Monday Report

From Bonneville Research May 4, 2009
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Economic Notes:
McKinsey Global Survey - April 2009
Executives are slightly more positive about the bigger economic picture than they were six weeks ago, and some see hope for their companies toward the end of 2009. Strong majorities support international coordination of responses to the crisis and say protectionism would harm their nations' economies.
Global Business Confidence -21.9%
Global business sentiment is improving. Confidence remains very weak, but it improved last week to its best level since late last October. Much of the improvement has been in Asia and South America, although sentiment is more upbeat everywhere. Expectations regarding the outlook six months hence are particularly buoyant. Current sales strength remains the notable weak spot; it has yet to show any gains. It is premature to conclude that the global recession is ending, but recent survey results are somewhat encouraging.
Economic Risk
The economy's free fall is over. Not that the recession has ended-the economy continues to contract-but the rate of decline is slowing. The bottom remains months away, but it is finally coming into view.
Durable Goods (Advance) -0.8%
New orders for manufactured durable goods fell 0.8% in March following a 2.1% increase in February. This marks the seventh time that new orders have fallen in the past eight months-February's increase appears to have been temporary rather than a signal of a turnaround. Orders excluding transportation were down 0.6%. Shipments fell 1.7% in March, the eighth consecutive monthly decline. Both inventories and unfilled orders were down as well.
Chain Store Sales
Chain store sales results in the second week of fiscal April were mixed but generally consistent with recent signs of firmer spending growth
New-Home Sales (C25) -0.6%
Sales of new homes were down slightly in March compared with February, but the Census Bureau substantially revised upward the February sales figure. A 0.6% m/m decline in March brings sales down to 356,000 annualized units. This pace of sales is above expectations. Months of inventory continue to decline, falling below 11 months. The median sales price is down by 12% y/y. Demand for new homes appears to be improving.
Household balance sheets are deteriorating rapidly. It is hard to find a way of looking at balance sheets where conditions are not getting worse. Delinquencies and defaults continue to surge, even as government action takes aim at limiting foreclosures. Substantial declines in household wealth may have larger long-run implications for consumer behavior. As consumers become less trusting in their wealth, they will likely increase their saving at the expense of spending growth. Currently, they are doing this aggressively. Some of the current change is the typical cyclical change that takes place during a recession, but the shock has been sufficiently large so that some of the change in behavior will persist.
Public Policy Initiatives:
  • WI - Doyle Expands Crime Victim Network.  Gov. Jim Doyle announced the expansion of the Wisconsin Victim Information and Notification Everyday Service. The service is an automated system for victims to receive timely information about the location and status of criminal defendants and convicted offenders in county jails and other facilities. "This new statewide system will help us to keep our communities safer and more informed," Doyle said. "Now, through the assistance of our law enforcement partners and other stakeholders, we will be able to offer crime victims key information about convicted offenders and defendants in Wisconsin and alert them to any changes in their status."
  • MA - Patrick Files Broadband Legislation, Prepares for Recovery Funds. Gov. Deval Patrick has filed legislation to help leverage federal economic recovery funds to boost broadband services throughout Massachusetts. "This bill builds on our commitment to provide broadband access to all areas of the Commonwealth, and positions the state for long-term economic growth," said Patrick. "This effort will also help streamline state zoning and permitting rules to expedite the availability of this enabling technology." http://www.allamericanpatrithe-commonwealth-fo
    WI - Doyle Announces Recovery Funds for Food Pantries. Gov. Doyle says the tough economy has created unprecedented demand at local soup kitchens and food pantries. More help is headed to food pantries, homeless shelters and meal sites in Wisconsin. Sixteen organizations that help distribute food and other goods to local pantries and shelters will get $2 million from the American Recovery and Reinvestment Act. The $2 million in goods will be distributed to more than 300 locations across the state through The Emergency Food Assistance Program.
  • KY - Beshear Works to Increase Renewable Energy Use. As a leader in advancing new sources of energy in a state highly dependent on fossil fuels, Gov. Steve Beshear announced that he is joining the U.S. Governors' Wind Energy Coalition. Gov. Beshear also announced that he is endorsing the national 25x'25 Action Plan. "The increased use of renewable energy sources in Kentucky will greatly increase our energy security and minimize our carbon footprint, while relying on Kentucky's vast natural resources and boosting Kentucky business sectors, such as agriculture and various emerging growth companies," Gov. Beshear said. http://www.allamericanparenewable-energy-use-in
  • IA - Culver Signs Wind Energy Bill. Gov. Chet Culver said that Iowa is proving to the rest of the nation that an energy-independent future is within reach. "It's a great day in Iowa in the realm of renewable energy," Culver said before signing into law two bills designed to expand Iowa's wind energy industry. "With my signature, these bills will continue Iowa's efforts to chart its own course toward energy independence," he told attendees at a bill-signing ceremony. "By doing so, we'll continue to create jobs in every part of the state, and strengthen our role as a national leader in both the business and the practice of energy production."

Improve Broadband to Rural and Indian Areas!
Community Connect Grant Program
POSTED: 4/20/2009
ELIGIBILITY: Nonprofits, Indian Tribes, and States
$ AVAILABLE: $13,406,000
MAX GRANT SIZE: $1,000,000
DEADLINE: 6/19/09
DESCRIPTION: Funds to provide broadband and Internet access to underserved rural areas, including Indian lands.
Stimulus Bill Grants for CDFIs!
Community Development Financial Institutions Program

POSTED: 4/26/2009
FUNDING SOURCE: Dept. of the Treasury
ELIGIBILITY: Certified Community Development Financial Institutions (CDFIs)
$ AVAILABLE: $55,000,000
MAX GRANT SIZE: $2,000,000
DEADLINE: 5/27/09
DESCRIPTION: Financial assistance grants to fund a wide array of community development, affordable housing and economic development projects sponsored by CDFIs, which are nonprofits or credit unions certified to participate in the program that lend or invest in their communities. These are supplemental funds authorized for new applicants by the Stimulus Bill.

Bonneville Research is a regional consulting firm focused on consulting services to state and local governments including economic analysis for real estate development, public-policy analysis, tourism and economic development. Since its founding in 1976, Bonneville Research has completed assignments throughout the intermountain west yielding unmatched experience in high quality public policy analysis and economic analysis.

In broad terms, Bonneville Research assists state and local governments find workable solutions and to establish quality and sustainable public policy.  We often work with private developers and public agencies in assessing the future economics and outcomes of real estate projects, economic development plans and opportunities for public/private partnerships. Bonneville Research offers a diverse array of economic analysis and tools to answer complex problems.
  • Market and Financial Feasibility Analysis
  • Concept and Development Programming
  • Operational Analysis and Budgeting
  • Service Delivery and Cost Effectiveness Analysis
  • Business Organization and Marketing Strategies
  • Services Repositioning and Disposition
  • Economic Development Plans
  • Demand Assessment for Public and Cultural Facilities
  • Public-Private Partnerships
  • Economic and Fiscal Impact
  • Grant-writing/Fundraising

Fusing talents of a multi-disciplined staff, the firm's experience has concentrated in four interrelated fields:

  • Economic development and community planning
  • Law enforcement, fire and public safety
  • Recreation, tourism and leisure time
  • Management, benchmarking and best practice services
Bonneville Research
170 South Main Street, Suite # 775
Salt Lake City, Utah 84101


Bob Springmeyer
Bonneville Research
In This Issue
Economic Notes:
Public Policy Initiatives:
This Weeks Leads:
Recent Bonneville Research Projects:
April 2009 Sales Tax Distributions
Who is up! 
by Dollars, City/County, Dollar Change 2008 - 2009, % Change
1 Lehi $52,162 13.4%
2 South Jordan $36,781 7.0%
3 Riverton $14,027 4.5%

Who is down! 
Rank by % Change, City/County, Dollar Change 2008 - 2009, % Change 
1 Park City -27.0%
2 Murray -21.6%
3 South Salt Lake -20.4%
4 Cedar City -19.3%
5 Vernal -18.8%
6 St. George -18.0%
7 Summit County -17.6%
8 Riverdale -17.3%
9 Cottonwood Heights -16.8%
10 West Valley City -15.0%
11 Layton -14.5%
12 Salt Lake County -14.5%
13 Spanish Fork -14.5%
14 Orem -13.7%
15 Taylorsville -13.6%
16 Springville -13.2%
17 Salt Lake City -13.1%
18 Sandy -12.9%
19 Ogden -12.2%
20 Provo -11.2% 
Rank by Dollars, City/County, Dollar Change 2008 - 2009, % Change 
1 Salt Lake City  -$462,969 -13.1%
2 West Valley City  -$245,094 -15.0%
3 Salt Lake County  -$233,808 -14.5%
4 Murray -$223,419 -21.6%
5 St. George  -$202,506 -18.0%
6 Orem -$185,852 -13.7%
7 Sandy -$181,972 -12.9%
8 Park City -$145,933 -27.0%
9 South Salt Lake  -$145,501 -20.4%
10 Provo -$135,455 -11.2%
11 Layton -$133,334 -14.5%
12 Ogden -$124,133 -12.2%
13 Taylorsville -$84,908 -13.6%
14 Vernal -$74,131 -18.8%
15 Cedar City  -$71,845 -19.3%
16 Summit County -$70,124 -17.6%
17 Cottonwood Heights  -$70,082 -16.8%
18 West Jordan -$65,205 -5.6%
19 Riverdale -$58,691 -17.3%
20 Logan -$50,972 -9.0%
21 Bountiful  -$48,385 -10.7%
22 Draper  -$46,469 -8.8%
23 Midvale  -$43,779 -10.7%
24 Spanish Fork  -$41,880 -14.5%
25 American Fork -$38,860 -9.0%
26 Springville  -$38,486 -13.2%
27 Roy -$35,321 -11.1%
28 Tooele City -$27,821 -8.1%
29 Holladay -$22,415 -8.8%
30 Pleasant Grove  -$21,934 -7.9%
Source: Utah State Tax Commission, 4/27/2009
Note: Sales Tax Distributions are the actual tax receipts each local government receives from the State Tax Commission.  They will closely correlate to actual retail sales, but not exactly due to the population portion of the distribution formula (50&/50%), sales that cannot be attributed to a particular community, and prior period adjustments.

Fast Frame USA, Inc. trades as Fast Frame at 300 locations nationwide and internationally.  The stores, offering custom framing, artwork and accessories, occupy spaces of 1,500 sq.ft. in strip centers.  Growth opportunities are sought nationwide during the coming 18 months.  Typical leases run five years with options.  The company prefers to locate in upscale shopping centers with major anchors.  The company is franchising.
 For more information, contact:Brenda Hales, Fast Frame USA, Inc., 1200 Lawrence Drive, Suite 300, Newbury Park, CA 91320

J. Crew Inc. trades as J. Crew in 212 locations, J. Crew Factory Outlet in 75 locations, and Crewcuts in six locations nationwide. The stores occupy spaces of 4,500 sq.ft. to 5,500 sq.ft. in malls, urban/downtown areas and lifestyle and specialty centers. Growth opportunities are sought throughout the existing markets during the coming 18 months. Typical leases run five years with two, five-year options. Preferred demographics include a population of 200,000 within 10 miles earning $75,000 as the average household income. Preferred cotenants include Ralph Lauren, Neiman Marcus, Nordstrom, Banana Republic, Ann Taylor, Abercrombie & Fitch, Gap and Talbot's.
For more information, contact: Holly Cohen, J. Crew, Inc., 2 Penn Plaza, 26th Floor, New York, NY 10121

Panchero's Franchise Corp.
trades as Panchero's Mexican Grill at 53 locations throughout CO, FL, IA, IL, MD, MI, MN, NC, ND, NE, NJ, PA, SD, TX, VA and WI.  The Mexican restaurants occupy spaces of 2,200 sq.ft. to 2,400 sq.ft. in freestanding locations and lifestyle, power and strip centers.  Plans call for 10 openings throughout Phoenix, AZ; FL; NJ; VA and Washington, DC during the coming 18 months.  Typical leases run 10 years.  A vanilla shell and specific improvements are required.  Preferred cotenants include Target, Best Buy and big box retailers.  Preferred demographics include a population of 20,000 within two miles earning $55,000 as the average household income.  Major competitors include Chipotle and Qdoba Mexican Grill.  The company is franchising.
For more information, contact Nanette Boyer, Panchero's Franchise Corp., 2475 Coral Court, Suite B, Coralville, IA 52241
Recent Bonneville Research Projects:
Annexation Study - Heber City, Utah
Nestled in Utah's Wasatch Mountains and adjacent to Park City, Heber City is the economic hub of rapidly growing Wasatch County.  Bonneville Research recently concluded an effort for a major commercial and housing developer on a strategy to develop a large 60 acre parcel adjacent to the central core of Heber City.  Bonneville Research evaluated the current and future growth trends in the Heber Retail Center general market area, considering the current and future retail, commercial and residential development potential in the market area.  Of particular importance to Heber City public officials was the detailed analysis of the net economic benefits to Heber City as a result of the proposed retail, commercial and residential development options at the 60 acre site.  The issues considered included a net present value analysis of the economic impacts and 15 year projections of:
* Incremental Property Taxes
*  Incremental Sales Taxes
* Impact and other Development Fees
Bonneville Research also evaluated the net incremental service delivery costs to Heber City as a result of the proposed retail, commercial and residential development options at the site, including:
* Core municipal services to include police, fire, public works, planning, streets and recreation.
* Administrative and support services to include Courts, general administration and capital investments in land and buildings.
The Bonneville Research report was adopted unanimously by both the Heber City Planning Commission and City Council.
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