The Salt Lake City-Provo area is one of the nation's best for building a western U.S. distribution center, according to a study by a New Jersey-based corporate site selection firm.

The Boyd Company says Utah's pro-business environment makes it a prime site for companies looking to warehouse goods. Based on a hypothetical 500,000-square-foot facility employing 225 workers, the company estimates it would cost about $15.7 million a year to operate a distribution center here. Only Mohave Valley, Ariz., edged out the local market, boasting an estimated annual cost of $13.7 million. Chicago brought in the highest cost of 30 cities studied at $24.6 million annually.

Low electricity and natural gas costs boosted the local market in the ratings. Distribution opportunities should continue to grow in western states as companies import goods through West Coast ports but shy away from the heavy cost of warehousing them there, said Consultant John Boyd Jr.

"Business costs are a fraction here in Provo of what they are in California," he said. That's thanks to a combination of factors, including the corporate tax structure, regulatory climate and land costs, he said. It helps that Utah's chief executive, Gov. Jon Huntsman Jr., is decidedly pro-business.

"All of the trends are aligned," Boyd said. "You're definitely on the short list for a lot of projects."

Companies with existing distribution centers in the area include Costco, KraftMaid Cabinetry, Trane Rental Services, cosmetics manufacturer Sephora USA, diesel-powered equipment supplier Fleetguard, and USCO Logistics, which distributes JCPenney merchandise.

Utah's potential is poised to skyrocket over the next decade with the announcement that the Mexican government will seek to build a $4 billion port of its own at Punta Colonet, a small inlet on the Baja California peninsula, Boyd said. The location of Salt Lake City and Provo along the federally designated CANAMEX Trade Corridor from Mexico to Canada will make it fertile ground for warehousing operations over the next decade, he said.

• Ace Stryker can be reached at 344-2556 or astryker@heraldextra.com.