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.