One Year Anniversery of A View of the Rockies

Today is the one year anniversary of A View of the Rockies' first post. I want to thank the many people who have read, commented on and emailed me about the blog.

Its been an exciting year for economic development in the Denver Region with some of the many highlights including: progress made on FasTracks and Union Station, continuing infill development in downtown Denver, accelerating growth in the renewable energy cluster in Colorado, job growth in other key sectors such as financial services, increasing flights and passengers at DIA, and the continuing preparations for the 2008 Democratic National Convention in Denver.

Here's to hoping the second year of this blog's existence will be even more exciting than the first.

Denver's Five Points District : A Regional Jewel

Over the past year, I have spent several very interesting days in Denver's Five Points neighborhood learning about the district’s African American history and culture. The galleries and exhibits in the Blair Caldwell African American Research Library (see photo to the left) were informative and engaging. The staff at the Black American West Museum, especially Executive Director La Wanna Larson, are both highly knowledgeable and welcoming. I also enjoy the blend of excellent Southern and Caribbean food and casual hospitality at the Welton Street Cafe.

Denver’s Five Points neighborhood has a wealth of African American social, cultural, and historical resources which are unparalleled in the Rocky Mountain Region and represent one of the most important historically African American centers in between Chicago and the West Coast. (Photograph below is the former home of Dr. Justina Ford, the first African American Female Doctor in Colorado and current home of the Black American West Museum).

A few of the many additional community-based resources include, the Stiles African American Heritage Center, Cleo Parker Robinson Dance, the African American Leadership Institute, the Brother Jeff Cultural Center, the James P. Beckworth Mountain Club, and many others.

The history and contributions of the African American Community in Five Points to Denver are emblematic of one of the key themes of this blog: that the City of Denver and its wider Region serve as the Metropole of the Mountain West with a unique and diverse history. A key to promoting economic development in Denver is to build on and promote the unique character and history of the regions' neighborhoods and cities. (Photograph to the left is the Rossonian Building in Five Points with a view of the light rail tracks and Downtown Denver in the background).

With its dedicated residents and businesses, quick light rail connection to downtown, pedestrian oriented commercial strip on Welton Street, sense of history and community and mix of historic buildings and infill redevelopment, the neighborhood is poised for change and growth.

Back in 2002 the City of Denver wisely recognized the historical significance of the neighborhood by creating the Welton Street Cultural/Historical District. The neighborhood's history is physically represented by historical markers, the Deep Rock Building's Neighborhood History Photographs, the Blair Caldwell Library, public art and historical information located at the light rail stops, Dr. Justina Ford's relocated Victorian house, now serving as the Black American West Museum and in many other ways.

However, Five Point's sense of history and place could be strengthened by the use of additional public art work and signage to increase the sense of arrival into the district at key locations in the neighborhood including near the Blair Caldwell Library at the entrance to the neighborhood from Downtown Denver. Additionally, signage and public maps showing key sites and places of interest would improve wayfinding and visitor accessibility to neighborhood. (Photograph to the right is Deep Rock Water Building on Welton Street Displaying Large Format Five Points Neighborhood Historical Photos).

This is one of my favorite neighborhoods in Denver and I encourage everyone who has the opportunity, to spend some time there.

The DNC Host Committee's Fundraising Struggles are Nerve-Wracking

Scaled back welcoming events and postponed media planning tours due to fund raising difficulties are making me nervous that the Denver Region could look ill-prepared in front of the national media if the local DNC Host Committee fails to meet its fund raising obligations. For earlier blogs on the the convention see here and here.

To contribute, go to the Denver 2008 Planning Committee's web site.

Correction to "A Family Connection to Lower Downtown Denver "

Apologies for the long absence since my last post. During this period I took several trips, including a visit to Denver where I gathered some additional information about my family's connection to Lower Downtown. I want to supplement and correct a blog post from October 2007 about my maternal Grandfather, Fred Hosken, and Uncle, Edward Hosken's business, the Refrigeration Services Company (RSC).

After the Hosken's purchased RSC, it was located near 15th and Blake Streets in LoDo during a roughly ten year period in the 1940s and 1950s. In my previous blog, I identified the current address of the site where RSC was located as 1517-1521 Blake Street which is today occupied by Wahoos Restaurant. The actual address of the former RSC site is 1507-1509 Blake Street where FedEx Kinko's is located - one storefront south of Wahoos.

See Photos from 1950s of RSC and Today of FedEx Kinko's. on Blake Street in Downtown Denver.

Notice the clear similarities between the storefronts in the two photographs, the size, shape and spacing of the two doors, the display windows and the six second story windows. Also notice the similarities in the size, shape and placement of the door and second story window on the building to the right in both photographs (today Wahoos). This is clearly the same building in both photos.

One of the things which confused me during my previous post was the fact that today there is not a building to the left of FedEx Kinko's, there is a surface parking lot but in the photo above of RSC there is a building. Clearly the building was torn down sometime after the RSC photo was taken. The demolition of the building to the south of RSC, on the corner of 15th and Blake Street probably explains why the addresses on this block have been slightly re-numbered.

Vestas Plans to Build Wind Turbine Tower Factory in Colorado

In another positive development for the Renewable Range, Vestas, the Danish wind turbine manufacturer, announced in its first quarter 2008 financial report that it has "resolved to build the world's largest [wind turbine] tower factory in Colorado..." which will complement its existing wind turbine manufacturing facility in Windsor, Colorado.

The "Ascent to Asia" Campaign

The Rocky Mountain News has an interesting article today about the "Ascent to Asia" marketing campaign launched recently to promote the establishment of a non-stop flight between Denver and Tokyo. A coalition of Denver officials and regional boosters are working to generate momentum for establishing a trans-pacific flight. As a marketing professional, I have to say the campaign slogan is catchy and the poster designed to promote the effort is quite beautiful. This is a critical undertaking for the economic competitiveness of the Denver metropolitan region and I applaud these outstanding efforts.

Previously I blogged about the new United flight from Denver to London in November 2007 and about Denver's relatively lower international air traffic in two parts on September 23, 2007 and September 5, 2007.

Poster image from www.rockymountainnews.com, photo by City of Denver; Business Groups.

Progress on Office/Mixed Use Developments a Great Sign for Downtown Economy

In the DenverInfill Blog, I noticed progress has been made recently on two new downtown mixed use developments with substantial office components : Two Tabor Center and 999 17th Street. Having just filed its building permit, the long awaited second tower at the Tabor Center is much further along in the development cycle than 999 17th Street which is in the preliminary design stage.

However, progress on both these two projects is a positive sign for the downtown Denver economy. Although I do not have any direct or inside knowledge of the situation, I believe both projects' office components are at least partially speculative, meaning they do not have 100% pre-lease commitments for the space. The types of businesses likely to occupy this type of "Class A or higher" CBD office space include companies in the FIRE sectors (financial services, insurance, real estate), professional services firms and corporate or regional headquarters operations. The willingness and ability of Callahan Capital Partners and Shea Properties to move these projects forward in the face of macroeconomic and capital market headwinds, is compelling evidence that Denver's CBD is well poised to grow its base of high paying jobs and attract new businesses.

This continued progress at the likely start of a U.S. economic recession is particularly notable compared to the office space downturn that hammered Denver in the great 1980s construction boom and bust. It is evidence that the current regional economy is more diversified and resilient than it was in the eighties and that the office sector has not been overbuilt during the current construction boom.

The fact that both Two Tabor and 999 17th Street are mixed use projects is notable. With office, hotel, retail, parking and residential condo components, 999 17th street will be a highly diversified real estate development. Economic weakness in any one use category can be offset by strengths in the others. In fact, this development, with its widely mixed uses is emblematic of the broader changes in land use in downtown Denver over the past 25 years and helps explain why the core is so much stronger today than it was in the 1980s.

Branding Colorado's Green Energy Cluster

This year has seen a wave of positive developments for the green energy sector in Colorado, from the ConocoPhillips purchase of the former Storage Technology site to to the massive $130 million venture capital funding of Broomfield-based biofuel company Range Fuels.

The time is now ripe for regional boosters, civic organizations and clean energy trade groups in Colorado to come up with a memorable nickname for the alternative energy cluster in the region to help brand this sector's presence in Colorado in the same way that "Silicon Valley" represents the technology sector in the San Jose/San Francisco corridor. Giving the sector a concrete, memorable identity will help plant the idea in the public consciousness that Colorado is the place to be for green entrepreneurs, investors and workers, and serve as a rallying cry to help recruit employers and complementary economic entities to the area. This branding action will serve as a preemptive strike against other metro areas who are fiercely competing for similar jobs and investments. Once the nickname is established, a focused public relations and advertising campaign should be used to create brand awareness.

A short, simple, catchy, relevant, two to three word nickname is required. To get the ball rolling here are some suggested components for the name.

Possible alternatives for the first part of the phrase:

• green
  
• renewable
  
• alternative
• clean
• sustainable
  

Possible alternatives for the second part of the phrase:

• prairie
  
• plains
  
• foothills
  
• mountains
• range
• slope
  

The alternative that sounds best to me is "The Renewable Range." I like the meaning, the catchiness of the "double r" alliteration and the implied geographical references to "the Front Range," the well known term for the most populous part of Colorado on the eastern slope of the Rocky Mountains.

I am wondering what others think? Please send your suggestions and comments.

Denver and the REIT Sector

On Thursday April 3, I attended the New York University 2008 Annual REIT Symposium. One of the featured speakers was Jeffrey Schwartz the Chairman and CEO of Denver-based Real Estate Investment Trust (REIT) ProLogis. ProLogis develops and manages one of the largest global portfolios of distribution facilities. The company has operations all over the planet many of which are located in key port cities and help facilitate international trade flows. ProLogis is investing heavily in China. See here for a definition of REIT.

One of the key takeaways from Mr. Schwartz's presentation was that international trade is consistently growing three times faster than global GDP, providing a tremendous opportunity for companies like ProLogis who participate in the process. As I was thinking about the fact that Prologis is headquartered in Denver, I found it really interesting that Denver, a landlocked city without a major water port, which is geographically removed from other large metropolitan areas, has been able to attract and retain a globally oriented company like ProLogis.

The Denver Office of Economic Development has posted an interesting podcast interview with Walt Rakowich, COO and President of ProLogis where Mr. Rakowich discusses the company's relationship with the City of Denver. He cites the City of Denver's business friendly climate, strong infrastructure, world class airport, high quality amenities (mountains, sports teams), highly skilled labor force, and local culture of sustainable development as key factors that have made Denver a hospitable location for the company.

During lunch at the REIT Symposium in New York I met an executive at another REIT which is also located in Denver who told me that ProLogis has informally spun off several other local REITs in the Denver area as talented employees have started new REIT ventures. This got me thinking that perhaps there is an emerging cluster of REITs in Denver.

I found the following web site which lists REITs by geographic location and shows that there are at least nine publicly traded REITs in Metro Denver (ten if you include ProLogis which is not on this list). Also this list does not include private REITs like DCT Industrial and Dividend Capital. At least anecdotally this does seem to be a high concentration of REITs for a single metro area. I am wondering if anyone knows how Denver stacks up compared to other metro areas as a REIT host city?

Colorado Springs Retains USOC Headquarters, Positive Spillovers for Denver?

Civic leaders in Colorado Springs are celebrating their city's successful efforts to retain the United States Olympic Committee's (USOC) headquarters. See here for the city memo which describes this full details of the arrangement between the city and the USOC and here for a summary of the key points.

As reported in the Colorado Springs Gazette, the city and a private developer are offering the USOC $53 million in incentives to relocate their administrative offices to a new six story downtown office building at Colorado Avenue and Tejon Street (See rendering above. Note both images in this Blog entry are from the Gazette's website). Another near-by office building, formerly occupied by a city utility, will be made available for several national sports governing bodies. Public officials believe the activity generated by these two buildings will help revitalize the downtown district in Colorado Springs. The USOC training center at Union Blvd. and Boulder Street (see photo below from the Gazette 's web site) will be redeveloped and renovated with additional living and training facilities constructed for athletes. Colorado Springs will retain thousands of jobs, millions of dollars in economic activity and will have the right to officially associate the city with the Olympic brand.

Since this is a a blog about economic development in the Denver region, you might be asking "Why are you writing about Colorado Springs?" First, although Colorado Springs is not in the Metro Denver Region, its only 70 miles from downtown Denver to Colorado Springs, close enough for there to be substantial economic spillover effects between the two metro areas. One of Metro Denver's biggest weaknesses as a regional economic entity is that it only receives limited spillover traffic and activity from near-by economic entities, unlike cities in the northeast corridor, on the west coast or in Texas for example. A more prosperous Colorado Springs will ultimately benefit the entire Front Range and Denver region. The spillover benefits become even more clear when you consider that the likely alternative location for the USOC was Chicago.

Second, if the Denver region is serious about efforts to win the right to host a Winter or Summer Olympics, the presence of the USOC and the accompanying dignitaries and officials just down the road in the Springs is a major advantage.

Third, this retention helps reinforce the State of Colorado's "global brand" as place with an appealing sports-oriented outdoor lifestyle. The USOC would be welcomed in any community in America but its decision to stay in Colorado speaks volumes about quality of life in the state.

Congratulations to Denver's friends to the south.

A String of Positive Job Announcements Concentrated in the Energy Sector

The core function and primary concern of economic development is attracting jobs, investments, corporate operations and head offices to a region. Over the past several weeks, since the ConocoPhillips announcement, the Denver region has had an excellent string of successes in this area.

Many of the incoming jobs are in the energy or alternative energy sectors which appear poised for substantial future economic growth. RES-Americas, a wind energy company is relocating its headquarters to Broomfield from Austin, Texas. Its notable that, like the ConocoPhillips decision, this relocation did not require state economic development incentives to occur. Instead it appears to be based on the region's emerging status as a green energy cluster.

An executive at wind-turbine manufacturer Vestas said that the Front Range of Colorado is one of the finalist locations for siting a research and development hub. Vestas, of course, recently opened a turbine manufacturing plant in Windsor, Colorado. Littleton-based Ascent Solar Technologies will be expanding its production capacity with an injection of capital from Norwegian aluminum giant, Norsk Hydro ASA. AVA Solar, which makes thin film photovoltaic technology, recently decided to site its first manufacturing plant in Longmont.

Berry Petroleum, a traditional oil company, announced it is relocating its corporate headquarters to Denver from Bakersfield, California. Gas and oil companies continue to have a huge presence in the Colorado economy. According to a recently released study sponsored by the Colorado Oil and Gas Association titled Real Estate Market Impacts of Oil and Gas Industry in Metro Denver:

• 1,1519 oil and gas firms occupy almost 11 million square feet of metro area real estate.
  
• The market value of this property is $483 million with annual rents of $171 million.
• Almost $26 million in annual local tax revenue is generated by these operations.
  
• At least 26,000 workers are employed in the oil and gas sector.
  

However, thankfully, since the 1980s, the Denver regional economy has diversified into other areas in addition to energy, oil and gas. In the financial services sector, Charles Schwab is planning to bring about 500 new jobs to Denver from its headquarters in San Francisco and its operations in Phoenix.

It will be interesting to see if the Metro Denver Economy is able to continue this string of success in coming months in spite of the current overall U.S. economic downturn.

The Widom of the Union Station Developer Selection Decision: The Conservative Choice was the Right Choice

I live in the New York Metro Area where there are more than a dozen sorely needed massive infrastructure projects in various stages of planning and execution. As the economy weakens, many of these projects, which are public private partnerships, are beginning to be scaled back or indefinitely postponed.

Figure I: Rendering of the Proposed Moynihan Station in New York, First Proposed in 1993 and Likely to be Delayed and Scaled Back (Image from www.moynihanstation.org).

The Hudson Yards on the far west side of mid-town Manhattan, The Atlantic Yards in Brooklyn and Moynihan Station (the proposed new Penn Station and Madison Square Garden-see Figure I to the left) are likely to be delayed and/or reduced in scope. When projects of this magnitude and complexity get delayed or postponed, they frequently languish for years or even decades without regenerating enough momentum to be restarted. Many big infrastructure projects like the channel tunnel, which connects England and France by rail, run massively over budget.

Closer to home for Denver residents, the Auraria Campus Science Building had its State of Colorado funding eliminated due to budgetary shortfalls despite the fact that construction has already started. There is a gaping hole in the ground at the Downtown Denver Campus and a great deal of uncertainty about when and if it will be "filled in" with a new science center.

This leads me to the most important public private partnership going in Metro Denver today - the Union Station redevelopment. I have blogged previously about this project suggesting the use of green design ideas, discussing changes in the station design, and the need to integrate commercial bus service on site at Union Station.

Many people were disappointed that Union Station Partners (USPs) lost out to Continuum Partners/East West Partners (CPEWPs) on the contract to be master developer for Union Station. USPs proposed a denser development at Union Station which was closer to the original vision for the site with all of the transportation elements (bus, light rail, commuter rail, Amtrack) located underground in close proximity to each other.

CPEWPs proposed a less costly design with only the bus and commuter rail underground and the light rail above ground a couple of blocks away from the station terminal building. Critics felt this design was too much of a compromise from the original vision, complaining that it would not provide a "world class" solution for the region and that the intermodal transit connections would be inconveniently spread out. These are, of course, legitimate concerns.

This CPEWPs design has subsequently been changed again to move the commuter rail above ground for both budgetary and safety reasons, resulting in even less density at the site and further complaints from critics.

At the time the master developer selection decision was made in November 2006, the project's public leadership argued that level of density needed to pay for the higher costs associated with building the transportation infrastructure underground was very risky. Basically the public sector would be required to make upfront infrastructure investments partially financed by municipal bonds and would have to hope that market conditions would allow for the very dense real estate development to be successfully financed and absorbed to generate enough new property and sales tax revenue to pay off the public sector debt via a process known as tax increment financing (TIF). If economic, real estate or financial market conditions changed between the time the public sector investment was made and the real estate was developed and leased, the public sector could be "on the hook" for millions of dollars in debt without an adequate revenue stream to service the bonds.

According to a Rocky Mountain News Article featuring extensive quotes from then Denver Director of Economic Development John Huggins:

"[USPs], Huggins explained, needed almost every dollar of income projected from private development to pay off the public bonds that will fund a state-of-the-art travel hub. 'If the projected private development isn't there,' Huggins said, 'or if it comes late or if it isn't as valuable, there won't be enough money to pay back the loans. It was like a balloon inflated to the bursting point. One sharp edge and the thing would pop.'"

Since the selection of CPEWPs was made back in November of 2006, two things have happened. First, the costs of building the transportation infrastructure and refurbishing Union Station have escalated and the resulting design has been scaled back. Second, economic conditions have deteriorated. If the more expensive USPs plan had been selected, I beleive the whole project might have become economically infeasible jeopardizing the overall FasTracks Plan or causing large scale delays to the project timetable.

With the benefit of a few months of hindsight, the decision to select CPEWPs as the master developer was clearly the correct choice. Underground transportation infrastructure and greater density is a good thing for a transit-oriented development like Union Station but its an even better thing to have a transit hub that actually gets built and provides benefits to the region. A theoretically great design that never gets built or gets delayed for years or decades or that bankrupts the public purse would not be an acceptable outcome for the Denver Region.

The Wisdom of FasTracks

The FasTracks program is working its way from planning to implementation stages along the various transit corridors. A range of issues and challenges are emerging from cost overruns and service cut backs, to engineering challenges and community opposition to the noise and disruptions associated with rail service, to the fear and pain experienced by individual property and business owners whose land is in the rights-of-way which will be acquired to build the transportation network. In the face of all these issues, it is very easy to forget the long term region-wide benefits of building such an extensive public transport system.

In the age of $100 per barrel oil and gas prices approaching $4 a gallon, growing concerns about global warming, and ever increasing world-wide economic competition among metro areas, the FasTracks investment looks wise indeed. I found this article about the growing use of public transportation based on a study by the American Public Transit Association to be a powerful reminder of the foresight of metropolitan Denver voters in approving the plan.

The Denver Region in Richard Florida's "Who is Your City?"

I mentioned Richard Florida in two recent blog posts (here and here). Florida, currently a Professor of Business and Creativity at the Rotman School of Management at the University of Toronto, is a well known public intellectual who specializes in issues of economic competitiveness and the role of social and demographic trends in place-making and economic development.

He has a new book titled Who's Your City? which delves into how people make location decisions. Part economic development tome and part self-help guide, this book and its associated web site, take Florida's academic work and makes it applicable and useful for everyday Americans thinking about a relocation decision.

The Who's Your City? web site has several very interesting features including a "Best Cities" section and a series of graphic maps. In the Best Cities section among small regions, Boulder is ranked as a top 5 city for young singles, mid-career professionals, families with children and empty-nesters and Denver is ranked as a top 5 large region for mid-career professionals.

The maps are also very interesting, showing how real estate prices, economic activity, innovation, personality types, gender distribution, population and other factors are spread across geography. Its very interesting to see how the Denver Metropolitan Region appears on these maps. Collectively they convey how the region is a relatively remote island of activity surrounded by economically sparse parts of the country.

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.