SALT LAKE CITY — Controversy over a trip state lawmakers and Utah Transit Authority board members made to court a Swiss rail car manufacturer apparently didn't scare the company from Utah.

Stadler Rail said Thursday it will open a temporary manufacturing and assembly plant in the state as part of a 15-year plan to expand in the United States. Utah is in the running for the permanent location.

"We look forward to doing business in Utah," Martin Ritter, CEO of Stadler U.S., told the Governor's Office of Economic Development board. The board voted unanimously to offer the company up to a $10 million incentive package to remain in the state.

Stadler has a $106 million contract to build rail cars for TEXRail in Forth Worth, Texas, over the next two years. It will decide over that time where to build its North American manufacturing plant.

"We see the first two years as a job interview for the state," said Theresa Foxley, GOED managing director of corporate recruitment and business services.

Temporary placement

Stadler is looking at the UTA's Warm Springs maintenance facility and sites in Tooele County for its temporary home, Foxley said.

In September, legislative leaders, lobbyists and two UTA board members met with Stadler executives on a trip that came to light through a public records request by the Deseret News and KSL. Neither board member informed UTA before traveling to Switzerland.

Chris Bleak resigned last month, citing work-related reasons. Sheldon Killpack remains on the board.

After finding out about the trip, UTA abruptly canceled a competitive bidding process to lease space at the Warm Springs facility because Stadler was one of the bidders. The transit authority has since re-opened the process but has not selected a possible tenant.

UTA had to get Federal Transit Administration approval to change the bidding process last year after it learned Stadler was interested. It was negotiating to lease the space to another company at the time. UTA needs federal permission for a lease to an outside company because federal money was used to remodel the maintenance facility.

The Switzerland trip also caught GOED unaware, prompting it to scramble to send a representative with the Utah contingent to make sure legislators didn't make promises the state couldn't keep.

A history of acquaintance

Foxley said GOED has been working with Stadler Rail since March. But state lawmakers' relationship with the company goes back about two years.

Rep. Jake Anderegg, R-Lehi, became acquainted with the multibillion dollar company through a distant relative who served as the Swiss consul general. That led to legislative leaders meeting with Stadler Rail Group owner and CEO Peter Spuhler in Switzerland.

Lawmakers and other policymakers nurtured the relationship until the company made the deal with TEXRail and then the state's business recruiters got involved, Foxley said. Controversy over the September trip, she said, didn't deter the company.

"Stadler remained steady as being very enthusiastic about Utah as a location for this short-term facility and, of course, we're optimistic that it will turn into a long-term benefit for the state," she said. "We've got a great set of resources here that they have confidence in as they're entering the U.S. market."

Spuhler said in a statement Wednesday that Utah is a great place for the final assembly of Stadler's trains and "conditions here are ideal."

At 'home' in the mountains

"Coming from Switzerland, we also feel right at home in the beautiful Utah mountains, and are very envious of the amount of snow that falls in the region," he said.

Stadler Rail has 6,000 employees at 12 sites. It has built rail cars for transit systems throughout Europe and in Brazli.

If Stadler chooses Utah, it would create 1,000 jobs over 15 years, generating an estimated $40.2 million in payroll, corporate and sales taxes, officials said. Under the proposed contract, average wages must exceed 110 percent of the county average. In Salt Lake County now that would put average annual pay at about $53,000.

As an incentive, Stadler could earn up to 25 percent of the new taxes it would pay over that period. GOED also approved post-performance incentives up to $10 million, including tax credit rebates and a grant from the state's industrial assistance fund.

Landing the company, which board members described as "A list" and a "shining star," would be great for Utah and the country, Foxley said. Stadler would compete with the Candian company Bombardier and Germany-based Siemens, which already have locomotive plants in the U.S.

"It introduces a new element of competition that would benefit transit agencies across the United States," she said.

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