Saturday, November 26, 2011

Uncertainty Surrounding Former StorageTech Site Illustrates the Drawbacks of Relying on Out of Region Firms for Economic Development

The redevelopment of the former Storage Technology Site in Louisville into a training and R&D facility for ConocoPhillips was going to provide an economic boost to the "Renewable Range" cluster of green energy firms in the Denver region and to the broader economy.  

However, recent uncertainty over the future of the site illustrates the drawbacks of not having homegrown, in-region headquartered firms driving economic development decisions.  When Houston-based ConocoPhillips announced a split into two separate publicly traded companies, ConocoPhillips, an upstream exploration and production energy company and Phillips 66 a downstream consumer-facing refining, marketing and midstream business, the plans for the Louisville campus came into question.  Future decisions will be made by the leadership of Phillips 66 and may or may not reflect the previous vision espoused by the legacy ConocoPhillips leadership.   When land use decisions are made by companies with distant, out of state headquarters, there is an exposure to changes in strategic and leadership direction which can imp3de local progress.

Here is to hoping this site still gets redeveloped by Phillips 66 in a way  that enhances the regional green energy cluster and boosts the overall economy in the Metro Denver area.

Sunday, November 20, 2011

Denver "Cool City" for Young Adults During Recession....But Can The Area Retain This Talent?

William Frey from the Brookings Metropolitan Policy Program recently released demographic data showing that the Denver Metro Area had a net gain of more than ten thousand young adults (aged 25 to 34) from 2008 to 2010 making it the number one gaining Metro Area in the U.S. during the Great Recession.   It jumped from a ranking of twelfth in 2005 to 2007 (see chart to left from Brookings).

Frey describes the strong net inflow performance of cities like Denver in the following way:

"To the extent they are moving at all, young adults are headed to metro areas which are known to have a certain vibe—college towns, high-tech centers, and so-called 'cool cities.'...The top three areas [Denver was number 1] and our nation’s capital, arguably, fared relatively well economically during the recession. But all seven are places where young people can feel connected and have attachments to colleges or universities among highly educated residents."

Which brings me to a fascinating conversation I had the other night at dinner with an old friend I used to work with in New York.  My friend, who has lived in the Denver Metro Area for more than 10 years, has top notch professional and academic credentials with many interesting and impressive career experiences.   One thing he told me was that, in his experience, the relatively small size of the Metro Denver employment market leads many talented people to ultimately move on to larger business centers to further their careers.  

Clearly the Denver region is attracting energetic young people who are critical for keeping the area economically vital, creatively vibrant and providing a strong labor talent pool.  However, the big question this raises in my mind is "Can the region attract and/or organically grow enough top tier job opportunities to retain this population as it ages and grows into senior management roles?"

This is a big and critical challenge for the Denver region.