The lure of Colorado

Weather, scenery matter, but biggest factor is business climate

When people hear the name Colorado — snow-capped peaks, clear mountain streams, blue skies and hiking trails comes to mind. This alone is an enticement for anyone to come to the state.

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But Colorado is fortunate in many other ways as well. It is not only the natural beauty that attracts people but also the business climate, with many high-tech and biotech firms locating here creating a large pool of skilled employees and suppliers.

Excellent universities and research centers as well as the reasonable cost of living all add to the incentive package when businesses from across the country are looking for a place to relocate.

“It is not any one thing which attracts businesses to this area,´ said Wendi Nafziger, vice president of the Economic Development Association of Longmont. “Increasingly, I hear more comments about the high-tech job base for employers. We can attract employees from Cheyenne to south Denver. People who work here don’t mind the commute. A huge asset is the three universities, University of Colorado, University of Northern Colorado and Colorado State University. Also, we have the lowest cost of housing in Boulder County.”

Nafziger said that public schools from K-12 also influence businesses looking at relocating, and the proximity to Denver International Airport and to the City of Denver for shipping and transportation attract businesses.

“Companies do a lot of research on an area before they move,´ said John Hunt, president and CEO of EDAL. “I think a business looks at whether a city has its act together in the public and private sectors. They want to know how the city government, chamber and business community interact – if they have a good working relationship or not. They also look at business productivity, graduates and job skills in an area. And they look at the work ethic. They will talk to other companies and resource managers. There are so many factors that businesses look at.”

Longmont has traditionally actively recruited businesses at trade shows and trade missions to Japan. But recently, EDAL has focused its efforts on existing businesses, and the city maintains a limited incentive program.

“We mostly focus on existing industry,” Nafziger said. “We do have a fee-waiver program, but the city just cut the building and public transportation part out of that program.”

When companies do their homework, Colorado scores very well with companies looking for a place to relocate. In a study called “Report Card on the States,” conducted by the Corporation for Enterprise Development in Washington, D.C., Colorado has scored at the top for four years in a row.

“We tied with Utah in 1996,´ said Kim Schmidt, senior business development representative with the Colorado Office of Business Development. “We are blessed by being in Colorado. If businesses want to move here, they have a better chance of keeping their employees because people want to live here. Northern Colorado does very well (attracting businesses) because the communities are distinct and separate, yet very accessible. They have good universities, and Rocky Mountain National Park is a wonderful resource.”

Even though the cost of living in Colorado is rising – housing costs have gone up, and the low unemployment rate in the state has caused some concern with businesses trying to find enough skilled workers. Colorado still fares well as a favorable place to do business compared to other states in the nation.

Small companies will look at incentives differently than large companies, according to Roland Mower, president of the Fort Collins Economic Development Corp. Mower said that the issue he hears most is quality of life for small businesses.

“Culture, housing, schools are a big factor for small companies moving to this area,” Mower said. “Education K-12 to universities is a factor for larger companies because of the research going on at CSU and the other universities in the area. Most high-tech companies recruit students from CSU.”

Mower said that Fort Collins is just reaching a critical mass of high-tech companies, where there is a pool of highly skilled employees from which businesses can choose. He added that there are a large number of homes available in all price ranges. However, the rising cost of living in Colorado may eventually take its toll.

“We have seen a cost erosion in some areas here,” he said. “Labor costs are going up, housing costs are going up, but we are still very competitive in utilities. We are very conservative, and we don’t offer much in terms of tax relief to new businesses. We are losing some of our competitive edge, but we are real competitive in most areas. There is a strong history of businesses that just want to live here.”

Fort Collins does not do any outside marketing to attract new businesses to the city, except for a Web page on the Internet. The city does not offer incentives to new businesses, and most of the work done by the economic-development corporation is for existing business in the area.

Fort Collins boasts about 392 primary businesses and 18,352 employees. The average wage for a primary job is $42,800.

In Loveland, the policies on recruiting are similar to Fort Collins’.

“We are not actively recruiting businesses,´ said Don Churchwell, executive director of the Loveland Economic Development Council. “We are not doing what some other cities are doing for incentives. We hand out packets of information when people call for information. There are cities that try to offer cash incentives, and we don’t do anything like that. We have given incentives in the past on a case-by-case basis, but we have no real set policy. If the company offers a lot of high paying jobs, we consider incentives.”

Some businesses considering relocation have needs that are so specific that location is secondary to a specific space.

“We were looking for a certain type of facility that was heavily crane-served and rail (road) served,´ said Brad Begin, president of Metal West Inc., a company that processes steel for sheet-metal shops along the Front Range. Metal West recently moved from downtown Denver to Brighton.

“The city offered us training grants and some tax abatements and helped us solidify our decision,” Begin said. “We wanted to stay close to our customer base, which is mostly south Denver and Colorado Springs.”

Donna Spradling, executive director of the Greater Brighton Economic Development Corp., said that one of the city’s biggest attractions for businesses is being in the enterprise zone, which offers a variety of tax credits and incentives to businesses locating in that area.

“We still have fairly reasonable land costs, and we are at the north metro edge, so we have a metro phone number, which is important to many businesses,” she said

The cost of doing business is a major consideration for many businesses that are considering relocation. Jack Crews, president of Cheyenne LEADS, a private nonprofit economic-development group, says Wyoming has an edge over most other states.

“In Wyoming, there is no corporate or state income tax,” he said. “Workers comp and utility rates are very low. You can get a building permit in 10 days, and the average cost of housing is $91,000. This is one of the most economic areas in the country. What I hear most often from businesses is that the cost of doing business here is the lowest in the country and that we have a very business friendly environment.”