Sunday, August 16, 2009

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.

Saturday, August 15, 2009

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.

Thursday, August 13, 2009

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.