500 IBM Jobs for Boulder

In what is most certainly very happy holiday news for the regional Denver economy, IBM announced it is bringing 500 new customer-service-related jobs by 2014 to its Boulder campus. Given the prevalence of layoffs, outsourcing and overall downsizing in corporate America this is very good news and is a signal of IBM's ongoing commitment to its Boulder site location. IBM will receive a token contribution of $35,000 in tax rebates from the city of Boulder.

Denver in 1982: More Like Portland or Houston?

I came across this fascinating assessment of the Denver Metro Region from the New York Times in 1982. It is astounding how much progress Denver has made in the last quarter century and it's truly something to be thankful for. It is interesting to see that some of our problems from the 1980s persist today. I also think the concept of "self-critical boosterism," mentioned below still has a certain degree of accuracy in describing the Denver Region today and in some ways reflects this tone of this blog.

======================================================================

HURT BY SPRAWL, DENVER FIGHTS OFF HOUSTONITIS;
An Appraisal

April 26, 1982

BYLINE: By PAUL GOLDBERGER, Special to the New York Times

SECTION: Section A; Page 12, Column 1; National Desk
\
DATELINE: DENVER

Nothing seems to frighten civic-minded residents of Denver more than the suggestion that the explosive growth of their city in the last few years has made it resemble that other energy boom town, Houston. Indeed, one senses that the people of Denver would rather hear their city by the Rockies compared to Calcutta than to the Texas city that has come to symbolize not only growth but also chaotic sprawl, overtaxed services and choking traffic.

Far from increasing confidence in laissez-faire planning, the immense growth here seems to have decreased it, making this city more nervous and less assured about its future. The mood of Denver right now seems to be skeptical chauvinism, a self-critical boosterism.

Denver is halfway between Houston and Portland, Ore., and both exert a pull on it, Houston representing a tempting but disturbing prosperity, a city of unbridled growth where real estate developers control much of the city's destiny, and Portland looking like a model of restraint, a place characterized by the Northwest's traditions of limiting growth and preserving natural resources.

Change in Three Years

Three years ago downtown Denver consisted of not much more than a few undistinguished medium-size postwar high-rise buildings, an eccentric old tower modeled after the campanile of St. Mark's Church in Venice, and the 90-year-old Brown Palace Hotel.

Now, Denver's downtown is jammed with new office buildings. Where there was eight million square feet of office space as recently as 1979; there is now 20 million square feet, and 15 million square feet is under construction. The old skyline has virtually disappeared amid a plethora of new skyscrapers; perhaps even more significant, the landscape around the city has filled with new residential and commercial construction.

But downtown Denver remains a disappointing collection of mediocre skyscrapers, different from the Denver of three years ago only in quantity, not in quality. There is little to pull the place together. And, with the exception of two recent buildings with silvery metal skins similar to the sheathing of Citicorp Center in New York, there are no buildings that seem designed specifically for Denver. Most of downtown Denver could be anywhere, even Houston.

There are some encouraging signs, however. One of them is the discontent that so many of this city's business people, architects and civic leaders feel about the direction that downtown development has taken. Denver is still small enough to make it possible for decisions to be made by a single group of powerful people, and that is more or less the intention of the Denver Partnership, an activist group fighting for better urban design.

Created 16th Street Mall

The Denver Partnership was a major force behind the creation of the 16th Street Mall, a pedestrian mall designed by I.M. Pei & Partners that is nearing completion on one of the city's main downtown streets. The mall will be managed by the group under contract to the city. The organization has also acted as an advocate for more sophisticated downtown zoning laws, which have recently been adopted.

What neither this group nor Historic Denver Inc., the city's active preservationist organization, has thus far been able to do is get a substantial amount of housing built downtown. This is beginning to change under the guidance of Liebman Ellis Melting, a New York and Denver-based architectural firm, but it remains an area in which Denver lags badly. While the city is increasingly attracting young professionals who prefer city life, there is still virtually no housing available in the center.

Nudging Up the Mountains

In some ways, however, it is already too late for Denver to avoid all the problems of Houston. While sprawl is not so pervasive here, its effects are more dramatic, for in Denver there is an extraordinary landscape to be destroyed. Miles of small suburban houses cover nothing but flat land in Houston; in Denver, they nudge their way up mountainsides, fighting the beauty of the Rockies that is the city's real heritage.

Denver's current phase of growth can be said to have begun with the completion of the headquarters of Johns-Manville in 1978, a sleek metal building on a former ranch some miles out of town. When the company moved from New York to Denver, it brought 3,000 employees with it. Though these people work in an environment with views of a pristine mountain landscape, the views out of their office windows are increasingly the only untouched ones, for the coming of so many new households led to the development of miles of mountainside land with tract housing.

The problems here are truly regional ones, and population statistics show it. The population of the city of Denver remained relatively constant at 500,000 from the 1970 to the 1980 census, while that of the surrounding counties grew 31 percent, from 1.24 million to 1.62 million.

Much of the growth comes from an influx of young professionals for whom Denver, like Houston or Washington, D.C., has become a focus of migration. But virtually the only housing constructed in recent years downtown has been some flashy condominium towers, and there are few services for full-time living downtown.


The problems of downtown Denver and the region, then, are closely connected, for as Denver expands by covering up its mountains, it also weakens the downtown it is trying to promote. Every house built at the foot of the Rockies does double damage: It takes away a part of a virgin landscape, and it saps energy from the downtown it could have strengthened.

United Health Foundation Ranking of the Healthiest States: Colorado Ranked 8th

According to an annual ranking of the most and least healthy states by the United Health Foundation, as reported by Forbes, Colorado was ranked the 8th most healthy state. Mississippi was ranked the least healthy state.

See below for a summary excerpt on Colorado from the United Health Foundation website http://www.americashealthranking.org/ :

"Ranking: Colorado is 8th this year; it was 14th in 2008.

Strengths: Strengths include a low prevalence of obesity at 19.1 percent of the population, low levels of air pollution at 7.7 micrograms of fine particulate per cubic meter, few poor mental and physical health days per month at 3.0 days and 3.2 days in the previous 30 days, respectively, low rates of deaths from cancer and cardiovascular disease at 166.1 deaths and 235.1 deaths per 100,000 population, respectively, and a low rate of preventable hospitalizations with 53.7 discharges per 1,000 Medicare enrollees.

Challenges: Challenges include a high prevalence of binge drinking at 16.6 percent of the population, a high rate of uninsured population at 16.1 percent and high geographic disparity within the state at 15.8 percent.

Significant Changes: In the last year, public health funding increased from $74 to $88 per person. In the last year, the rate of deaths from cardiovascular disease declined from 247.0 to 235.1 deaths per 100,000 population. In the past five years, immunization coverage increased from 67.5 percent to 80.7 percent of children ages 19 to 35 months receiving complete immunizations. In the past ten years, the prevalence of smoking decreased from 22.8 percent to 17.6 percent of the population.

Health Disparities: In Colorado, smoking is more prevalent among non-Hispanic blacks at 25.2 percent than non-Hispanic whites at 16.5 percent. Mortality rates vary by race and ethnicity in Colorado, with 835.3 deaths per 100,000 population among blacks compared to whites, who experience 748.5 deaths per 100,000 population."

The above excerpt was from http://www.americashealthrankings.org/yearcompare/2008/2009/CO.aspx

Planning for ConocoPhillips Campus Moves Forward

The Daily Camera had a lengthy article by Alicia Wallace about ConocoPhillips recent submission of its development proposal to the City of Louisville for its training and research campus at the former Storage Technology campus off U.S. 36. Plans are moving forward to build out 1.6 million square feet of space by 2013.

Colorado Fourth Happiest U.S. State

According to a study based on data from the Gallup Organization's Well-Being Index, Colorado is the fourth happiest state in the U.S.

U-Haul Economics

One popular way to compare the relative economic conditions between pairs of U.S. cities in the continental U.S. at any given time is to see which direction a one way U-Haul truck rental is more expensive. U-Haul rates are highly demand sensitive so the more imbalanced one way traffic is between a pair of cities, the more the rates diverge. Presumably when more people are moving from A to B, than from B to A, B has a stronger economy than A, and it costs more to rent a truck from A to B than from B to A.

I plugged a few simple scenarios in the the U-Haul website looking for quotes to/from Denver and the following three cities for a 10' truck on departing on October 30 2009: Chicago, New York and San Francisco. The results were interesting and painted a relatively favorable picture of the Denver economy.

Den to Chi: $413
Chi to Den: $1438

Den to NYC: $1333
NYC to Den: $1582

Den to SF: $744
SF to Den: $1009

Obviously this is hardly a full sample across truck sizes, days of the week, seasons, or broader time periods but it does indicate that Denver appears to be doing relatively well economically particularly compared to the Windy City.

Sunny Day in the Renewable Range

A real nice piece of economic development news broke this morning in the Renewable Range.

The German company SMA Solar Technology AG, announced it will be opening a Denver manufacturing facility near Stapleton which is expected to employ 300 full time workers and hundreds more seasonally once it is fully staffed. SMA makes solar inverters--with a product lineup of Sunny Boy, Sunny Central and Sunny Island --that convert direct current generated by photovoltaic solar panels into the alternating current employed by the electric grid.

See here for SMA's press release announcing the decision.

Generating 300 manufacturing jobs within Denver city limits is a big deal, especially given the state of the U.S. economy and this announcement strengthens Colorado's claim to be an emerging green energy cluster. Each new green energy sector job win increases the probability of future wins due to the network effects of agglomeration.

The Post cites SMA's Chief Financial Officer about the reasons the company selected Metro Denver for the facility's location.

"[t]he [Denver] region's educated workforce; the site's proximity to
Interstate 70, rail and Denver International Airport; lower operating costs; and
the area's focus on renewable-energy research were behind the decision to locate
here."

According to The Post, the State of Colorado and City of Denver provided $3.6 million in economic development incentives to SMA.

In Germany, SMA is located north of Frankfurt along a high speed rail line. I am not too familiar with Germany, but I suspect the direct flights between Frankfurt and DIA really facilitated this decision.

DaVita Looking in CBD for HQ

After my recent post bemoaning the dearth of major companies with HQs in downtown Denver's CBD, it is exciting that DaVita is looking in LoDo for its new HQ location.

John Rebchook's Inside Real Estate News

This spring I blogged about the end of The Rocky. Recently, I have been really enjoying reading Inside Real Estate News, a blog by former Rocky business writer John Rebchook. Rebchook puts out a prodigious amount of valuable information and data about current events, economic and real estate trends and other subjects very relevant to economic development issues. It is great that John is still engaged in reporting the economic and real estate happenings in the Denver region and is sharing his knowledge, creativity and insights with us.

Denver Not Bidding for 2018 Winter Olympics

Neither Denver or any other U.S. city is going to be bidding for the 2018 Winter Olympics according to the Wall Street Journal.

The Lack of Corporate HQs in Denver?

With the decampment of Newmont Mining for the Denver Tech Center in late 2008 from the Wells Fargo Center in Denver's CBD and the prospect that Qwest might also abandon the central city when its lease on 1801 California Street expires in 2012, I have been pondering that perennial question about why Denver is a second or third tier headquarters city when it has a first tier labor force, airport, and lifestyle amenities?

Is it the region's spatial isolation (Denver is not in or a short drive/train ride away from any of the five major business centers in the U.S.: New York, Washington D.C., Chicago, Los Angeles or San Francisco/San Jose)?

Is the fact that the Denver/Colorado economic development authorities are not funded to deploy massive tax subsidies to attract high profile corporate headquarters?

Is it because the Denver Tech Center, Englewood, Greenwood Village, etc are such attractive locations that they drain energy from the Denver CBD?

Its probably some combination of all of the above plus other reasons I have not identified.

Whatever the reasons, there most certainly are negative economic and aesthetic repercussions for the city and the region. A lack of HQs likely reduces regional economic vibrancy and makes locally-based philanthropic activity more challenging. The lack of marque corporate headquarters has also contributed to a dearth of newly constructed high profile, signature office towers in Denver since the 1980s real estate bust. The most beautiful office towers tend to designed by and for specific corporate owners and not as speculative investments - think Lever House, the Seagram Building, the GM Building and the Chrysler Building in New York City to take a few examples.

The factors that influence headquarters siting decisions are a running theme in this blog which I plan to keep exploring in future posts.

(photo above from Wikepedia Entry on the Wells Fargo Center in Denver).

Keeping Frontier Jobs in Denver

Regional officials in Colorado are putting together an economic development incentive package for Republic Airways, new owner of Frontier Airlines, in an effort to keep jobs in the Denver Region.

A Union Station Milestone

Construction is ready to begin at Union Station after Labor Day. This is quite a milestone for the Denver Region.

Just in time....the Union Station project has a great new web site.

Vestas Follow Up

The Denver Post has a great article on the Vestas investments in Colorado.

Graphic from The Denver Post.

HB 09-1001 Quick Successes

Two of Colorado's recent successes in luring new corporate HQ to the Denver region - REpower and Davita have been at least partially ascribed to House Bill 09-1001 which was signed by Governor Ritter back on May 4, 2009.

(Photo in this blog entry is of Governor Ritter at signing ceremony on May 4, 2009 from Press Release at State of Colorado Web Site)

The bill created state income tax credits for businesses that locate in Colorado, allowing companies to apply to the nine member Colorado Economic Development Commission (CEDC) for a 3.8% credit based on payroll tax costs incurred from the newly created jobs. To be eligible, businesses must create at least 20 new jobs in urban areas or five new jobs in rural areas, and pay wages or salaries above the average in the county where they reside. The newly created jobs must be in place for at least one year before the credits get paid.

I find this new law intriguing for two reasons. First, because its been involved in the two notable successes listed above. Second, because compared to other states like New York, Colorado has traditionally been extremely parsimonious when it comes to providing tax credits and incentives to lure new businesses. This new law is a modest departure from the state's traditional economic development recipe which relies heavily on its highly educated work force, desirable quality of life, the presence of DIA, and a business friendly regulatory climate.

It will be intriguing to see if the law generates other success stories and if it leads to any retaliatory actions by competing states.

Good News...Bad News

First the good news. REpower USA the wholly-owned subsidiary of a German wind power manufacturing company headquartered in Hamburg announced it is moving its HQ to downtown Denver from Portland Oregon. This is another great example of the emerging Renewable Range in Colorado which holds the promise to generate long term economic growth for the Denver Region. Its hard to know exactly when sector concentration reaches critical mass to create a self reinforcing cluster but these types of announcements show that Colorado is really making progress. Denver's geography in the center of the U.S. and the direct flights from DIA to Munich and Frankfurt clearly played key roles in the decision to move the HQ to Denver.

From the REpower Press Release 08/14/09

Steve Dayney, CEO of RePower USA

"Since 2007, we have managed our US wind energy business from a Portland, OR
office located near our initial projects in California, Oregon and Washington.
Today we are seeing our business grow rapidly to other regions of the US....To
maintain REpower’s future competitiveness and meet our customers’ needs in the
growing US marketplace, it is crucial to be strategically located and close to
all our customers and projects. Denver – centrally located, with an excellent
national and international transportation infrastructure and supportive business
climate, provides those characteristics we believe will help us succeed in
meeting our US business goals"

Now the bad news. First Data has moved its HQ back to Atlanta.

And the Winner Is....

......Republic Airways...and hopefully the Denver region if they move their HQ to Colorado.

Either way keeping another competing airline at DIA is great for Colorado.

Could San Francisco's Folly Be Denver's Gain?

I love San Francisco and the Bay Area. Its an amazing region full of incredible people and extraordinary places and its where I lived for more than ten years. However, its also a place where the parochial interests of the few all too frequently trump the broad interests of the many. Case in point, the recent furor over the Fisher family's generous offer to build an art museum in the Presidio to house their world class collection of contemporary art and sculpture.

To make a long story short, it looks like its not going to happen and the city where the collection will be housed could be up for grabs.

Winning this collection would be a unique opportunity to pursue Mayor Hickenlooper's vision for making Denver a cultural hub for the west. Given the Denver Art Museum's recent expansion, the Museum of Contemporary Art's new building and the upcoming opening of the Clyfford Still Museum, Denver has made great progress. Capturing the Fisher Collection would be a cap stone.

However, winning the Fisher Collection will take grand strategy, superior salespersonship, dexterity and speed plus a healthy dose of luck. San Francisco is still not out of the running and many other cities are licking their collective chops. This is an opportunity the Denver Region's political and civic leadership should pursue vigorously.

Photo above of the proposed Museum in the Presidio in San Francisco which would have housed the Fisher Collection by WRNS Studio.

FasTracks Bringing National Attention to the Denver Story

FasTracks is bringing prestige and national media attention to Denver.

"This past week, Denver has been host to an annual gathering of the Congress for the New Urbanism, a nonprofit that promotes alternatives to sprawl. When it last held its conference in Denver a little more than a decade ago, few
people lived in the downtown core around the historic Union Station. Since then, Denver has embarked on a $4.7 billion expansion of its transit system, funded by a 0.4 percent sales tax increase approved by voters in 2004. The rogram,FasTracks, will add 122 miles of light rail, as well as new bus service, and is scheduled to be completed by 2017. The city is also overseeing a $1 billion redevelopment of Union Station.

Along the rail line, mixed-use communities have sprouted, such as Stapleton, a $5 billion development on the site of the former Stapleton International Airport, which closed in 1995. Shops and restaurants in downtown Denver are lively long after the workday has ended, and neighborhoods like Central Platte Valley, just northwest of downtown, are still being developed. “It’s been transformative,” said Tom Clark, executive vice president of the Metro Denver Economic Development Corporation. He anticipates 50 transit-oriented developments to be built around FasTracks over the next
decade."

Photos from Matthew Staver for The New York Times.

See full article, "New Rail Lines Spur Urban Revival," in The New York Times, June 13, 2009.

See my previous blog entry about a recent article in Slate which also mentions FasTracks.

Also see recent Denver Post article, "FasTracks Seen as Key to Denver's Repuation," from June 25, 2009, echoing this theme.

Daniel Gross in Slate on Renewable Energy in Denver

Slate recently posted an interesting article by business writer Daniel Gross on the Denver Region's success in attracting a renewable energy cluster (what I refer to as the "Renewable Range").

The basic thesis of this article is that Colorado's proximity to clean energy generation opportunities in the great plains make it a natural hub for renewable energy manufacturing, research and generation.

Money quotes.

"The Mile High City occupies the high ground when it comes to clean energy—and clean living. Denver's sheer outdoorsiness can be by turns charming and infuriating. (The question "What do you do?" is likely to be answered with an outdoor activity, not a profession.) When I showed up at Gov. Bill Ritter's office, an aide was carting a bicycle rack out of the inner sanctum. And while the state's jewel of a capital may be testimony to its heritage of extraction—walls of Colorado-mined rose onyx, a dome covered in gold, and Works Progress Administration-era frescoes paying tribute to coal mining—a new Colorado is dawning. In November 2004, Denver-area citizens voted to boost sales taxes to expand the region's light-rail system, and the state's voters approved a ballot initiative mandating that utilities draw a chunk of electricity from renewable sources. The quasi-independent republic of Boulder is a capital of
composting, recycling, hybrid-driving, and general eco-fabulousness....

The Great Plains are the Saudi Arabia of wind, and the turbines—a tower can be up to 300 feet high, and each of the three blades weighs up to 7 tons—are very expensive to transport. Colorado's proximity to markets, its highly educated work force, and tax breaks drew Vestas, the Danish turbine maker. The Danes opened their first U.S. manufacturing facility in Windsor, Colo., in 2008, and have three more in the works in the state. The tower factory under construction in Pueblo will be the largest in the world. "We will be processing 200,000 metric tons of steel per year," said Hans Jefpersen, general manager of Vestas Blades America. Total capital investment: $700 million. Suppliers are following: Hexcel, an advanced carbon materials supplier based in Stamford, Conn., is setting up a 100-employee facility in Windsor."

Brookings Tracks Recission and Recovery in U.S. Metro Areas: Denver in Top 40

The Metropolitan Policy Program at the Brookings Institute has a program called MetroMonitor which tracks the top 100 metro areas in the United States economic performance during the recession on a quarterly basis using metrics such as unemployment rate, wages, gross metropolitan product, housing prices and bank owned real estate. Denver ranks in the second strongest 20 Metro Areas (i.e. top 40 out of 100). See here for the full report.

Source of Photo: The Brookings Institute

Western Governors' Association Report on Renewable Energy Sites

The Western Governors' Association and the U.S. Department of Energy recently released a joint report describing prime locations where renewable energy could be generated in the Western U.S. including four places in Colorado. Three of the Colorado locations, located in the Eastern Plains are suited for wind energy generation and a fourth location in South Central Colorado is a potential home to solar energy generation.

Tax Incentives Played Role in DaVita Location Decision

In addition to factors previously cited in DaVita's decision to move to metro Denver, The Denver Post discusses the role of state tax incentives:

Money Quote:

"A new state law was critical in the decision by the country's largest
kidney-dialysis provider to move its corporate headquarters to
Colorado...Incentives in a new law that takes effect in August "were relevant
and necessary," DaVita chief executive Kent Thiry said Wednesday at a news
conference...Thiry called the incentives the "necessary lubricant" to assist the
company with the time and financial commitments of relocation...How much
incentive money flows to DaVita "is yet to come," said Don Elliman, director of
the Colorado Office of Economic Development and International Trade.
Elliman said the law gives a state income-tax credit of 3.8 percent for up to
five years to companies if they select Colorado over competitors and create at
least 20 jobs."

Moodys Assessment of Metro Denver Commercial Real Estate Health Indicates Weakness

The rating firm Moodys does a periodic report intended to measure the health of commercial real estate markets in the U.S. by metro area as part of their assessment of commercial mortgage backed securities (CMBS).

Denver's commercial real estate sector has generally been perceived in the media to be healthier than many markets across the country but the data in this report suggests this assessment should be reconsidered. Overall, Denver has a low yellow score which indicates substantial weakness. Denver is ranked 41st out of 60 major metro markets in terms of commercial real estate health. For those people employed in the Front Range's construction sector and local real estate development buffs such as myself these scores are, not surprisingly, a cause for concern.

Of course any metro wide measurement of real estate market health can mask conditions in localized sub-markets and individual sectors which should be specifically analyzed when considering any given project proposal.

First a bit about the study's methodology and then details on the Denver Region's scores. According to Moody's:

"The scores are derived using supply and demand forecasts, as well as current
market conditions and momentum. The report is based on data from
the fourth quarter of 2008"

Each real estate sector (Multifamily, Industrial, Office: Central Business District, Office: Suburban, Retail, Hotel: Full Service, and Hotel: Limited Service) is given a ranking between 0 and 100, 0 being the lowest, least healthy score.

RED=Less than 33 (Unhealthy)

YELLOW=34-66

GREEN=67 or more (Healthy)

Now the Metro Denver Results Based on Fourth Quarter 2008 Data

Clearly Moody's believes the hotel and suburban office property sectors are extremely unhealthy in Metro Denver today and unlikely to experience additional new development in the short to medium term. Even the CBD office market, which is in better supply demand balance than it was in the eighties and nineties is currently in a low yellow status. The multifamily sector is the single source of strength in Metro Denver's commercial property markets.

No one study or report should be taken as the final word in assessing something as complex and fluid as a region's commercial real estate market health but people with rosy short term assessments of the Denver property markets would be well advised to consider these results as they make short term decisions and long term plans

Full Report Name: CMBS: Red - Yellow- Green Update, First Quarter 2009 Quarterly Assessment of U.S. Property Markets, April 21, 2009.

Denver 18th Ranked North American High-Tech Metro Area

See interactive data from new Milken Institute Report North America’s High-Tech Economy: The Geography of Knowledge-Based Industries. Click here for Denver specific data.

A New Fortune 500 for Metro Denver

Like many Colorado loyalists, I am suffering a bit of nasty hangover from the last two games of the Nuggets-Lakers Western Conference Finals. However, it is really exciting to see that Metro Denver is gaining a new Fortune 500 headquarters. Davita Inc. is a nice fit for the region's bio sciences cluster. It will be interesting to see where they chose to locate (CBD, Tech Center, Fitzsimmons, other?).

Key Excerpts from the DaVita Press Release Announcing the Move

"The decision to select the Denver area for DaVita's corporate headquarters
was based on four critical factors:

1. The city's geographic location is ideal for a nationwide company with facilities and operations spread across nearly every state in the country;

2. The relative costs in the area are less expensive for families and companies alike;

3. Denver is widely considered to be a highly desirable place to live and work; and

4. DaVita's significant existing presence in the region provides a solid foundation upon
which the company can continue to grow.

The company expects to see millions of dollars in savings over time as a result of the change."DaVita's decision to move its headquarters is a great coup for metro Denver and the state of Colorado," said Denver Mayor John Hickenlooper. "DaVita is one of the biggest and the best in its industry. The company's decision reaffirms what we know is true about our community - that Denver is one of the best places in the nation to work and play. We are proud DaVita chose to call Colorado home."
"While Colorado families and businesses continue to struggle, we are clearly seeing
encouraging signs of economic activity - and DaVita's decision to move its
headquarters to Colorado tops the list," said Governor Bill Ritter. "Colorado's
business-friendly climate and my administration's strategy to create new jobs,
help businesses survive the downturn, and develop a highly skilled 21st century
labor pool are positioning Colorado for a strong and sustainable recovery. On
behalf of people throughout the state, we heartily welcome DaVita's Colorado
expansion and we congratulate Mayor Hickenlooper and all those who helped make
these new jobs a reality."

Bringing Back a Major Bike Race to Colorado is a Great Idea

I love this idea from Lance Armstrong. This is a great way to strengthen global perceptions of the Colorado brand. Good luck Lance.

In this Coors Classic photo from left to right are Davis Phinney, Thomas Prehn, Bernard Hinault, Jacques Boyer and Greg LeMond.

Photo from http://stevetilford.com/2009/03/10/coors-classic-photo-raleigh-ad-1980s/

Green Sprouts in a Cold Environment

The current recession and the resulting fall in energy prices have slowed the development of the Renewable Range's green energy economy. Despite the fact that the economy (and weather) is really cold today, Spring is coming and there are a few green sprouts appearing.

A View of the Rockies is strictly non-partisan but we support Governor Ritter's green energy policies. Click here to sign an online petition to show your support for the Governor's New Energy Agenda for 2009.

Photograph of Danish Crown Prince Frederik, second from left, Crown Princess Mary tossing shovel of dirt at Vestas' factory groundbreaking near Brighton. Colorado Governor Bill Ritter is at the right and Vestas' president, Ole Borup Jakobsen, on the left.

Photograph from Denver Post Web Site, Copyright David Zalubowski, The Associated Press.

Metro Denver Sports Commission

There was an interesting article in today's Denver Post about the Metro Denver Sports Commission, its President KieAnn Brownell, the Sportaccord event, and the possibility of Denver hosting the 2022 Winter Olympics. I think the MDSC's sponsorship of the 2008 Men's College Ice Hockey Frozen Four Championship brought a really great event to Denver last year.

Money Quote:

"When she was 9 years old, KieAnn Brownell would check movies out of the
library and charge friends admission to watch. Now the self-described "serial
entrepreneur" sells Denver as a potential host for national and international
sports events, including the Winter Olympics.

As president of the Metro Denver Sports Commission, Brownell is the
city's chief host this week as hundreds of Olympic sports power brokers gather
for "Sportaccord" meetings at the Hyatt Regency Denver. Delegates include the
executive board of the International Olympic Committee.

"If there's a message we can get out, it's 'Bring your world-class
events here, we're ready for them,' " Brownell said Monday while working a lobby
swarming with delegates from around the world."

Brookings: "Miracle Mets"

The Brookings Institute Metropolitan Policy Program recently published another interesting report titled "Miracle Mets: Our Fifty States Matter A Lot Less Than Our Top 100 Metro Areas," by Katz, Mauro and Bradely.

Click here for link to full paper in PDF format. This article originally appeared in the Spring 2009 issue of Democracy: A Journal of Ideas.

For a metro area in the United States, where we generally lack effective metro-wide government structures, I have always thought Metro Denver did a pretty decent job of regional coordination with important regional bodies, such as the following, impacting metro-wide policy: Metro Mayors Caucus , Denver Regional Transportation District (RTD), Denver Regional Council of Governments (DRCOG), the Scientific and Cultural Facilities District (SCFD), the Denver Metro Chamber of Commerce, The Metro Denver Economic Development Corporation, the Metro Denver Sports Commission, and many others.

Its notable how often the terms "metro" or "region" are used in the titles of the organizations listed above which shows that the region recognizes and values the importance of metro-wide organization and cooperation. As an aside, I think this ethos evolved in part because of the Denver region's spatial isolation from other metropolitan areas which fostered the need for regional bootstrapping and self reliance.

In this context I thought it was interesting that the Brookings' paper cited FasTracks in Denver as an example of successful regional coordination.

"Of course, metropolitan-area leaders have no alternative but to try to
succeed, and many are working creatively and energetically to tackle big
problems and augment their regions’ stocks of crucial assets. In Denver, the
metropolitan mayors’ caucus spearheaded a $5 billion bond issue for transit
and changed local zoning laws to create the density that makes transit
successful."

Lets hope the region is able to pull together once again to develop a strategy and the political consensus for financing the full FasTracks build out by 2017 as planned.

Regionalism in Denver is something I hope to explore further in future blog posts.

See below for an extended summary of the paper from the Brookings Website :

"Though our economic development policies don’t reflect it, America doesn’t
really possess a national economy, or even a collection of 50 state economies.
Instead, America’s long-term prosperity stands or falls on the more local
prosperity of its 363 distinct, varied, clustered, and interlinked metropolitan
economies, dominated by the 100 largest metros—many of which cross county and
state jurisdictions and incorporate multiple city centers, suburbs, exurbs, and
downtowns in a way that the old hub-and-spoke model of urban geography never
did. In that sense, America is quite literally a “MetroNation,” utterly
dependent on the success of its metropolitan hubs.

From the hundreds of square miles that constitute contemporary London to
the sprawling Brazilian city-states of Sao Paulo and Rio, metros are the new
norm in global economic development, shaped by twenty-first-century forces of
globalization, innovation, and cultural diversity. These forces assign enormous
value to a relatively small number of factors—infrastructure networks,
industrial innovation, human capital, the quality of place—and then reward those
nations and places that are best able to marshal and align those assets. And
those places are, increasingly, metros—pulsating zones of urban, suburban, and
exurban synergies and exchange that revolve around cities. Metros—and not only
their constituent individual cities, suburbs, or isolated municipalities—are
therefore one of the most critical places where federal policymakers should
focus their attention and resources as they seek to restore prosperity to our
nation.

Yet here is the problem: While America is more metropolitan than ever, the
nation’s policies and structures rarely match economic reality. As a nation, we
remain fixed in old arrangements, established decades ago and kept in place by
bureaucratic inertia and entrenched political interests. Such a misunderstanding
of contemporary urban structures inevitably leads to bad public policy
decisions. Take as an example the nation’s crumbling infrastructure, now finally
in the public eye. We should be spending money on metropolitan infrastructure,
such as new transit lines or the maintenance and upgrade of existing roads and
bridges, because it gives the best return on investment, the most bang for the
buck. And yet the federal government sends the overwhelming bulk of national
infrastructure funds to states, not metros. Given the vagaries of state
politics, state departments of transportation in turn tend to scant metro
investments in favor of building brand-new roads in far-flung places. Money that
could be fueling the metro economic engine ends up widening a rural highway.

We can no longer afford this mismatch. As the nation gathers its energies
to emerge from the current rattling recession, President Barack Obama and
Congress need to re-imagine the relationships between the federal government,
states, and localities to more fully realize the potential of metropolitan
America. Washington must lead in areas that transcend the reach of local action
and require national vision, direction, and purpose—areas such as the provision
of world class interstate road and rail links, investments in science and basic
research, immigration reform, and the creation of a framework for controlling
greenhouse gas emissions. At the same time, Washington needs to get past its
focus on states and empower metro areas—often made up of dozens of independent
governments— to work closer together and begin asserting themselves as coherent,
if widespread, entities. And finally, Washington and all levels of government
need to maximize their performance by deploying information, standards-setting,
and data to improve decision-making and problem-solving.

America can no longer pretend that it is a single economy, nor can it
imagine that it is a nation of independent, small towns, punctuated by large but
isolated urban centers. It must embrace its metropolitan future—and all the
wrenching change that entails."

What the Loss of the Rocky Means to Me

Like many people with ties to Colorado and the Metro Denver Area, over the last week or so I have been thinking about what the demise of The Rocky Mountain News means.

Clearly the elimination of jobs and economic activity is very painful particularly given the overall state of the economy. The broad civic loss of an independent and vigorous source of regional news will be felt immediately and for coming decades. The break in 150 years of historical continuity is like a sharp knife to Denver's soul.

As a blogger living in the New York City area but writing about economic development in Denver, The Rocky provided a tremendous news source for me, sparking and informing many of my blog posts (best wishes in future endeavors Rebchook, Milstead, Reuteman and team). Ironically the very same Internet which made my blogging possible, led to structural economic changes which are contributing to the loss of so many newspapers, including The Rocky, around the country.

One of the things which makes the City of Denver and the surrounding area so special is its status as a regional metropole -- a political, cultural, economic and financial capital for the intermountain western United States. The newspapers' very name - "The Rocky Mountain News" was emblematic of Denver's claim to regional supremacy.

The Rocky's presence along with The Denver Post brought prestige to Denver making it, by my reckoning, the smallest of the remaining two newspaper towns in America. For many decades the two papers fought a legendary news war providing competing perspectives, promotional prices, spurring each other on to journalistic achievements, and helping to inform and entertain the citizenry. When a truce was called in 2001 and the two papers signed a joint operating agreement and combined their business operations, they still maintained separate newsrooms and editorial views.

Denver, the United States and most places around the world are going through a very serve economic downturn which is destroying well-loved institutions and traditions, dislocating millions of people and enveloping many facets of peoples lives with painful uncertainty. However, with this type of crisis comes changes and the seeds of new opportunity. Its hard to know exactly how and when that opportunity will unfold but I am hopeful that the Denver Region is well positioned to embrace the changes and ultimately thrive in the new reality -- its just a darn shame that The Rocky won't be around to keep us informed along the way.

Hexcel Ground Breaking

From The Denver Post:

"Economic incentives and Colorado's mountain vistas held no sway in persuading Hexcel Corp. to build a new manufacturing plant in Windsor.

'We are here because our biggest customer, Vestas, is here,' David Berges, chief executive and chairman of the Stamford, Conn., company told a crowd gathered Thursday at the Great Western Industrial Park, where the company held a ceremonial groundbreaking for a new 100,000-square-foot facility."

From Hexcel Press Release

"Hexcel announced on December 10th 2008 that Windsor, Colorado would be the location for their new prepreg manufacturing plant to serve the North American wind energy industry. Since then, great progress has been made with the construction of the new facility. Foundations have already been laid for the 100,000 square foot building, and exterior concrete walls were erected earlier this month. Hexcel expects production to begin at the new plant in the second half of 2009.

Hexcel selected Windsor as the location for the plant due to the close proximity of Vestas Wind Systems, who will be a major customer for prepregs manufactured at the facility. Hexcel and Vestas pioneered the use of prepreg in wind turbine blades over a decade ago and the strong, lightweight materials have been a major contributor in the growth of blades to today’s epic proportions."

Link to earlier blog post on the Hexcel announcement

Link to Recent Union Station Design Presentation

If you are like me and eagerly following the progress of the Union Station redevelopment project you will be very interested to see a recently released "Design Presentation"which provides new details on the transit infrastructure, architecture and public spaces being planned for Union Station.

Image from Scott L. Robertson, www.slrobertson.com

Richard Florida: How the Crash Will Reshape America

The Atlantic Cover story by Richard Florida: "How the Crash Will Reshape America" is full of the authors' fascinating insights about economic geography and regional development patterns in the context of the current economic and financial crisis.

“No place in the United States is likely to escape a long and deep recession. Nonetheless, as the crisis continues to spread outward from New York, through industrial centers like Detroit, and into the Sun Belt, it will undoubtedly settle much more heavily on some places than on others. Some cities and regions will eventually spring back stronger than before. Others may never come back at all. As the crisis deepens, it will permanently and profoundly alter the country’s economic landscape. I believe it marks the end of a chapter in American economic history, and indeed, the end of a whole way of life.”

Florida does not deal specifically with the Denver Region in the text of the story, instead focusing more attention on places like New York, the Rust Belt and California, but many of his insights are very relevant for the Front Range.

"In fact, as I described in an earlier article for this magazine (“The World Is Spiky,” October 2005 [link opens PDF]), place still matters in the modern economy—and the competitive advantage of the world’s most successful city-regions seems to be growing, not shrinking. To understand how the current crisis is likely to affect different places in the United States, it’s important to understand the forces that have been slowly remaking our economic landscape for a generation or more....

The ability of different cities and regions to attract highly educated people—or human capital—has diverged, according to research by the Harvard economists Edward Glaeser and Christopher Berry, among others. Thirty years ago, educational attainment was spread relatively uniformly throughout the country, but that’s no longer the case. Cities like Seattle, San Francisco, Austin, Raleigh, and Boston now have two or three times the concentration of college graduates of Akron or Buffalo. Among people with postgraduate degrees, the disparities are wider still. The geographic sorting of people by ability and educational attainment, on this scale, is unprecedented. "

The interactive maps showing different aspects of economic geography such as patent production, income and population are fascinating and worth exploring. They help reinforce two of the Denver Region's two key characteristics: its spatial isolation and economic vitality. Its particularly striking to see how potent, the Front Range's two college towns, Boulder and Fort Collins have been as patent generators. This clearly bodes well for the region's future economic health.

Pew Research Cites Denver as "Favorite City"

Pew Research recently released a national survey which named Denver as the most popular big city in the country. Click here for summary and here for full report.

According to Pew:

"A new national survey by the Pew Research Center's Social & Demographic Trends project finds that nearly half (46%) of the public would rather live in a different type of community from the one they're living in now -- a sentiment that is most prevalent among city dwellers. When asked about specific metropolitan areas where they would like to live, respondents rank Denver, San Diego and Seattle at the top of a list of 30 cities, and Detroit, Cleveland and Cincinnati at the bottom.....These findings emerge from a wide-ranging telephone survey of a nationally representative sample of 2,260 adults, conducted Oct. 3-19, 2008."

I wonder how much Denver's results were influenced by the 2008 Democratic Convention which happened just a few months earlier. Being named the number one favorite city is a positive indicator of the Denver area's ability to attract top labor market talent and employers. It will be interesting to see how Denver fares in follow up surveys in subsequent years.

The New York Times on the Denver Real Estate Market

This New York Times story about the Denver real estate market and regional economy is a few weeks old, from January 6, 2009, but interesting nonetheless. The money quote:

"A number of elements are cited as keeping this region afloat as other areas
founder: investments in public transportation, aggressive economic development
and, most significant, a two-decade campaign to diversify the region’s economic
base from oil and gas to alternative energy, aerospace, technology and
telecommunications. As a result, said Scott Anderson, a Wells
Fargo economist who also spoke to the assembly, Denver and its region are
“in for a more mild recession” than the rest of the country."

Windsor Wind Cluster

More details about the agglomeration effects in Windsor due to the Vestas location decision.

From the Rocky Mountain News

"When Vestas announced two years ago that it would build giant wind turbine blades in Windsor, economic development officials predicted that other companies would follow.That is essentially what has happened with the arrival of Hexcel Corp., said Martin Shields, a regional economist at Colorado State University. Hexcel makes a high-performance material used in the manufacture of wind turbine blades. The Stamford Conn.-based company is investing $50 million in a new manufacturing facility about 1,000 feet from the Vestas wind plant. Hexcel will initially create about 100 jobs, and is joining Vestas as a tenant in the Great Western Industrial Park."

Is Colorado a Renewable Energy Hub?

One of the overriding themes of this blog has been the importance to Colorado and the Denver Region's economic health of seizing the moment and becoming a center for the emerging renewable energy sectors. Up until now I have not seen any data which allows us to measure the region's progress in this regard.

The recently released report by the American Solar Energy Society, "Defining, Estimating, and Forecasting The Renewable Energy and Energy Efficiency Industries in the U.S. and Colorado," provides useful data
for understanding if Colorado is succeeding in becoming a green energy hub. According to this report as of 2007 Colorado had 91,285 renewable energy and energy efficiency jobs (10,075 in just renewable energy). In the U.S. as a whole there were 504,000 renewable energy jobs and 9.09 million total renewable and efficiency jobs.

By combining this data on renewable jobs in Colorado and the U.S. with overall data on Colorado and U.S. employment as of December 2007 (138 million and 2.3 millon non-farm jobs in the U.S. and Colorado respectively) its possible to calculate a location quotient(LQ) which shows the concentration of renewable jobs in Colorado.

One way to think about the LQ is it measures the ratio of a state's share of total national jobs in a specific industry to that state's share of total national jobs. So a LQ>1 indicates the state has a greater share of jobs in a specific economic sector than its population would otherwise warrant which means the state is a net "exporter" of the products and services produced by that sector to the rest of the nation (or world). Detroit has a high LQ in automobile manufacturing (at least for now), California has a high LQ for film production, New York in financial services, etc. So a LQ>1 means an area could be a hub or cluster for a given economic sector. Obviously having a high LQ in a growing sector is a good thing for a region's economic health but having a high LQ in a shrinking sector can be disastrous.

Based on the data cited above, Colorado had a LQ of 1.18 in renewable energy jobs in 2007. Given the string of positive job announcements in early 2008 in Colorado in the renewable sector, it seems likely to me that this ratio may have grown in 2008. However, a LQ of 1.18 only indicates a moderate level of concentration and it means Colorado has a long way to go before establishing itself as a primary alternative energy hub and there is likely to be fierce competition from other areas of the country to obtain this status.

(Photos courtesy of the National Renewable Energy Laboratory, All Rights Reserved)

Schwab Jobs

The long awaited expansion of Charles Schwab's presence in Colorado was formally announced on Friday. As reported in the Denver Post, the brokerage company is adding 500 IT jobs in Douglas County and is receiving a reported $1 million incentive from the state to facilitate this expansion. Given the severe economic contraction impacting the U.S. and the Denver region, this is welcome news indeed.

It Must Be Boulder

If the nine companies to watch in 2009 include alternative energy, organic products, computer hardware and software and colorful, rubber footwear companies--it must be the county where I was born - Boulder (and Broomfield). The Daily Camera had an interesting article in its business section titled "Nine to Watch in 09" about the likely comings and goings at key local employers.

The nine companies profiled included: ConocoPhillips, Crocs Inc., DigitalGlobe Inc., Level 3 Communications Inc., Pangea Organics, Rally Software, Range Fuels Inc., Siemens Energy, and Sun Microsystems Inc.

For me the most interesting tidbit was that Siemens Energy is putting its wind turbine research center in Boulder - obviously a great boost to the local alternative energy cluster and an announcement I had missed this past summer.

"Siemens Energy in June announced plans to establish a couple-thousand-square-foot facility where employees will focus on atmospheric science research, aerodynamic blade design, structural dynamics and wind turbine dispatch prediction and reliability. The company since has started settling into a 5,300-square-foot space in downtown Boulder, at 1050 Walnut St.

Siemens expects to employ about 60 people here eventually, and officials from the local municipal and scientific communities say the arrival could further boost Boulder County's position in the growing renewable energy industry. In the coming months, locals could get a taste of what Siemens' presence means, both in terms of new jobs, but also potentially new partnerships with area labs."