Consultant: Rail, utility access move up on priority lists
Apr 09, 2025 11:24AM ● By Brice Wallace
Access to rail service, like at this Woods Cross crossing, and to utilities have advanced as site selector considerations for their corporate clients. Photo by Becky Ginos
Companies looking for sites for new operation locations and their consultants have a long list of considerations: labor costs and availability, quality of life, land availability, regulatory environment, construction costs.
But moving up as priorities are access to utilities and rail, according to a consultant at the recent Northern Utah Development Symposium in Ogden.
Kathy Mussio, managing partner at Atlas Insight, noted that labor costs are always at the top of lists for site-selector consultants and companies considering new locations. But a recent survey indicates that for companies, energy availability is No. 3 and energy costs are No. 4. For consultants, energy availability is No. 1, above available land and skilled labor. Energy costs are No. 6.
While rail access was on neither list, Mussio said it has nonetheless become a major factor in decision-making as companies consider its impact on supply chains.
“If you have a rail-served site and a site that’s ready to go, you’re going to be in the mix [for possible selection], even if other things about your community aren’t going to score well, because sometimes it’s all about who has the site or the building,” she told the audience at the event, presented by Weber County Economic Development and the Northern Utah Economic Alliance.
That is especially true for manufacturers, who prefer existing buildings whenever possible, she said.
“More manufacturing projects are wanting build-to-suits, and there just aren’t good, available, development-ready sites, especially with sufficient utility capacity … and rail. There are more rail requests. It used to be that rail for some projects was a want – a want, not a must – and now we’re seeing more of these build-to-suit projects for manufacturing clients where rail is a must, especially mainline-served rail. [There’s] not a lot of these sites everywhere, so if you have any, speak up now.”
The nation as a whole has electricity generation and transmission issues, and companies with industrial projects want to avoid those, Mussio said.
“There continues to be the worry of electricity and availability. Power is an issue. That last-mile transmission is an issue – the time it takes for transformers and switch gear to be manufactured is an issue.”
Having available land or an existing building, along with rail and utility access, shortens the time for companies to get operations up and running, compared to putting all those things in place. And for many companies, time is a higher priority than project cost.
“Some projects are cost-sensitive. … It might come down to what location has the shortest payback hurdle, how many months or years to get their money back and what they’re going to outlay for the project,” she said. “I want to give one caveat, which is if a building or site can’t be delivered in time to meet a company’s needs, it doesn’t matter what the cost differential is. That site’s going to be eliminated because, at the end of the day, it’s all about operational needs.”
Without a lot of rail-served land and with three or four years of manufacturing projects “on steroids,” industrial property with that rail access “has gotten snapped up,” she said, adding that “if you don’t have a building, you’re not going to be able to respond.”
Communities desiring projects can help ease companies’ fears by providing an overview of utility infrastructure to an available site or building, and by providing solutions and estimates of costs and timing for necessary upgrades to make that location work, she said.
Mussio listed overall trends in site selection. In the 2000s, the projects that were hot included energy development, data centers, e-commerce and software development. In the 2010s, they focused on health care and life sciences, logistics and warehousing/e-commerce, and advanced manufacturing. Currently, it’s about electric vehicle batteries and data centers, although some communities have pushed back against data center projects because utilities say they cannot meet those projects’ electricity demands.
Northern Utah has seen a recent surge in food and beverage manufacturing, with major projects everywhere from Cache County to Salt Lake County. The area also has benefited from companies moving operations out of costly California. It’s an “ABC” philosophy, meaning “anywhere but California,” which took hold during the COVID pandemic. Companies may keep their headquarters in the Golden State but are always looking to move accounting, back office and manufacturing to less-expensive places.
“That still holds true,” Mussio said. “The reason I mention that is I think Utah has been a recipient of the ‘anywhere but California’ [philosophy] and I think that will continue to be the case. Nothing against California, but I mean, come on, the taxes and regulatory environment, they’re not doing themselves any favors.”
Mussio stressed to the audience the importance of being prepared during site visits, when selectors get tours of locations on behalf of their clients. Those visits typically involve meeting with local economic development officials and with companies in the same industry to better understand what it is like to work in a particular community. Economic development officials in Utah have repeatedly stressed that getting companies to visit Utah is a key to selling them on the state.
“It’s interesting,” she said. “These site visits, they can sometimes propel a community that was on the bottom of the short list, to the top, and it oftentimes takes the community you think is the preferred location at the top, to the bottom, or eliminates it.
“So, these site visits are critical and it’s really the best way to eliminate sites, which, at the end of the day, is what we’re looking to do: eliminate sites to get to the best-fitting site.
“You don’t have to sell me; I’m sold,” Mussio said about Utah. “The fact that these mountains up and down the [Wasatch] Front are in view calls to me. I know that Utah is a good place to do business. I’ve done projects here. I love the state. So hopefully my friends in the industry that have not had the opportunity to do projects in Utah will also learn about its advantages and discover the same things that I have.”