We find ourselves in the middle of one of the greatest wealth transfer periods of all time. Those with wealth must decide whether they want to make transfers, and if they do, they must decide how much, to whom, when and in what structure?
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The BEDC is a nonprofit public-private partnership with the mission of attracting new businesses to Broomfield and retaining existing ones. The organization has had a hand in a number of notable successes over the years, including the growth of the Interlocken business park and the decision by companies such as Level 3 Communications Inc. (NYSE: LVLT) to locate in the city.
But the BEDC’s role in Broomfield has changed significantly over the past three years, as the city government — once the BEDC’s primary financial supporter — has created its own economic development department and cut funding to the organization.
So now the BEDC is looking beyond Broomfield’s borders, following a Feb. 21 board meeting at which its directors approved a plan to pursue a regional strategy. The new organization also would be focused on representing its corporate investors.
The new regional organization with a new name and members could be formed within nine months, said BEDC executive director Mike Kosdrosky. The organization would likely leave Broomfield for what Kosdrosky called “a neutral location.”
Nine months is the best-case scenario, said Kosdrosky, adding that a year is more likely. He also acknowledged the effort might not work out if the organization could not find investors or local partners.
“It’s not a done deal by any means. This is an evolving process that we have to build support for,” Kosdrosky said.
The effort will take a lot of legwork, especially as the organization tries to recruit enough members to give it the finances to start up. Its leaders also want to work with other economic development agencies to form mutually beneficial partnerships.
Competition between cities or states seeking to attract large businesses can be nasty, although cities and organizations in the Denver-area have agreed to play fair, Metro Denver Economic Development Corp. chief executive Tom Clark said.
Kosdrosky said it will be necessary to form strong partnerships with businesses, city governments and private groups such as the Boulder Economic Council for the idea to work. Supporters of the new organization do not see themselves as competitors.
“We’re not trying to run roughshod over anyone or step onto their turf,” he said.
Kosdrosky began in January as the BEDC’s new executive director after working with the organization as a consultant. He is the third person to lead the BEDC since 2010.
BEDC directors decided to move forward after a feasibility study by R&M Resource Development, a Denver-based economic development consultant.
“The consensus was this is long overdue,” Kosdrosky said.
The city of Broomfield is onboard with the idea, according to Bo Martinez, the city government’s economic development director.
“At the end of the day,” Martinez said, “we’re going to support the organization in whatever they decide.”
The city plans on remaining an investor, but the BEDC, with a focus on serving the private sector, will have to work hard to find corporate support.
“The biggest challenge is always fundraising,” Martinez said.
Clark said it can take more than $1 million annually to run a good sub-regional group, which typically needs a staff of four or five people and has to spend a lot on marketing and travel. The Metro Denver EDC has 10 staff members and a $3.2 million budget, which both are comparatively small for organizations of its scope, according to Clark. A small agency is only possible because of its affiliation with the Denver Metro Chamber of Commerce, he said.
So far, officials in both local private economic development organizations and on city staffs are willing to learn more about what the BEDC has in mind. They also made it clear that getting the details right will be crucial, but many feel the concept has merit.
Clark said the Broomfield group approached him about four or five months ago to discuss the idea and get his input.
The Metro Denver EDC is the Denver-based organization that promotes the area to national and international audiences. It is privately financed and has more than 70 partners along the Front Range.
Clark said the Metro Denver EDC is “agnostic” about whether neighboring cities in its area decide to form what he calls “sub-regional” groups. There are several in the area, including ones in Jefferson and Adams counties, which presumably would border the new organization.
The Denver metropolitan area’s northwest quadrant is the only one without a sub-regional group, and there are ways it could benefit businesses in an area that the Metro Denver EDC and the city-based groups do not, Clark said.
The Metro Denver EDC works on major efforts that benefit the entire region, such as when a corporation is comparing cities around the nation when picking the site for a new campus. It also helps promote major industry clusters, such as aerospace and clean tech, and was a major player in the effort to persuade United Airlines to create a nonstop route between Denver International Airport and Japan.
Clark said the regional perspective means his organization doesn’t know individual communities as well as locals do. City-based groups, whether they are governmental bodies or public-private partnerships, are much better suited to dealing with issues such as regulations and incentives. City groups also handle “the real grunt work of economic development” such as making sure the public works department installs the traffic light outside a new campus on time, he said.
Sub-regional groups tend to be privately funded and appeal to companies whose interests expand beyond municipal borders. They also can take stands about candidates and policy issues that would be inappropriate for a publicly supported group, Clark said.
Clark’s recommendation to the BEDC was that it start with a thorough feasibility study conducted by a respected consultant. He also suggested its efforts be “highly transparent, so they didn’t create a lot of paranoia from the cities up there.”
Getting communities to buy into the new organization and trust it is a must, Louisville economic development director Aaron DeJong said.
“There’s always that fear that one community is getting favored over another,” he said. “There needs to be trust that everyone gets a fair shot.”
The concerns cities have about their neighbors poaching businesses has historic justification, Clark said. Cities and economic development groups often engaged in “tawdry” practices to land major factories or corporate offices.
Economic developers have developed standards to limit unethical conduct. Members of the Metro Denver EDC must agree to a code of ethics that precludes them from poaching businesses from other members, Clark said. It keeps members in line, but they do lobby for more attention and complain they’re getting overlooked.
However, Clark said, if everyone’s worried, then no one is getting an unfair edge. “If I have all my partners pissed off at me at some time,” he said, “I must be an honest guy.”
Local communities also have very different policies and philosophies about growth, and differences need to be accommodated, DeJong said.
For example, Boulder emphasizes retaining existing and growing companies, while Broomfield has the Interlocken and North Park business parks which are candidates for new corporate campuses or office buildings.
Boulder Economic Council executive director Clif Harald said the new group would have to show it could provide something the Metro Denver EDC doesn’t. The BEC is a member of the Metro Denver EDC and thinks it does a great job of representing the region and encouraging members to collaborate, he said.
Longmont Area Economic Council president and CEO John Cody said the new organization’s impact on his city could be “very little or none.” Cody said his understanding is that it is focused on communities along U.S. 36. He said he met with R&M for its study.
“We don’t consider ourselves part of the corridor,” he said.
Cody said a new organization could try to raise funds from LAEC members, and that could lead to tension between the groups.
“We would not view that necessarily as friendly behavior,” he said.