FasTracks Spurring Development at the Denver Federal Center

The Denver Post has an interesting article about the new Federal Center Master Plan and Preferred Development Alternative. This new plan provides further evidence that FasTracks is spurring Transit Oriented Development, real estate redevelopment, region-wide economic development and helping to change land use patterns, even before the tracks are laid and the trains are operating.

Image taken from Denver Federal Center Website.

ConocoPhillips is Mystery Buyer of StorageTek Campus in Louisville

The Metro Denver Area received a tremendous economic development boost when Governor Ritter announced that ConocoPhillips was the mystery buyer who purchased the former StorageTek Campus in Louisville for more than $55 million. The energy giant plans to build a Global Technology and Corporate Training Center which will focus on the development of new technologies for renewable energy and consolidate world-wide employee training. It is appropriate that this announcement was made by Governor Ritter who has made alternative energy a keystone of his early governorship.

Despite the complaints of skeptics that this is not bringing a new corporate headquarters to Metro Denver, this is a huge boon for the Colorado economy for a number of reasons. It will provide new jobs and it will also lead thousands of people each year to visit the area to attend training classes, boosting local travel, hospitality and leisure spending. More importantly it will provide a key piece of the puzzle for the emerging green portion of the energy cluster in Colorado.

For a technology-based economic cluster to succeed, a region needs a critical mass of vertically-related producers, suppliers, distributers, sellers and consumers and researchers. The presence of ConocoPhillips will add serious financial muscle and prestige to the local green energy cluster. When a cluster reaches a critical mass, the economic power of the whole becomes greater than the sum of its parts, creating a strong positive economic externality drawing other related companies and investments to the region - ConocoPhillips will help make this a reality for Metro Denver.

Additionally, the presence of an energy company in the U.S. 36 Corridor will help diversify the commercial real estate market and local tax base in Broomfield/Louisville which is dominated by technology and telecommunications companies.

This is a fascinating case study in site selection decision-making. Although the energy sector is one of six areas targeted for recruitment by the MDEDC, senior economic development officials such as Tom Clark at the MDEDC and Don Elliman at the Colorado Office of Economic Development were not even aware that ConocoPhillips was considering this site and public speculation on the identity of the site's buyer centered on internet and computer companies. ConocoPhillips apparently made this decision entirely on its own without receiving tax credits or other economic development incentives or lobbying. This is great news for Metro Denver because it means we are competitive without needing to spend public funds to land jobs.

There are several factors which drove this decision. According to Perry Pearce, manager of state government affairs in Colorado for Conoco Phillips as quoted in the Rocky Mountain News, regional academic and research institutions were a key reason for this site selection:

"When you look at the institutions here — the National Renewable Energy
Laboratory, Colorado School of Mines, CU, CSU and DU — those sorts of central
research and educational centers contributed to the attractiveness of this
site."

These institutions are linked together by the Colorado Energy Collabaratory which is a research partnership "dedicated to performing world class research to develop new energy technologies and to transfer these advances as rapidly as possible to the private sector."

There is a rapidly growing base of private renewable energy companies involved in wind, bio-fuels, solar and other green energy areas in Metro Denver. This presence is indicative of a highly qualified local labor pool and potential collaborators and partners for ConocoPhillips.

The excellent transportation links at this campus probably also played a huge role in the site selection decision. The campus location on Highway 36 between Denver and Boulder provides easy access to the super-quick and uncongested Northwest Parkway and E470 toll roads which connect to DIA making it very easy for people from around the world to get to/from the campus on training visits.

With oil in the $100 a barrel price range, developing countries like China and India using ever larger amounts of energy resources and increasing concerns about the impact of carbon emitting energy sources on global warning, investment in and use of alternative energies is becoming increasingly financially viable and socially critical. If Metro Denver can establish itself as a core location for the green energy cluster, it is likely to bring long-term economic growth to the region. This could well be a sector which is poised for huge long-term growth capable of creating wealth on a scale similar to the development and commercialization of the internet.

Although this is a big win for the region, Metro Denver has many strong competitors who want to build green energy clusters. According to an Economist article from May 24, 2007, Silicon Valley, Boston, and Austin have all had more venture capital invested in clean technology companies than Metro Denver. Other places such as New Jersey, Arizona, Toledo, and Seattle also are trying to establish clean-tech clusters. It will take continuing political support, aggressive efforts by regional economic development officials and wise public investments in education and regional infrastructure to keep attracting further investment in green energy to the Denver Metro Area.

Metro Denver should also come up with a clever and memorable nickname for the region's renewable energy cluster like "GreenFoothills"or "Renewable Prairie" to keep the region in the "front of the mind" for green entrepreneurs and corporate decision-makers.

Ranking Denver Using Florida's Technology, Talent and Tolerance Criteria

In my recent blog entry about Metro Denver's historical connection to the Beat Generation and ongoing concentration of Bohemians, I discussed Richard Florida's work on what he calls the creative class. Florida defines this group as:

"engaged in science and engineering, research and development, and the
technology-based industries, in arts, music, culture, and aesthetic and design
work, or in the knowledge-based professions of health care,
finance and the law." (Cities and the Creative Class, p. 3)

Additionally, Florida theorizes that three interdependent factors help explain why some economic regions have been successful in the new knowledge-based economy and others have not.

"The key to understanding the new geography of creativity and its effects on
economic outcomes lies in what I call the 3 T's of economic
development: Technology, Talent, and Tolerance. Creativity and the members of the
Creative Class take root in places that posses all three of these critical
factors. Each is a necessary, but by itself insufficient, condition. To attract
creative people, generate innovation, and stimulate economic development, a
place must have all three. I define tolerance as openness, inclusiveness, and
diversity to all ethnicities, races and walks of life. Talent is defined as
those with a bachelor's degree and above. And technology is a function of both
innovation and high technology concentrations in a region." (Cities and the
Creative Class, p37)."

This raises the obvious question of “How does Metro Denver compare to other regions in the United States?”

The table taken below is from the Appendix in Florida’s book Cities and the Creative Class which was published in 2005 and some of the indices are likely substantially older than that. However despite the age of the data, it does provide a recent historical reference point from which to analyze Denver's economic position from a Floridian perspective.

The Tech-Pole Ranking comes from the Milken Institute and is based on a region's location quotient of high tech output. According to the Tech-Pole Index, Denver is the 13th ranked high tech region in the United States. Denver's ranking on the Tech-Growth Index (10) and Gay Index (8) are higher than its Tech-Pole Ranking but its rankings on the Composite Diversity (17) and Melting Pot (29) indices are below its Tech-Pole Rankings. Its Bohemian Index rank of 14 is very close to its Tech-Pole Index rank. These rankings seem to fit pretty well with my anecdotal understanding of Metro Denver's demographics. As an inland city, away from the coasts, Denver has a relatively small percentage of foreign-born residents.

This data also got me thinking that the college town of Boulder (also my hometown), probably plays a key role in contributing to the region's strong Tech-Pole, Tech Growth and Bohemian rankings but relatively lower diversity rankings. Boulder is part of the Denver Metro Region and is home to several national laboratories and the State of Colorado's flagship university. It also has a relatively ethnically homogenous population with a large percentage of tech companies and workers and long-standing ties to counter-cultural movements.


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Anticipating Wild Card Events in Planning for the 2008 Denver Democratic National Convention

As everyone knows, Metro Denver is preparing to host the Democratic National Convention (http://www.demconvention.com/) from August 25 to 28 2008. Back in July 2007 I blogged about the opportunities and risks for Metro Denver of hosting this event (http://aviewoftherockies.blogspot.com/2007/07/con.html).

Since my blog entry back then, as the campaign season has evolved, several ideas have come into clearer focus for me. The convention will be a historic and exciting event and, for the reasons discussed below, is likely to attract more than a normal convention's share of global attention. With the certainty that the Democrats will nominate either the first female or first African American major party candidate for President of the United States, the campaign season is shaping up to have a landmark, historic atmosphere. Voter turnout in Democratic primaries and caucuses has been tremendously high.

The competition between Barack Obama and Hillary Clinton for the nomination is intense and is very likely to be closely fought until late into the primary season. There is a strong chance that neither candidate will have enough pledged delegates from primary and caucus results to obtain a majority of total delegates and decide the nomination. This means that votes from super delegates, party officials and grandees who are not chosen by the primary voters, would be required for either candidate to achieve a majority of total delegates and secure the nomination. This could lead to a tense and acrimonious convention. There is even the remote possibility of a brokered convention where neither candidate has enough support to clinch the nomination in the first round of voting. These types of scenarios would drive interest in the convention even higher and could lead thousands more people to descend on Denver than are currently being planned for.

Already there are large contingents of anarchists, antiglobalization advocates and other similar groups with names like "Recreate 68" and "Unconventional Action" who are planning to stage protests, demonstrations and disruptions in Denver. See for example this article in Westword (http://www.westword.com/2008-01-24/news/anarchists-stalk-democratic-convention).

Given the very high profile nature of this convention and the likely accompanying street level theatrics surrounding the event, the stakes and risks are unbelievably high and growing for Metro Denver. The region has to "thread the needle" by staging a safe, secure and exciting convention that allows the Democratic Nominee to shine and that showcases Metro Denver to the world in positive light while at the same time making sure that security enforcement and police action are not too heavy-handed and do not trample legitimate free speech. This excellent blog entry from Colorado Confidential (http://coloradoconfidential.com/showDiary.do;jsessionid=05CFFC53FD194861C44651A13BFC01FC?diaryId=3338) discusses the approaches taken by Boston and New York for the 2004 Republican and Democratic National Conventions. Denver clearly has less historical experience than New York or Boston in hosting these types of high profile events.

I understand that the City of Denver is reaching out to near-by police jurisdictions for help providing extra police officers during the convention. (http://cbs4denver.com/local/police.denver.convention.2.560924.html). Securing extra police is a great first step. But the city needs to make sure that it adequately forecasts all possible risks and contingencies by engaging top level law enforcement officials, intelligence agencies, security experts and risk planners. In addition to high probability scenarios, officials need to brainstorm possible wild cards which can be defined as "low probability high-impact events which happen quickly" (See Out of the Blue How to Anticipate Big Future Surprises by John L Peterson, p. 4). Examples of possible wild cards include acts of nature, civil unrest, infrastructure sabotage or terrorist attacks. By their very nature, wild cards are extremely difficult to anticipate and plan for.

Planning miscalculations, lack of contingency options or failures to respond with nimbleness to rapidly evolving events during the convention could have catastrophic consequences for the perception of Denver by people around the world. This convention is a once-in-a-lifetime opportunity for the Denver Metro Area and planners have to ensure that it has a positive impact on the global perception of the region.

On the Road in Denver: Beatniks, Bohemians, the Creative Class and the Economic Geography of Talent

I recently visited the New York Public Library’s exhibit on Jack Kerouac and his seminal 1957 novel On the Road and it reminded me that the City of Denver is one of the important stops on the in the legendary journeys chronicled in the novel and that Metro Denver has its own unique connection to the history of the Beat Generation.

Figure I: Cover of On the Road by Jack Kerouac

Figure II below is a map from Kerouac’s journal of the 1947 road trip that ultimately inspired him to write On the Road.













Figure II: Hand Sketched Map from Kerouac’s Personal Journal of the 1947 Road Trip Which Inspired On the Road

Note that Figure II to the left could just as easily be a partial map of important cross country rail networks, or of internet backbone routes. On the Road implicitly points out that Denver has long been an important economic, cultural and transportation junction in the middle of the United States.

In On the Road, Sal Paradise, Dean Moriarty and the gang make stops in Denver as they are traveling between New York and the west coast. The Denver portrayed in the novel is urban, ethnically diverse and alive with energy. The descriptions of Denver’s historic African American District, Five Points, are vivid and memorable.

In real life, Denver also played an important role in the development of the Beat Generation. Neal Cassady lived in Denver for many years and was responsible for brining Jack Kerouac and Allen Ginsberg to Colorado. They all spent time in Denver listening to jazz at places like the legendary El Chapultepec and at clubs in Five Points. For a great introduction to Denver’s role in the history of the Beat Generation visit Denver’s Beat Poetry Driving Tour written by beat historian Andrew Burnett (http://www.denvergov.org/aboutdenver/today_driving_beat.asp). Many figures from the Beat Movement had long standing connections in Metro Denver and Colorado including Allen Ginsberg who was affiliated with Naropa University in Boulder.

This is all very interesting but how does it apply to economic development which is the theme of this blog?

Richard Florida, an urban economic theorist, has written several well known books about the creative class and its growing importance in the contemporary knowledge-based economy. One of Florida’s ideas is that places that are open, diverse, and tolerant will be able to attract well-educated and creative workers who are the key input into knowledge-based businesses such as software, internet and biotechology companies, leading to sustained economic prosperity for those places. Florida argues that places with “Bohemian Culture,” large gay populations, ethnic diversity and other indictors of tolerance and opportunity will be home to tech industry clusters. Florida defines Bohemians, using U.S. Census Bureau data, as people with creative occupations such as authors, designers, actors and directors, musicians and composers, photographers, craft-makers, dancers and perfumers.

Figure III below, taken from Florida’s book, Cities and the Creative Class, shows the high concentration of Bohemians in Metro Denver. Notice the large dark circles on the three maps below representing Denver's large absolute number of Bohemians, high concentration ofBohemians per 1000 people and high score on the Bohemian index. It is interesting to note the spatial isolation of Denver from other Bohemian centers and to compare the maps in Figure III below with the road trip route in Figure II above. If you horizontally connect the largest dots on the maps below you get a route that is pretty similar to Kerouac's 1947 road trip.


Figure III: Bohemia and Economic Geography, from Florida’s Cities and Creative Class


Denver’s role in the history of the Beat Generation is solid evidence of the region’s long-standing ability to attract creative and talented people. However, Denver’s association with the Beat Generation is less widely known than that of cities like New York and San Francisco. The online Beat Generation Driving Tour should be further developed into an actual self guided tour with historic markers, descriptive plaques and related cultural events to promote and celebrate this side of Denver’s personality to local residents and visitors alike and to help attract even more creative people to the Denver Metro Area.