Loveland’s enterprise zone waiting to attract employers

LOVELAND – When Alistair MacDonald read that the city of Loveland was moving to expand its enterprise zone, he knew he had to act fast to become part of it.

The proposed expansion was right across the street from his own business – Test & Measurement Systems Inc. – and two office buildings he owns. The zone designation creates tax incentives for businesses to locate or expand in an area. If MacDonald’s property should ever sit empty again like it did after the tech bubble burst, he’d be at a major disadvantage in attracting new tenants.

“I went to the city council and they were very receptive,” MacDonald said. “The problem was that the plans were fairly well advanced without this inclusion.”

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The city council, along with the Larimer County Commissioners and Northern Colorado Economic Development Corp. decided to include MacDonald’s property in its proposal for expansion of the zone, and the Colorado Economic Development Commission approved it in July.

“They basically agreed it would be unfair to have a small business disadvantaged vis-a-vis large companies across the road,” MacDonald said.

Lew Wymisner, assistant director of the Larimer County Workforce Center, pushed to get the expanded enterprise zone approved in Loveland. As the person charged with administering the county’s four zones, he’s seen the benefits since the status was granted back in 1993 for a portion of Loveland, as well as Fort Collins, Berthoud and Wellington.

“It’s basically a state tax-credit-as-incentive program for businesses that invest – by opening or expanding a business – in an enterprise zone,” he said. “I think in Larimer County it’s been a successful program.”

In recent years, Wymisner estimates, Loveland has lost between 400 and 700 manufacturing jobs. Much of that hit  to the original zone came along the Southwest 14th Street corridor, adjacent. Last year Water Pik Technologies announced that it would be vacating its business and Agilent Technologies completed consolidating its staff into one of its five buildings, leaving 800,000 square feet empty. Combined with the Water Pik building, about a million square feet of office and manufacturing space quickly became vacant in an area spanning just a few blocks.

Across the street are the two buildings MacDonald owns. His business, which employs 12 people, and another high tech company, Smart Sensor Systems Inc., occupy one building. Next door is a building he custom-built around 2000 for a fiber-optics switching center. But before that company could move in, it went bankrupt. The building then sat empty for two years.

Today that space is occupied by Wolf Electronix, but McDonald wants to be prepared for any economic changes reminiscent of 2000. “When I got (the enterprise zone status), there was no vacant space in the buildings,” he said. “With high tech that changes very quickly.”

Advantages to expanding

To MacDonald’s Testing & Measurement Systems, the advantages of being in an enterprise zone are nil because he has no immediate plans to expand. Even if he did, benefits such as a $500 training allowance for a new employee are insignificant when he’s paying that employee engineering wages. Still, he understands that the status could be extremely beneficial to him as a property owner.

“If one of the businesses here was to fail and the property became empty, (the zone) helps with renovations. It helps with new hires, additional hires,” he said. “It is a potential advantage rather than an immediate payoff.”

So far, MacDonald hasn’t heard of any company scoping out the digs across the street. “What I understand is they’re still trying to get them all empty and cleaned out,” he said.

Jacob Castillo, vice president of NCEDC, said there have been company executives looking into the expanded zone area, though he wouldn’t go into specifics. “I have been marketing and promoting the site and have seen some interest in the area,” he said.

As far as MacDonald’s property across the street, Castillo explained that the zone status isn’t just about recruiting new business. It was also created to help existing employers have an added incentive to expand, thereby helping the community retain and grow the businesses it already has.

Officials are optimistic that the zone status will help 14th Street Southwest, as it already has within the previous boundaries of the zone. Wymisner said it’s crucial that the vacant space be made attractive so the area can gain back the jobs it’s lost, and may continue to lose.

In addition to the impact of those primary jobs, Wymisner explained that manufacturing jobs spin off up to three times as many jobs in the retail and service sectors. Thus, businesses like dry cleaners, movie theatres and restaurants may have to cut back, or at least won’t be expanding.

“Those 400 (manufacturing) jobs maybe support another 500 to 1,500 jobs in the other sectors,” he said.

Betsey Hale, business development director for Loveland, is confident that the zone status makes the Agilent campus and Water Pik site more attractive than other properties currently up for grabs.

“The benefits are pretty significant,” she said.