Orem and Provo might have differing philosophies on economic development, but officials from both cities say they're only trying to build a tax base.
However, with a new mall in Provo luring away JC Penney from University Mall in Orem, and with Orem offering an incentive package for Provo/Orem Ford to relocate from Provo to Orem, many think the two cities have declared economic war.Officials from both cities say that is not the case. Because they are adjoining cities they often compete for the same business. Also, the two cities have different commercial makeups, which means they often have to use differing development philosophies. Both cities say they're just involved in normal development competition and not concerned about getting economic revenge.
"I'm not sure that either of the two cities feel that strongly about it," Provo Economic Development Director Leland Gamette said.
"We're just looking out for what is best for our community," Orem City Manager Jim Ream said.
Economic development in Utah County has been cyclical. A couple of decades ago Provo was the commercial hub and generated most of the county's sale tax revenue. Now, Orem generates about $10.5 million in sales tax and Provo $8 million. The new Provo mall could balance those numbers.
Still, officials from both cities stress that recent deals were not geared to taking away the other city's business.
Provo says it began working on the new mall idea several years ago to keep Sears from moving. The intent of the new mall is not to take away business from University Mall. That might happen, but the mall is mainly being built because of growth in south Utah County.
"This mall was going to happen, either way, here or somewhere else in this valley," Gammette said.
Ream said Orem didn't go out and lure Provo/Orem Ford to Orem. After efforts for the dealership to find a new location in Provo stalled, the dealership approached Orem. The company has less than two years remaining on its lease in Provo and needed to know where it will be in the future.
"When we're approached by a businessman we'll visit with them and talk to them," Ream said.
Most observers believe, however, that the two cities do differ in the way they handle economic development. Orem is considered as one of the more incentive-oriented cities in the state. But Ream said the city doesn't offer any economic incentives that don't have a long-term benefit to the city.
"It is always based on the potential for revenue," he said.
In fact, some say changes in the state's redevelopment laws came about because of how Orem misused the laws about five to 10 years ago to attract new business. With most of Orem's land now developed, and because of criticism, the city has toned down its aggressiveness.
"I think we examine the issues more closely now. There's a little different approach," Ream said. "We're very protective and selective with the commercial area we have left."
Provo officials say they're more concerned with keeping existing business than attracting new. Most of Provo's incentive deals are designed to make an existing business competitive.
"We try to be supportive and help out, but we don't go overboard," Redevelopment Director Ron Madsen said.
But Provo also uses the tools of redevelopment for many commercial projects. Mostly, Provo uses incentives to bring land costs down. In the case of the new Provo mall, the developer will get about $7.5 million in incentives to help lower the cost of acquiring and clearing the land.
"In order to put the package together there was a lot that a private developer could not do," Madsen said.
City administrators tried to do the same to build an auto mall in south Provo, but businesses in the area protested and the City Council balked at the plan. But the city is still working on an incentive package to build an auto mall in north Provo on University Park-way.
A glaring difference between the two cities is available space and commercial access. This difference accounts for much of the differing philosophies.
Most of Provo's developable land is gone. That's why the city uses redevelopment packages to make land available. Orem, on the other hand, still has clear areas that could be developed, but they too are disappearing fast.
Orem has much more freeway visibility than Provo, and Provo really only has one major freeway access that passes through a commerical area - south University Avenue. Orem has four freeway interchanges that exit into commercial areas, and most of I-15 through Orem runs along a commercial corridor.