Broe project: A world of possibilities

WINDSOR – The storefront for the Great Western Development Co. looks comfortable at 503 Main St. in Windsor. And that is exactly the point.

For more than a year now, Great Western’s parent Broe Cos. has been wrangling over annexation of the 1,400 acres it acquired from Kodak Colorado Division. Broe has the property and a compelling argument, but it did not have a presence.

“We want to demonstrate that we want to be involved in the community,´ said Alex Yeros, managing director for Broe. “Ever since we became part of the process that brought the (O-I Inc.) bottling plant to Windsor, we have felt a renewed confidence that the manufacturing industry might be interested in Northern Colorado.”

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And if the manufacturing industry needs an industrial park designated a Foreign Trade Zone, it may also need the means to transport manufactured goods – on Great Western’s rail lines – or any number of other services that belong to the privately held Broe matrix.

The company, founded in 1972, owns or operates approximately $2 billion in assets with interests in commercial real estate, short-line and regional railroads, energy and some other smaller enterprises, employing about 3,000 in the U.S. and Canada.

While the course of the annexation has not run smoothly, encountering concerns over the relative taxability of residential and commercial uses, progress in general has moved along. A revised plan calls for 682 acres, or 49 percent of the site, to be used for heavy, light and general commercial activity; another 365 acres is designated for open space, and 319 acres for residential mixed use. The final 2 percent would be railroad right-of-way.

“The Great Western Development Co. looks for ways to put together transportation and real estate for industrial development,” Yeros said. “It’s a puzzle that we understand, and it’s the railroad that makes it possible.”

The railroad is the short-line Great Western Railway, owned by Broe’s OmniTRAX. The biggest piece in the Windsor puzzle is the industrial park, zoned for both heavy and light industrial.

“Industrial manufacturing brings in primary sector jobs,” Yeros said. “These industries make large investments in the area and then pay higher than average wages.”

He pointed to the O-I bottle manufacturing plant and the just-opened Front Range Energy facility, which will be capable of processing approximately 14 million bushels of domestic corn into 40 million gallons of ethanol annually, as examples.

“For O-I, the average pay is about $55,000; for Front Range Energy it’s about $45,000,” he said. “Of course, those are just averages. But the point is that they are not service sector jobs. Making things here is good for Windsor and the region; you can have just so many Wal-Marts.”

Yeros added that aside from salaries, industrial operations invest a lot of money at the onset – O-I built a $20 million plant – and personal property taxes on expensive equipment add dollars to state, county and municipal coffers every year.

“This is a way for Windsor to develop its own economy separate from the bigger economies in Greeley, Loveland and Fort Collins,” he said. “It can’t be fiscally healthy unless it establishes its own economic growth.”

Rippling benefits

To put some numbers behind its claims that Broe would be good for Windsor, the company sought out the services of a disinterested third party, Rhonda R. Corman from the University of Northern Colorado’s department of economics. For her analysis, Corman used the Colorado INSIGHT Fiscal Impact Model, originally developed by Arthur Andersen to analyze the return to a municipality for incentives offered.

“In this case, the model captures the value added to the economy of Windsor,” Corman said. “It calculates the ripple effect of economic benefits over 10 years. I took the data I was given and ran it for the three targeted land uses identified for the acreage, including industrial, retail/commercial and residential.”

Corman explained that the 10-year time frame is useful because it is not realistic to say that all the benefits will accrue in the first year.

“You may take what you earn for an hour’s work and spend it right away, or you might save it and spend it much later,” she said.

The numbers derived from the analysis look good. The city of Windsor stands to enjoy rippling economic benefits of approximately $1.3 billion over the decade, while the estimated public revenues, primarily from taxes, come in at $160.4 million over the same time period.

Corman added that the balance of the development – industrial, commercial and residential – also holds long-term benefits for the community.

“If the rest of the world disappeared, people in Windsor could continue to live and work there,” she said.

The economic impact of the development as a whole certainly looks good for Windsor and, not incidentally, good for Great Western’s trains, ready to serve the companies that locate there. Raw materials for O-I’s bottles and grains for Front Range Energy’s ethanol arrive by rail car. When the ethanol is ready, it leaves the plant in specially designed cars.

“Ethanol travels in double-hulled cars,” Yeros said. “The integrity of the rail car can survive derailment, and so there is little risk in the release of hazardous materials. We think it’s important to keep a commodity like ethanol in a defined corridor. It reduces risk and reduces accidents.”

Foreign Trade Zone a plus

Another interesting piece of the development puzzle is the industrial park’s designation as a Foreign Trade Zone. The Denver zone, of which the Great Western site is an extension, has not created a lot of global interest. But at 13 acres it is small; the additional 500 acres in Windsor, plus Broe’s international presence, may attract attention and/or larger operations.

The Foreign Trade Zone concept is simple: a designated area where goods can be shipped and stored or manufactured without paying duties until they pass from the zone. In fact, if the manufactured products are bound for markets outside the country, they may never be taxed at all.

“A Foreign Trade Zone can help businesses manage their cash flow,” Yeros said. “A wine importer, for example, can use the zone to store the wine until there is a demand. A manufacturing or assembly plant can bring in less-expensive foreign materials duty free and make the product domestically.”

Yeros has one more compelling argument for annexation of Broe land into Windsor.

“This land has been vacant for 30 years,” he said. “It could stay vacant. But we have an opportunity to do something. We’re all over the world. We’re going to do business because that’s what we do.”