Cities offered Eldon James incentives to stay put

Eldon James’ decision to relocate its headquarters to the Denver area this year has left Northern Colorado economic-development officials wondering just what more they could have done to keep the company here.

“It’s a little frustrating,” Fort Collins Economic Health Director Josh Birks said of the impending move.

Although it’s not a huge company – the maker of plastic tubing and fittings for the healthy care and food industries employs just 35 – it is an operation that people in both the private and public sectors like to point to in trumpeting the region’s attributes to companies thinking of relocating or expanding here.

The move is even harder to swallow given that Eldon James CEO Marcia Coulson is in the midst of serving her first term on the board of the Northern Colorado Economic Development Corp., the primary jobs-creation organization in the region.

That term ends next year, though by then, Eldon James will be long gone.

In her first interview on the topic late last week, Coulson said she didn’t want to leave but, in the end, had no choice.

It was a matter, she said, of finding the right building at the right time and, although she declined to reveal the price, apparently the right cost.

Efforts to retain the company began about two years ago, and until last month, all indications looked good.

The Loveland-grown company first announced it was searching for a place to expand its headquarters in mid-2010, purchasing 123 acres of land in September of that year adjacent to its current location at the end of 71st Street.

The City of Loveland got to work on incentive possibilities for the company, according to Loveland Economic Development Director Betsey Hale.

Those incentives can range anywhere from cash to fee waivers and are typically tied to a guarantee from the business related to job creation or either property or sales tax increases.

Loveland worked closely with Eldon James, Hale said, even making amendments to its building code to accommodate the company.

“We always want to keep our existing employers,” Hale said of the city’s efforts to retain Eldon James.

According to Coulson, Eldon James had invested $70,000 investigating possibilities for the land before realizing it would not be able to build what it wanted on the parcel. Neither Coulson nor Hale would detail the issue.

Eldon James then moved on to Fort Collins, where Birks pulled out all the stops in hopes that the company might relocate into a building near the intersection of Timberline and Harmony roads.

“We were told it needed to do this quickly,” he recalled. “And we were pretty responsive.”

Like Loveland, Fort Collins was ready to work with Eldon James, providing incentives and possibly even helping it to secure financing. The city had a plan to get Eldon James into the building by summer 2011, Birks said.

While no formal proposal was written, Birks had initial approval to go forward with an existing conditions study, which is a necessary step to creating an Urban Renewal Area, in the event that Eldon James decided to locate in the chosen building.

Businesses that locate in URAs are eligible for tax increment financing, which could have helped finance any retrofitting or other necessary construction. In addition, Birks said, the city was willing to make use of private activity bonds, which could have provided millions of dollars in low-interest debt to the company.

Private activity bonds are financed through state allocations to municipalities. Fort Collins receives between $6 and $6.5 million annually, Birks said, and the funds are distributed on a first-come, first-served basis, meaning that Eldon James could have received all of those funds, if that had been deemed necessary or appropriate.

“We were ready to bend over backwards a couple of times,” Birks said. “I feel like I know I did everything I could.”

But after seven months of discussions with the owner of the Harmony property, an agreement could not be reached, Coulson said.

At that point, the company began talks with Timnath, and in December, Eldon James announced that it would build a 75,000-square-foot building in Timnath worth $12 million. Eldon James would have received no incentives from the town.

A groundbreaking scheduled for March 1 came and went.

Then, in April, Eldon James surprised all by calling off the Timnath plans.

Time constraints, according to Coulson, had killed the deal.

“The need to ramp-up production has set new priorities for the company, and we’re moving in a direction that will suit our space requirements, as well as our time constraints,” Coulson said in a news release at the time.

A customer with whom the company had been working for two years told Eldon James that it couldn’t wait for the new headquarters to be built, Coulson said last week, so it became clear that the company would have to rethink its plan and find an existing building instead.

“Timnath didn’t do anything wrong,” Coulson said.

Eldon James is now moving to Stapleton.

The company, Coulson said, wanted a well-kept building with curb appeal, and she could find nothing in Northern Colorado that both suited the needs of the company and projected the right image.

By the end of this year, Eldon James will have moved its headquarters to a 74,000-square-foot building on East 47th Avenue in the Northfield Stapleton development.

The 5-year-old building is well kept, according to Coulson, and will be retrofitted with an 11,000-square-foot clean room, which will be complete within 90 days.

The company will move to Stapleton in phases, expected to be complete within six months. No definite decisions have been made about the future of the company’s other two buildings, one in Fort Collins and one in Loveland.

Stapleton offered Eldon James no incentives, Coulson said.

“They just had the facility we needed,” she said. “We just don’t have an abundance of buildings for manufacturing companies (in Northern Colorado).”

Molly Armbrister covers real estate, banking and health care for the Northern Colorado Business Report. She can be reached at 970-232-3139, marmbrister@ncbr.com or twitter.com/MArmbristerNCBR
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