade, which includes three large employers classified by Department of Workforce Services as retailers: the Coca-Cola Bottling Company of Salt Lake, ebay, and 1-800 Contacts. These three firms account for much of the retail employment in Draper although, given the nature of their business, they do not contribute much in the way of retail sales tax revenue. The remaining retail jobs are found in Draper s strip and neighborhood shopping centers. The second largest employment sector, the construction industry, accounted for 2,103 jobs in 2004. Only two of the 173 construction firms in Draper employed 100 or more people, and 58 percent of the construction firms hired fewer than five people. The construction industry in Draper is dominated by small firms and many of these firms are involved in single-family home building. Thirty-three firms are classified as single-family home builders. The third-ranked sector, government services, employed 1,706 people in Draper in 2004. The significant government worksite in Draper is the Utah State Prison and the adjoining Department of Corrections Administration Building and training facilities. The Utah National Guard also has its administrative offices in Draper. This category includes government activities at all levels, federal, state and local services. A significant number of service jobs 900 are in education (private schools) services, due in part to the Skaggs Catholic Center, which includes the Guardian Angel Day Care, St. John Elementary and Middle School and Juan Diego High School. Skaggs Catholic Center employs about 200 individuals. Bureau of Economic and Business Research 16

Manufacturing, information, and financial services each had 500 or more jobs in 2004. The 216 jobs in the mining sector are due to Geneva Rock Products sand and gravel operation at the point-of-themountain. About 13 percent of the mining sector jobs in Salt Lake County are located in Draper City. Draper s current employment baseline shows a diversified employment for a suburban city and includes significant numbers of state, private education and mining employees as well as the more traditional retail and construction jobs. The expected future growth of retail business in Draper bodes well for employment in the city. The addition of the IKEA store with 300 to 400 employees plus adjacent retail development induced by the IKEA location and other planned retail developments such as South Mountain will add several hundred new retail employees in the next few years. Education and health services should also experience significant expansion with the location of the new St. Marks Lone Peak Hospital to be completed in 2007. This new 80-bed community hospital will have 500 employees. The U.S. Bureau of Labor Statistics provides data on firms by number of employees. These 2003 data vary slightly from similar data provided Utah Department of Workforce Services. Despite the minor data discrepancies the BLS data are valuable in illustrating the size of firms in the local economy. The data suggest that Draper has a relatively high number of large firms at least half and perhaps as many as twothirds of all jobs in Draper City are found in firms with more than 50 employees. Less than 5% of the establishments in the city account for more than half of all employment (Table 2.13). Table 2.13 Employer Firms by Category and Firm Size in Draper City - 2003 Employees Total 1-4 5-9 10-19 20-49 50-99 100-249 250-499 500-999 Total 970 568 163 113 73 34 13 2 4 Forestry, fishing, hunting, and agriculture 2 2 - - - - - - - Utilities 2 - - - 1 1 - - - Construction 173 101 36 16 9 8 3 - - Manufacturing 47 21 4 9 5 5 2-1 Wholesale trade 62 35 13 9 2 1 1 1 - Retail trade 114 41 35 20 10 3 3 1 1 Transportation & warehousing 8 5 1-1 1 - - - Information 22 14 2-3 2 - - 1 Finance & insurance 102 77 12 7 5 - - - 1 Real estate & rental & leasing 59 49 6 4 - - - - - Professional, scientific & technical services 137 99 11 12 10 5 - - - Management of companies & enterprises 3 2 - - - - 1 - - Admin, support, waste mgt, remediation services 62 45 5 2 8 2 - - - Educational services 10 6 2-1 - 1 - - Health care and social assistance 51 23 12 9 4 2 1 - - Arts, entertainment & recreation 5 2 1-1 - 1 - - Accommodation & food services 53 15 6 15 13 4 - - - Other services (except public administration 55 29 16 10 - - - - - Unclassified establishments 3 2 1 - - - - - - Source: U.S. Bureau of Labor Statistics. Major Employers Draper s largest employers (employing at least 500 people) are 1-800 Contacts, ebay, and the Utah Department of Corrections. Additionally, three companies hire between 250 and 499 employees: Advanta Bank, Ballard Medical Products, and the Coca-Cola Bottling Company of Salt Lake. A complete listing of all firms employing at least 100 people with worksites in Draper is included in Table 2.14. Bureau of Economic and Business Research 17

Table 2.14 Major Firms in Draper City - in 2005 Firm 1,000-1,999 Employees Utah State Prison Industry Public Administration 500-999 Employees 1-800 Contacts Retail Call Center ebay, Inc. Retail Call Center 250-499 Employees Advanta Bank Ballard Medical Products Coca-Cola Bottling Company of Salt Lake Credit Card Issuer Medical Instrument Manufacturing Beverage Manufacturing 100-249 Employees Boondocks Fun Center Amusement Arcades Daw Construction Drywall and Insulation Contractors Draper City Public Administration E.B. Berger, Inc. Drywall and Insulation Contractors Geneva Rock Products Sand and Gravel Mining Harmons Grocery Stores Kohl's Department Stores Department Store Little Dutch Boy Bakeries Bakery Musician's Friend Retail Call Center Ralph Wadsworth Construction Civil Contractors Skaggs Catholic Center Private School Tree House Athletic Club Fitness Center Utah National Guard Public Administration Wadsworth Brothers Construction Civil Contractors Whitney Wealth Education Center Telemarketer Youth Care of Utah Private School Source: Utah Department of Workforce Services. Bureau of Economic and Business Research 18

Retail Sales Trends Highlights Nearly all of the 1.35 million square feet of retail space in Draper City has been developed in the past 10 years and with the opening of IKEA in 2007 Draper will become a regional retail center for furniture. Since 1995 retail sales in Draper have grown at an annual rate of 28%, increasing from only $24.7 million in 1995 to $284.9 million in 2005. The steady development of retail space in the city has made Draper less vulnerable to retail leakage than many suburban communities. The current per capita retail sales for the city is about $8,500, very comparable to the state s per capita retail sales of $8,490. The largest retail category is grocery store sales which total $69 million or 25% of all retail sales. The most rapidly growing sector has been general merchandise, which has increased by 845% or $35.5 million between 1995 and 2005. The nine retail developments in Draper City have 193 retail establishments. The largest single category of retail establishment is restaurants with 55 establishments. The retail purchasing power of Draper households is considerable. They spent $450 million on retail consumer goods in 2005. Change in Retail Sales 1995 to 2005 Draper is home to an expanding retail district, serving the extreme south end of Salt Lake County. Generally concentrated along 12300 South and the I-15 corridor, Draper s retail sector has expanded dramatically in recent years, and well positioned to undertake significant further expansion in the remainder of the decade, beginning with the completion of construction of the 310,000 square foot IKEA furniture store in 2007, which will make the city a major regional retail draw for furniture sales. According to the Utah State Tax Commission, Draper s reported retail sales grew from $24.8 million in 1995 to $285 million in 2005 an increase of 1,049% percent in ten years; an average annual compound growth rate for the period of 28%. In the past few years retail activity has emerged as a very important part of the Draper economy. Retail sales in Draper by major category for each year from 1995 to 2004, appear in Table 2.15. Table 2.15 Retail Sales by Category for Draper City (in millions) Category 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Building & Garden $5.5 $25.7 $25.9 $32.0 $32.0 $26.4 $26.9 $22.4 $8.4 $14.8 $19.3 General Merchandise --- --- --- $3.8 --- --- $4.2 $11.0 $17.7 $30.6 $39.7 Food Stores $6.1 $26.9 $29.9 $40.2 $41.0 $50.9 $54.3 $60.9 $62.4 $61.3 $69.0 Motor Vehicles $5.1 $27.6 $27.7 $31.1 $35.4 $35.0 $38.9 $38.8 $33.4 $41.1 $50.2 Apparel & Accessories $3.6 $20.2 $21.3 $23.1 $23.6 $22.9 $22.6 $22.5 $19.6 $19.8 $20.2 Furniture $.3 $1.7 $3.3 $4.5 $5.7 $5.6 $6.7 $7.5 $8.8 $11.3 $14.5 Eating & $1.6 $6.9 $7.6 $10.9 $15.9 $18.7 $20.3 $23.7 $26.7 $28.6 $37.7 Drinking Miscellaneou s Total $2.5 $9.6 $10.6 $11.9 $14.5 $16.8 $16.9 $16.4 $22.3 $24.9 $34.3 $24. 7 $118. 7 Source: Utah State Tax Commission. $126. 5 $157. 6 $168. 3 $176. 5 $190. 7 $203. 3 $199. 4 $232. 5 $284. 9 Bureau of Economic and Business Research 19

The expansion of retail sales in Draper since 1995 is also shown in Figure 2.3. The growth of retail sales is closely tied to the completion of new neighborhood shopping centers. In 1996, work was completed on the first phase of the Hidden Valley development, which would eventually total nearly 500,000 square feet of retail and office space on the north and south side of Draper Parkway at 1100 East to 1300 East. In 1998, the Boyer Group completed Draper Crossing, a project anchored by a Smith s grocery store, Dollar Tree and T.J Maxx. Very strong retail sales growth was recorded in 2005 as sales increased from $232 million to $285 million, the largest increase in retail sales in the city since 1996. The $53 million in new activity is due to the opening of Phase I of Draper Peaks, a 250,000-square-foot development anchored by Kohls, Petco, Michael s Crafts and Dress Barn. A complete inventory of retail establishments in Draper is included in a subsequent section of this report. $300.0 Figure 2.3 Retail Sales in Draper City: 1995-2004 Sales (millions) $250.0 $200.0 $150.0 $100.0 $50.0 $0.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Year Source: Utah State Tax Commission Figure 2.4 illustrates the cumulative contribution of each retail sector in Draper over the past ten years. This figure highlights the importance of food stores and motor vehicle sales (including boat and R.V. sales) to the performance of Draper s retail activities. General merchandise stores have consistently generated increased sales since 2000, becoming an increasingly important contributor to the retail sales in the city. Sales of building and garden materials plummeted after peaking in 1998, due in part to the competition from a new Home Depot located on the Sandy side of 11400 South and State Street. While the sales in this sector are rebounding, they have yet to reach 1996 levels. Bureau of Economic and Business Research 20

$250 Figure 2.4 Retail Sales Activity By Category: 1995-2004 Sales (millions) $200 $150 $100 Miscellaneous Eating and Drinking Furniture Apparel and Accessories Motor Vehicles Food Stores Building and Garden General Merchandise $50 Year $0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Utah State Tax Commission Those retail categories contributing most to the growth in retail activity in Draper City in the past few years are: general merchandise, eating and drinking, furniture and miscellaneous retail. Most impressive has been general merchandise sales which have increased 845%, rising from $4.2 million to $39.7 million. Fast food and restaurant sales have increased 86%, a $17 million jump in sales in just four years (Table 2.16). Table 2.16 Retail Sales by Major Category in Draper City Absolute Type 2001 2005 % Chg. Increase Building & Garden $26.9 $19.3-28.3% $-7.6 Gen l Merchandise $4.2 $39.7 845.2% $35.5 Food Stores $54.3 $69.0 27.1% $14.7 Motor Vehicles $38.9 $50.2 29.0% $11.3 Apparel & Acces. $22.6 $20.2-10.6% $-2.4 Furniture $6.7 $14.5 116.4% $7.8 Eating & Drinking $20.3 $37.7 85.7% $17.4 Miscellaneous $16.9 $34.3 103.0% $17.4 Total $190.7 $284.9 49.4% $94.2 Source: Utah State Tax Commission. The dramatic expansion of retail establishments in Draper City has reduced the need for residents to travel outside the city for retail purchases. Leakage of retail spending is a common feature of rapidly growing, new suburban cities. However, sales per capita data suggest that Draper City has been less vulnerable to leakage than similar cities. Since the completion of Hidden Valley Shopping Center in 1996 retail sales per capita for Draper City have averaged about $8,100 (Table 2.17). Bureau of Economic and Business Research 21

Table 2.17 Per Capita Retail Sales in Draper City Year Per Capita Retail Sales 1995 $2,944 1996 $11,008 1997 $8,741 1998 $9,123 1999 $8,422 2000 $8,003 2001 $8,117 2002 $7,690 2003 $7,083 2004 $7,567 2005 $8,519 Source: Utah State Tax Commission and Bureau of Economic and Business Research, University of Utah. While a city s per capita retail sales can often be skewed by heavy concentrations of tourism spending or high-priced retail products such as automobiles, the measure nevertheless can be useful in evaluating a city s retail leakage. In 2005 the per capita retail sales for Salt Lake County was $9,671 not much above Draper City s $8,519. Statewide, per capita retail sales in 2005 were $8,490 almost identical to Draper City. Sandy City, with several million square feet of retail, captured $13,745 in retail sales per capita. By comparison Lehi City, another rapidly growing suburban city has only $3,100 in retail sales per capita indicating substantial retail leakage from the city. Retail Sales Baseline In 2005 Draper City had retail sales of $284.9 million. The largest single category of sales was food purchased at grocery stores which comprised nearly a quarter of all retail sales in Draper City. Draper currently has five large grocery stores, including Harmon s, Albertson s (2), Wal-Mart Neighborhood Store and Smith s. Motor vehicle sales ranked second at $50.2 million. New and used vehicles sales ranked first in the vehicle sales category. The motor vehicle category also includes boat and R.V. dealers which had over $10 million in sales in 2004. Auto supply stores were also an important component of this sector. Eating and drinking accounts for a sizeable share of the retail activity in Draper City. Nearly half of the sales activity was in sit-down/theme restaurants such as Goodwood Barbeque Company, Guadalahonky s, Ruby Tuesday s, Rumbi Island, Noodles and Company, Café Rio and others. In 2005, $37 million was spent at fast food and sit-down/theme restaurants in Draper City. The distribution of retail sales by category in 2005 is shown in Table 2.18. Bureau of Economic and Business Research 22

Table 2.18 Retail Sales in Draper by Major Category as a Share of Total Sales in Draper City (in millions) Category Sales % Share Food Stores $69.0 24.2% Motor Vehicles $50.2 17.6% General Merchandise $39.7 13.9% Eating and Drinking $37.2 13.2% Miscellaneous $34.3 12.0% Apparel and Accessories $20.2 7.1% Building and Garden $19.3 6.8% Furniture $14.5 5.1% Total $284.9 100.0% Source: Utah State Tax Commission Household Retail Expenditures In 2005 there were about 10,250 households in Draper City. The average household income was estimated to be $115,250 and an aggregated income for all residents of $1.1 billion. Of the total $1.15 billion, Draper households spent approximately $453 million on consumer purchases. Of course, only a portion of these purchases were made in Draper City. Nevertheless, given the high incomes of Draper households and the city s rapid demographic growth the retail purchasing power of Draper residents is considerable. Table 2.19 shows the estimated retail expenditure patterns of Draper residents. Table 2.19 Estimated Retail Expenditures by Draper Households in 2005 (in millions) Retail Category Retail Spending Food at Home $100.1 Food Away from Home $46.9 Household supplies operation and furnishing $57.4 Apparel $38.6 Transportation $143.2 Miscellaneous* $66.6 Total $452.9 *entertainment, personal care, services, reading, tobacco, miscellaneous. Source: Consumer Expenditure Survey, Bureau of Labor Statistics, Utah State Tax Commission and Bureau of Economic and Business Research, University of Utah. Retail Inventory 2006 Draper City s retail is concentrated along 123000 South from I-15 to 1400 East. An estimated 75% of the 1.35 million square feet of retail in the city is located along this 12300 South corridor. Of secondary importance are: (1) State Street retail from 11400 South to 13400 South and (2) 11400 South between State Street and 700 East. Currently there are nine anchored retail developments, with nearly 1.25 million square feet of space. The largest development is Hidden Valley (north and south), which has nearly Bureau of Economic and Business Research 23

300,000 square feet of retail space. Draper Peaks, the newest retail development, will also have about 300,000 square feet of retail with the completion, in 2007, of the 85,000-square-foot Phase II. The nine retail developments, their locations, approximate retail square footage and year completed are given in Table 2.20. Table 2.20 Retail Developments in Draper City Name Address Sq. Ft. Year Anchors Albertson s and strip retail 11400 S. 700 E. 67,000 2000 Alberston s Draper Crossing 12300 S. 200 E. 182,400 1998 T.J. Maxx, Dollar Store Draper Peaks Phase I 12300 S. 300 E. 220,000 2005 Kohl s, Petco, Lane Bryant Draper Southgate 12300 S. 300 E. 62,450 2006 JoAnn s Factory Outlet 12101 Factory Rd. 151,000 1989 Miscellaneous Retail Harmon s and strip retail 11400 S. 700 E. 83,450 2002 Harmon s Hidden Valley 12300 S. 1200 E. 291,870* 1996 Albertson s, Kmart Towne Square 12300 S. 400 E. 35,000 na Miscellaneous Retail Wal-Mart Neighborhood 12300 S. 1400 E. 52,000 2003 Wal-Mart Neighborhood Store * includes only retail square footage Source: Bureau of Economic and Business Research, University of Utah. A physical survey of the major retail areas was conducted. There are 193 retail establishments in Draper City, which include 55 restaurants, 20 personal care (hair and nails) establishments, 17 clothing stores, 10 automotive stores, eight home décor, five grocery stores and two drugstores. The tenants of the major retail developments in Draper are included in the inventory in Table 2.21. Bureau of Economic and Business Research 24

Draper Peaks Anchors: Kohl s, Pet Smart Table 2.21 Inventory of Retail Establishments in Draper City in 2005 Draper Crossing Hidden Valley Hidden Valley North South AAA Allstate Arby's AAA JoAnn s Autozone Am. Family Ins. Arts Academy Albertson's Bajio Artic Circle Blockbuster American Family Ins Beans and Brews Café Rio Cookie Cutters Big-O Tires Cartridge World Carl's Jr. Einstein Bros. Bagels Chevron Citris Grill Chuck-A-Rama Falling Waters Spa Clothing surgeon Dress Barn Cingular Hidden Valley Eye Care Curves Famous Footwear Clarks Tuxedos Juice Tree Café Data Doctors Firestone Tires Cold Stone Kinder Care GNC Gandolfo's Cosmo Nails Kmart Golden Tan T-Mobile Del Taco Little Caersars Great Clips Godfather Pizza Dollar Cuts Oxford Learning Center Hallmark Gold Goodwood BBQ Dollar Tree South Mountain Dance Janbo Express Great Harvest Bread Downeast Home Starbuck's Jiffy Lube Holiday Electric Beach Taco Bell Motophoto Image Inkley's Elementz Salon Treehouse Athletic Club Radioshack Intellibed Fantastic Sam's Walgreen's Red Bandana Pets Jagged Edge Salon Fazoli's Washington Federal Rite Aid Kohl's Graywhale CD Wendy's Salt Lake Running Lane Bryant Guadalahanky's San Francisco Pizza Massage Envy Hancock Jewelers Starbuck's McDonald's Hollywood Video The UPS Store Michael's Crafts Jamba Juice US Nails Noodles Payless Shoe Petco Sonic Sprint SuperCuts U.S. Post Office Village Quilt Shop Wasatch Home Neil's Broiler Panda Express Pizza Hut Post Net Quizno's Subs Rumbi Island Grill Sally Beauty Supply Smith's The Blindman TJ MAXX Tunex US Bank Utah Academy of Emerg. Medicine Village Cleaner's Washington Mutual Draper Southgate Bureau of Economic and Business Research 25

Table 2.21 (continued) Inventory of Retail Establishments in Draper City in 2005 Harmon s Anchor: Harmon s Albertson s Anchor: Albertson s Towne Square Factory Outlet Wal-Mart Neighborhood 1-2-3 Fit Albertson's 5 buck Pizza Banister-Easyspirit Café Trang Chase Bank Albertson's Gas Achieve Dance Academy Bonworth Chase Bank Designer Store Cycle Gear Biorestoration Book Warehouse La Baguette Sweet Home Chicago Dream Nail's Farmers' Ins. Candle Outlets Boutique Fantastic Sam's Great Clips El Rancho Grande Danskin Visions Salon H & R Block Hertz Fun-for-less Travel Dress Barn Wal-Mart Hagermann's Bake House Peking Wok Gual Bertos E.T. Trading Harmon's Postal Annex Keybank Factory Brand Shoes Henrie's Dry Cleaners Starbucks Kwal Howell's Fairfield Inn (Marriott) Little Caesars Sun Station Morris Murdock Travel Holiday Inn My Gym Taco Time Nationwide Insurance Innovative Promotion Rant and Rave Tile Outlet O48 Realty Jo Lene Sinclair Wells Fargo Secret Nail's Kitchen Collection State Farm Leather, etc Studio You-nique L'eggs, Hanes, Bali Super Start School Lotus The Little Gym Oshkosh B' Gosh Wasatch Seasons Rue 21 Weight Watchers Samsonite The Paper Outlet Tomorrow's Antiques Toy Liquidations Trolley Stop Van Huesen Vanity Fair Outlet Vitamin World Welcome Home Which Watch Source: Bureau of Economic and Business Research, University of Utah. Bureau of Economic and Business Research 26

New Residential Construction and the Real Estate Trends Highlights Draper City is one of the most robust residential real estate markets in the state. In the past ten years the city has approved $945 million in new residential construction and real estate agents have sold more than $1.4 billion in existing homes. Between 1995 and 2005 nearly 8,000 new dwelling units have been added to the housing stock, expanding the inventory from 2,700 units in 1995 to 10,675 units in 2005. Forty percent of all residential units in Draper have been built in the past 6 years. The boom in new detached single-family homes is associated with two large, master planned communities: South Mountain (1,800 homes on 1,500 acres) and SunCrest (3,300 homes on 3,800 acres). South Mountain was essentially developed between 1994 and 1998. Development at SunCrest has reached about 600 homes. Built-out is anticipated by 2012. Housing values in Draper are among the highest in the state. The average sales price of an existing home was $373,181 in 2005 and one quarter of all new homes in Draper City are priced above $500,000. Residential construction and real estate activity are the principal indicators of private investment in a city. In the past fifteen years, Draper s phenomenal population growth has propelled a significant increase in the city s housing stock, the development of a new retail corridor along 12300 South, and a rapidlyexpanding employment base. The capital investment in Draper in housing over the last decade has been significant. Since 1995, Draper City has approved residential construction valued at $945 million (current dollars). This expanding residential inventory has also led to increased real estate sales and value. Since 1997 (earliest data available) the value of real estate sales of existing homes and condominiums in Draper totals $1.43 billion (Table 2.22). Table 2.22 Value of New Residential Units and Real Estate Sales in Draper City (in millions) Year New* Existing** 1995 $75.1 na 1996 $106.3 na 1997 $77.4 $72.77 1998 $88.0 $89.6 1999 $73.6 $110.0 2000 $58.1 $123.7 2001 $89.4 $133.5 2002 $70.7 $153.1 2003 $89.6 $192.0 2004 $107.9 $222.6 2005 $108.5 $331.8 Total $944.6 $1,429.07 *Includes single-family and multi-family units. **Includes single-family and condominiums. Source: Bureau of Economic and Business Research, University of Utah and Wasatch Front Regional Multiple Listing Service. Bureau of Economic and Business Research 27

Residential Construction and Housing Inventory Underlying Draper s transformation in the past fifteen years is a substantial increase in the housing inventory of the city. Since 1995, Draper has added nearly 8,400 dwelling units to its housing stock. The housing inventory in Draper has risen from 2,700 units in 1995 to 10,675 units in 2005. In just the past six years the number of new residential units in Draper has increased by 4,300 units; remarkably, 40% of all residential units in Draper have been built since 2000. The expanding inventory of residential units is shown in Table 2.23 and Figure 2.5. Table 2.23 Occupied and Total Dwelling Units in Draper City* Year Occupied Dwelling Units Total Dwelling Units 1990 1,401 1,452 1991 1,488 1,550 1992 1,639 1,707 1993 1,817 1,893 1994 2,122 2,210 1995 2,621 2,730 1996 3,368 3,509 1997 4,496 4,683 1998 5,376 5,600 1999 6,217 6,476 2000 6,874 7,160 2001 7,296 7,600 2002 8,164 8,504 2003 8,671 9,032 2004 9,437 9,830 2005 10,248 10,675 *Difference between occupied and total units is vacant units for sale and rent. Source: Bureau of Economic and Business Research, University of Utah. Figure 2.5 Total Dwelling Units in Draper City: 1990-2005 Housing Inventor 12,000 10,000 8,000 6,000 4,000 2,000 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 Year 2000 2001 2002 2003 2004 2005 Source: Bureau of Economic and Business Research, University of Utah. Bureau of Economic and Business Research 28

The vast majority of new residential construction over 80 percent - is owner-occupied, single-family homes. Most of the single-family development has been relatively low density, however, Draper has allowed a number of high-density multifamily projects. There have been four high profile apartment complexes built along the I-15 corridor as well as higher-density condominium development at South Mountain and along Highland Drive. Single-family Construction and Inventory The occupied housing inventory in 2005 in Draper City is estimated to be 10,675. Of this total, 82 percent are owner-occupied units, comprised almost entirely of detached single-family homes. The construction of new single-family homes in Draper accelerated in the early 1990s and by 1995, with the development of South Mountain, new home construction reached levels of activity that have not been matched in subsequent years. Between 1995 and 1998 over 3,000 new homes received building permits in Draper and approximately half of these new units were in the South Mountain development. The surge in single-family activity associated with South Mountain is illustrated by the data presented in both Figure 2.6 and Table 2.24. Permits Figure 2.6 Building Permits Issued in Draper City for Single-Family Homes 1,000 900 800 700 600 500 400 300 200 100 0 1990 1991 1992 1993 1994 1995 1996 1997 1998 Year 1999 2000 2001 2002 2003 2004 2005 Source: Bureau of Economic and Business Research, University of Utah. Bureau of Economic and Business Research 29

Table 2.24 Building Permits Issued in Draper City for Single-Family Homes Number of Permits Year 1990 34 1991 99 1992 128 1993 258 1994 458 1995 714 1996 919 1997 661 1998 717 1999 473 2000 336 2001 491 2002 479 2003 578 2004 677 2005 638 Source: Bureau of Economic and Business Research, University of Utah. The development of South Mountain began in 1993 with land acquisition of 1,500 acres from 30 different property owners. The developers of South Mountain were Wasatch Pacific, Christiansen Construction Services and Mugishima Construction. Located on the southeast bench of Draper, South Mountain was one of the first large master-planned communities in Utah. The project included 1,800 residential lots, an 18-hole golf course and 80 acres of commercial property. Sales began in 1995 and by 1998 most of the building lots had been developed. Three prominent national builders Pulte Homes, Ryland Homes and Richmond American as well as a number of local homebuilders were involved in the construction and marketing of the residential units at South Mountain. Currently fewer than 100 vacant lots remain in the development. The development of South Mountain was followed in 2000 by another large-master planned community, SunCrest. The developer of SunCrest is Terrabrook, a national real estate development company specializing in residential and vacation properties. SunCrest property includes 3,800 acres in Draper City. At build-out in 2012, SunCrest will have about 3,300 homes with over 10,000 residents. Eighty-five percent of all residential units in SunCrest will be detached single-family homes. As part of SunCrest s development agreement with Draper City the company built a nine-mile, $17 million road to serve the property. Over 600 homes have been built at SunCrest and another 150 are approved or under construction. These homes have been built by several local homebuilders. South Mountain and SunCrest currently account for about 20% of all residential units in Draper City. At completion these two large master-planned communities will have over 5,000 residential units with 15,000 residents. The presence of large two master-planned communities in a local housing market is a unique characteristic of Draper City. Price Characteristics of New Owner-Occupied Units As of June 2006, there were 80 active subdivisions of detached single-family homes in Draper City. These active subdivisions closed sales on 487 homes in 2005. The price for most new homes 65 Bureau of Economic and Business Research 30

percent sold in Draper in 2005 were in two broad price categories: $200,000 to $300,000 and $500,000 to $600,000. Thirty-seven percent of new homes sold were priced between $200,000 and $300,000 and 27 percent were priced between $500,000 and $600,000. Draper also has 21 active attached (condominium/townhomes) housing developments, which closed sales on 186 units in 2005. These attached subdivisions provide more affordable housing. Almost two-thirds of the condominium/townhomes in Draper City in 2005 sold for less than $150,000. Construction of Renter-Occupied Housing Only 18% of the existing housing inventory in Draper City is comprised of rental units. The current rental inventory is about 2,000 units of which 1,150 units are located in the four large apartment projects in the city: Allegro Apartments, American Heritage, Pinnacle Reserve and Liberty Hills (Table 2.25). Table 2.25 Selected Large Apartment Communities in Draper City Name Address Year Built Number of Units Allegro 292 West Galena Park Blvd. 2002 258 American Heritage 11750 South State Street 1998 152 Liberty Hills 74 East Birch Hill Drive 2004 246 Pinnacle Reserve 13343 South Minuteman Drive 1998 494 Source: Apartment communities. Residential Real Estate Market Draper City is a high priced real estate market. The median sales price of an existing home in 2005 was $318,000 while the average price was $373,181. The significant difference between the median and average price reflects the high priced character of the Draper City housing market. A few very highpriced homes push the average price nearly 20 percent above the median price. The price distribution of homes sold in 2005 shows that the first quintile (bottom 20%) of homes sold were priced under $255,000; a quarter million dollar home is in the 20 th percentile for price. The top quintile shows that 20% of homes sold were priced above $556,250 (Table 2.26). Table 2.26 Price Distribution of New Homes Sold in Draper City in 2005 First Quintile Below $255,000 Second Quintile $255,000 to $325,000 Third Quintile $325,000 to $400,000 Fourth Quintile $400,000 to $556,250 Fifth Quintile Over $556,250 Source: Wasatch Front Multiple Listing Service. The steady rise in home prices in Draper City since 2002 is shown in Figure 2.7 and Table 2.27. The table also provides data regarding the average days on market (DOM) of listed homes and number of new listings. While these two measures have some statistical weaknesses they nevertheless are suggestive of housing market conditions. In 2005, the average days-on-market for homes sold in Draper was only 50 days. This is the lowest DOM recorded in the past ten years. The number of new listings reached 1,644, an all-time high, as was the number of sales at 825 homes. With an owner-occupied inventory of 10,675 Bureau of Economic and Business Research 31

units (occupied and vacant) these data show that about one out of every twelve homes in Draper was sold in 2005. Change 20.0% 15.0% 10.0% 5.0% 0.0% Figure 2.7 Percent Change in Average Sales Price of Homes in Draper City 1.4% 6.2% 6.2% 7.6% Table 9.8% 9.1% 14.1% -5.0% -4.4-10.0% 1998 1999 2000 2001 2002 Year 2003 2004 Source: Bureau of Economic and Business Research, University of Utah. 2005 Table 2.27 Average Sales Price, Days on Market and Number of New Listings in Draper City Number of Year Average Sales Price Days on Market Homes Sold in Draper Number of New Listings 1997 $232,260 79 310 460 1998 $235,451 73 349 992 1999 $250,012 64 409 1,016 2000 $265,618 80 430 972 2001 $253,910 71 473 1,338 2002 $273,125 70 509 1,414 2003 $299,806 63 607 1,413 2004 $327,125 61 645 1,437 2005 $373,181 50 825 1,644 Source: Wasatch Front Regional Multiple Listing Service. Median sales price of a home in Draper in the first quarter of 2006 was $358,000. Only two of the 31 Zip Codes in Salt Lake County had higher median prices: Holladay/Walker Lane (84117) with a median price of $366,800 and Willow Creek (84092) with a median price of $360,900. The residential real estate market in Draper has been extraordinary and the city ranks as one of the hottest markets in the state. In 2005, the value of residential real estate sales in Draper, compared to the previous year, was up 50% to $332 million. Days on market are at a low, while the number of new listing and home sales are at record highs. These data all confirm that Draper City has great appeal for upperincome homebuyers. Bureau of Economic and Business Research 32

Nonresidential Construction Trends Highlights Since 1995 there has been $304 million in permit-authorized new nonresidential construction in Draper City. The largest single project was the $40 million Skaggs Catholic Center. Other large projects include the Coca Cola Bottling Plant, Metropolitan Water District Treatment Plant, Hidden Valley Shopping Center and Draper Peaks retail center. Draper City s inventory of office and industrial space includes 3.7 million square feet of office space and 1.9 million square feet of industrial space. Sixty percent of the office space has been built in the past 10 years and 75 percent of the industrial space. In the last ten years, significant investment in commercial development has occurred in Draper City. While nonresidential construction activity can vary dramatically from year to year, between 1995 and 2005 permit-authorized construction in Draper City totaled $304 million, an average of $27.6 million annually. In 1997, new construction value established an all-time high of $79 million due primarily to the construction of the $40 million Skaggs Catholic Center (Juan Diego High School and Elementary School). The second-ranked year is 2004 with $51 million in permit authorize new construction driven by the Metropolitan Water District s treatment plant and reservoir and the development of Draper Peaks. In addition to the $304 million in new nonresidential construction there has been another $41.2 million of construction activity since 1995 associated with nonresidential additions and alterations (Table 2.28). Table 2.28 Value of Nonresidential Construction in Draper City (in thousands) Nonresidential Year New Nonresidential Additions and Alterations Total 1995 $16,973 $48 $17,021 1996 $31,023 $1,403 $32,426 1997 $79,484 $1,698 $81,183 1998 $19,318 $2,305 $21,623 1999 $19,248 $2,432 $21,680 2000 $27,965 $5,219 $33,184 2001 $14,924 $3,972 $18,896 2002 $18,338 $5,931 $24,268 2003 $6,794 $5,537 $12,331 2004 $51,277 $8,390 $59,667 2005 $19,491 $4,311 $23,801 Total $304,834 $41,246 $346,080 Source: Bureau of Economic and Business Research, University of Utah. Since 1995 there have been ten projects in Draper City with building permit values exceeding $2.5 million. The Skaggs Catholic Center is the highest-value nonresidential project in Draper s history. Other large projects include the Swire Coca-Cola bottling facility, Hidden Valley commercial center, Draper Peaks, Draper City Hall and Metropolitan Water Treatment Plant (Table 2.29). Bureau of Economic and Business Research 33

Table 2.29 Major Permit-Authorized Nonresidential Construction Projects in Draper City: 1995 to 2005 Project Address Permit Value Year Built Description Skaggs Catholic Center 300 E 11800 S $40,144,323 1997 High School Swire Coca-Cola Plant 12600 S 265 W $9,041,472 1997 Warehouse/Office Metropolitan Water District 235 W Marion Vista Dr $8,877,575 2004 Water Treatment Water Reservoir Metropolitan Water District 235 W Marion Vista Dr $8,000,000 2004 Water Reservoir City Hall Draper City 1020 E 12400 S $5,100,000 2003 City Hall Bldg Kohl's Department Store 147 E 12300 S $4,081,701 2004 Kohl's Dept Store Hidden Valley Health Center and Commercial Center 1101 E Draper Pkwy $3,864,000 1998 Health Club and Retail Draper Peaks 1127 E Draper Parkway $2,700,000 2004 Commercial Shell Albertson's Store 11479 S State St $2,660,578 1999 Grocery Store LDS Church 13100 S 300 E $2,550,000 1997 Church Source: Bureau of Economic and Business Research, University of Utah. Office and Industrial Space Draper City s commercial sector has an inventory of 6.9 million square feet of space. About half of this inventory is in office space, with an estimated 3.7 million square feet followed by the industrial sector with 1.9 million square feet and the retail sector with 1.3 million square feet. (For the characteristics of the retail sector see section on Retail Trends). The retail sector is certainly the most conspicuous commercial sector. Residents know retail establishments and their locations. And retail sales contribute significantly to the tax base of the city. Nevertheless, the office and industrial sectors represent substantial sources of property tax revenue and reflect the economic base of the community; in Draper s case significant employment in the services and finance sectors. The largest users of commercial office space are 1-800 Contacts, ebay Inc., Advanta Bank, UNC and Musician s Friend. Four large construction companies with headquarters in Draper City also combined for a significant amount of office space use: Daw Construction, Ralph Wadsworth Construction, Wadsworth Brothers Construction and E.B. Berger, Inc. The largest users of industrial space are Ballard Medical Products and Coca-Cola Bottling Company of Salt Lake. Using data from the Salt Lake County Assessor s office, which provides information on the type of building, year built and square footage, the growth in the office and industrial inventories was estimated. The office inventory in 2005 is estimated at 3.7 million square feet. Nearly 60 percent of this inventory has been built since 1995. The rapid growth 2.15 million square feet in the inventory is shown in Figure 2.8. Industrial space has had a similar growth path, Figure 2.8. Since 1995 the square footage of industrial space has nearly quadrupled rising from a half million square feet in 1995 to 1.9 million square feet in 2005. Three-quarters of the industrial space in Draper City has been built in the past 10 years. The 1995 to 1998 period was marked by a significant increase in industrial space with the major new buildings for the Coca Cola Bottling Plant and Ballard Medical. Bureau of Economic and Business Research 34

4,000,000 Figure 2.8 Inventory of Office Space in Draper City Area (SF) 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000,000 500,000 0 1965 1968 Source: Salt Lake County Assessor 2,500,000 2,000,000 1971 1974 1977 1980 1983 Year Figure 2.9 Inventory of Industrial Space in Draper City 1986 1989 1992 1995 1998 2001 2004 Area (SF) 1,500,000 1,000,000 Major Proposed Projects 500,000 0 Source: Salt Lake County Assessor 1965 1968 1971 1974 1977 1980 1983 1986 Year 1989 1992 1995 1998 2001 2004 Highlights There is over $350 million in new nonresidential development planned for Draper City by 2009. The largest project is South Point office park followed by Lone Peak Hospital, IKEA and the LDS Temple. Notably, these new projects will serve larger market areas demonstrating Draper s transition from a local to a regional provider of goods and services. Proposed commercial developments will likely add 750,000 square feet of office space and 200,000 square feet of retail space by 2009. In addition, the potential redevelopment of the VF Factory Outlet would add several thousand square feet of refurbished retail. Bureau of Economic and Business Research 35

There are a number of multi-million investments planned for Draper City. In the next few years nearly $200 million in new development will occur in the city. The largest project, in terms of investment, is the new St. Mark s Lone Peak Hospital, which will begin construction in 2006 with a completion date in 2007. The construction cost of the hospital will be $60 million. The hospital will have 60 beds with space to expand to 105 beds. The permanent staff of the hospital will be 500 and the medical staff will include 200 physicians. Upon completion Lone Peak Hospital will be one of the top five employers in Draper City. Two other large projects are the Draper LDS Temple and IKEA home furnishing store. These two projects and the hospital all have a common element; they will provide goods and services to a much larger market than Draper City. In the case of the hospital the market is the cities in the southeast quadrant of Salt Lake County. In the case of IKEA, the market is regional, multi-county and even neighboring states. Large projects proposed for Draper City are described in Table 2.30. Table 2.30 Major Proposed Capital Investments in Draper City Project Address Comments St. Mark s Lone Peak Hospital 11900 South State Street 60-bed hospital with expansion to 108 beds when needed. Employment 500, medical staff of 200. Completion 2007. Draper LDS Temple 2000 East and 14000 South 57,000 sq. ft. facility on 12 acres 310,000 sq. ft. home furnishing retail I-15 and Bangerter IKEA store. Employment of 350. Completion Highway spring of 2007. South Mountain Towne Center 900 East Highland Drive (14000 South) Mixed use project: 112,000 sq. ft. of office, 102,000 SF of retail, 56 high-end residential units. 400-acre project by Sorenson South Point Development 14400 South Minuteman Development includes six office buildings Rd. of approximately 650,000 square feet and some retail. Several phases. Draper Peaks Phase II 12300 South Factory Rd. 100,000 sq. ft. of retail. Completion 2006. IFA Redevelopment Wadsworth Office Park Source: Draper City Planning Office 1000 East Pioneer Rd. 140000 South State Street Redevelopment of existing facility into 40 to 50 retail spaces. Phase I office building of 30,000 sq. ft. Phase II 5 office buildings total of 145,000 sq. ft.. Transportation Infrastructure Highlights There has been substantial public investment in the transportation infrastructure of Draper City. Since 1995, federal and state governments have committed $226 million to the construction of highways and roads serving Draper City. The largest investment has been $138 million in the 12300 South expansion followed by $63 million in the 11400 South State Street interchange. Draper City has funded $6.34 million of the Bangerter Extension between I-15 and Highland Drive. A light rail TRAX line is also planned for Draper City by 2014 pending approval by Salt Lake County residents of a property tax increase in November 2006. The Draper line will cost $250 million and include three stations. Bureau of Economic and Business Research 36

The transportation infrastructure has been an economic development advantage for Draper City, particularly the presence of I-15, which has created significant commercial development opportunities along 12300 South as well potential commercial development at Draper s three other I-15 exits: 14600 South, Bangerter Highway (13600 South) and 11400 South. Draper City s transportation infrastructure is dominated by a road system which includes local roads, major arterials, state roads, Interstate 15 and within a few years the light rail TRAX system. The Utah Transportation Authority s TRAX line will use the right-of-way purchased in 1993 from the Union Pacific. The inactive UP line traverses Draper City from 400 East and 11400 South to the South Point office park at 14400 South Minuteman Road. Traffic Counts - The Utah Department of Transportation collects average daily traffic counts at a number of locations in Draper City. Data from each location for selected years between 1995 and 2004 are included in Table 2.31. These data show that the two locations with the most recent traffic growth are east along 11400 South from State Street to 700 East and 1300 East at 12300 South. The dramatic increase in traffic along 11400 South is closely associated with the recent locations of Best Buy (Sandy side), Home Depot (Sandy side), Albertson s and Harmon s. Average daily traffic along 11400 South increased by 107% from 2001 to 2004. Vehicle traffic on Interstate 15 between 12300 South and 13800 South increased by 14,800 vehicles between 2001 and 2004, a 13% increase. The increase is related, in part, to the completion of the reconstruction of I-15 in 2001. This reconstruction widened I-15 to six lanes in each direction from 10600 South to 600 North. Table 2.31 Average Daily Traffic Counts Both Directions Location 1995 1998 2001 2004 EAST-WEST 11400 South Between State Street East to 700 East 11,500 6,780 7,795 16,165 12300 South Between I-15 to 700 East 10,565 23,810 27,647 28,600 Between 700 East to 900 East 9,160 15,025 16,240 17,105 At 1100 East 4,520 10,365 11,205 11,805 At 1300 East 4,520 4,740 5,125 5,400 NORTH-SOUTH State Street Between 11400 South to 12300 South 18,205 22,095 21,250 10,130 I-15 Between 12300 South to 13800 South 88,335 81,595 111,930 126,781 700 East Between 11400 South to 12300 South 10,310 11,650 10,090 12,585 900 East Between 11400 South to 12300 South 9,140 9,580 10,355 11,125 1300 East At 12300 South na 10,190 11,060 16,640 Source: Utah Department of Transportation. Bureau of Economic and Business Research 37

TRAX In November of 2006 Salt Lake County residents will vote on a $875 million property tax increase to finance the expansion of the light rail TRAX system. If approved, four TRAX extensions will be built over the next seven years. One of these extensions is the Draper line which would enter Draper at 400 East with a station at either 11400 South and 400 East or 11800 South and 600 East. A second station is likely at 12600 South and 1200 East and a third station at 14600 South and 100 West. The cost of the Draper extension is estimated at $250 million. State and Federal Investment in Transportation Infrastructure Since 1995 there has been over $226 million in state and federal highway funding invested or programmed in transportation infrastructure in Draper City, Table 2.33. The largest single investment has been the widening of 12300 South from 700 East to Bangerter Highway. This project includes a $115 million from the Centennial Highway Fund and another $23 million from other state funds. The secondlargest project is the 11400 South interchange with a budget of $62.7 million. Through 2005 the obligated amount for the interchange is $24.7 million with another $38 million programmed through 2009. Investment has also been made in what is known as traffic enhancements,, that is, bike and pedestrian trails. Draper City has more than 30 miles of bike and pedestrian trails. Over the next two years $4.2 million will be invested in five trails: Porter Rockwell Trail (11400 South to Highland Drive), Point of the Mountain Trail (Highland Drive to county line), Deer Hollow Trail (12900 South 1600 East), Parkway Trail (11400 South to 11800 South) and the Utah Power & Light Corridor (12950 South 200 West). The Metropolitan Water District will also build a three-mile trail on the Draper Canal in 2007 as part of the Point of the Mountain Aqueduct. In addition to federal and state highway funds, SunCrest, the 2,000-acre, master-planned community, has invested $17 million in a nine-mile road that provides access across their property. Table 2.32 Major State and Federal Transportation Investment in Draper City (Funds Obligated and Programmed through 2009) Project Funding 12300 South 700 East to Bangerter (CHF) $115,250,000 11400 South Interchange $62,770,000 12400 South East Frontage Road, Relocate Frontage Rd. $4,957,897 12300/12600 SOUTH; Bangerter Highway to 700 East $14,207,694 12300 So./12600 So. from 700 East to the Jordan River (Design/Build) $8,681,336 11400 South at State Street, Intersection Improvements $3,504,032 I-15 Upgrade to add lane in each direction; 10600 South to county line $15,950,000 Total $225,320,960 Source: Utah Department of Transportation and Wasatch Front Regional Council. Bureau of Economic and Business Research 38

Tax Revenues and Municipal Government Expenditures Highlights Since 1990, municipal tax revenues have increased 423 percent and expenditures have increased 585 percent, with most of the increases occurring in the last decade. Sales tax receipts have increased 923 percent since 1990, reflecting the growth in Draper s retail sector. Property tax revenue shows the most profound increase 1,661 percent over 1990 levels. In 2004, Draper municipal government received over $26 million in revenues, and spent over $22 million (Table 2.33). Since 1990, revenues have increased 422.7 percent and expenditures have risen 585.0 percent. These trends are a dramatic illustration of Draper s extraordinary growth in the past decade. As with other indicators, growth in revenue and expenditures took off after 1995. In only one year, 1993, did expenditures exceed revenues. Expenditures increased from just over $10 million in 2003 to $22 million in 2004, owing to large increases in the central administration, public safety, and transportation budgets Municipal revenues and expenditures by major category are listed in Table 2.33. Sales and use taxes, bond revenue, and property taxes constitute 58 percent of the city s revenues. Government administration and transportation accounted for over two-thirds of the city s spending in 2004. Salaries and wages, which are listed as a separate item from other municipal expenditures totaled $6.5 million. Table 2.33 Municipal Revenues and Expenditures in Draper City in 2004 Revenues Property Tax Total $4,931,433 Sales and Use Taxes $5,393,886 Franchise Taxes, License and Permit Fees $2,291,528 Impact Fees $4,138,608 Proceeds from Bond Issues $5,164,807 Revenue from Other Sources $4,725,317 Total Revenue $26,645,579 Expenditures Government Administration $7,663,469 Public Safety $4,254,470 Environment and Housing $2,700,946 Transportation $7,274,592 Interest on Debt $425,870 Total Expenditures $22,319,347 Salaries and Wages $6,461,466 Source:Center for Public Policy and Administration, University of Utah. Sales and Use Taxes In 1992, sales and use tax revenue was only $527,438. By 2005, that figure rose to $5.4 million, an increase of 922.7 percent. Sales and use taxes rose sharply in 2001, due to new retail development that came on-line that year. Sales tax revenue dipped slightly in 2003, but rose again in 2004 (Figure 2.10). Bureau of Economic and Business Research 39

6,000,000 Figure 2.10 Sales and Use Tax Revenue in Draper: 1992-2004 5,000,000 4,000,000 Value 3,000,000 2,000,000 1,000,000 Year 0 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Center for Public Policy and Administration, University of Utah. Property Taxes Property tax revenues in Draper have followed a similar trajectory to sales tax revenues. An increasingly important component to the city s overall revenues, property tax revenues rose from $280,024 in 1992 to $4.9 million in 2004, an increase of 1,661 percent (Figure 2.11). 6,000,000 Figure 2.11 Property Tax Revenue in Draper: 1992-2004 5,000,000 4,000,000 Value 3,000,000 2,000,000 1,000,000 0 Year 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 Source: Center for Public Policy and Administration, University of Utah. Government Infrastructure The Utah State Prison is the major public sector activity in Draper, with over 1,000 employees. The State of Utah has invested $33.8 million in the Utah State Prison in the past ten years, the largest project being Bureau of Economic and Business Research 40

the addition to the Uintah Secure Facility in 1996, at a cost of $11 million 5. Currently, the prison is a complex of nearly 1.1 million square feet of buildings and improvements on 670 acres of land. The prison employs 1,150 and holds approximately 3,800 inmates. The prison is near its capacity of 3,968 beds. Last year, the State of Utah commissioned a study assessing the feasibility of relocating the prison and developing the land. The study concluded that under no scenario could the state underwrite the cost of one or more new prison facilities through the sale of the land on which the Utah State Prison now stands. However, the study did conclude that the surplus land at the prison site should be sold for development. The City of Draper has made significant upgrades in its own facilities recently, completing a new city hall in 2003 at a cost of $5.1 million. The city has recently upgraded its parks and completed the $13.7 million purchase of 1,021 acres in Corner Canyon for open space as well as committing millions of dollars towards enhancing bike and pedestrian trails in the area. Salt Lake County recently added a library adjacent to the new city hall, and the Metropolitan Water District is making substantial upgrades to its infrastructure in the region. Jordan School District will open a new elementary school (Willow Springs) in July 2006, to serve the growing Draper population. While only 150 children from Draper homes attended schools in the Alpine School District this year, that number is poised to grow dramatically as the city develops its land in Utah County. 5 State of Utah Division of Facilities Construction and Management Bureau of Economic and Business Research 41

III. DRAPER IN A REGIONAL CONTEXT Draper s economic and demographic changes are part of a broader transformation that is occurring throughout the region. To understand Draper s role in the increasing urbanization of southern Salt Lake County and northern Utah County, BEBR has conducted a comparative analysis of population, employment, housing, and retail sales characteristics in American Fork, Lehi, Riverton, Sandy, South Jordan, and West Jordan. Regionally, Sandy and West Jordan are by far the largest and most prominent cities, and serve as major regional centers for retail and employment. However, Draper has exhibited some of the most pronounced growth in housing and population of all the cities in the region: it may not be the largest or the most important player in the region, but it is growing and changing more rapidly than most of the other cities under consideration. Figure 3.1 Draper and Nearby Cities Source: State of Utah Automated Geographic Resource Center. Bureau of Economic and Business Research 42