Fort Collins must find way to accommodate Celestica

Fort Collins awoke to a newspaper front page April 9 containing several significant articles. At the top of the page were the results of the municipal election. Below the fold was an article announcing that Celestica was coming to Northern Colorado.

When rating the impact of the two events, the Celestica story undoubtedly will be of major import to the communities of Fort Collins, Greeley, and Loveland.

What is Celestica, you ask? With some in Fort Collins perceiving the municipal election as another step towards Boulderization, readers may have thought the article was an announcement by Celestial Seasonings of a Northern Colorado manufacturing facility. Or, given all the recent changes in the placement of articles in the local newspaper, it could have been a book review of The Celestine Prophecy positioned on page one.

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While the book is an adventure in pursuit of a spiritual mystery, the pursuit of Celestica by communities in Northern Colorado will be the economic-development mystery played out over the course of 1997.

Celestica is a Canadian company that intends to acquire Hewlett-Packard Co.’s Fort Collins printed-circuit assembly operations. Presently, HP employs almost 600 at its printed-circuit assembly operation. Many of these employees are expected to join Celestica.

On Jan. 1, 1994, IBM Toronto Manufacturing became Celestica. Eugene Polistuk, president and CEO of Celestica, said “in choosing the name Celestica and its fireball symbol, we chose to depict our spirit rather than our business. Celestica is a vibrant technology business focused on finding solutions that satisfy the needs of its customers. We intend to be a significant player in the North American electronics manufacturing arena. Celestica is a name that lives up to our vision.”

In making the announcement of the Fort Collins acquisition, Polistuk further said, “this announcement is very strategic for Celestica, enabling us to grow to meet the needs of our customers globally. We intend to establish the new facility as our major U.S. technology center. Hewlett-Packard is one of the world leaders in information technology, and Celestica looks forward to playing a key role in its future success.”

HP recently acquired a purchase option on 150 acres immediately south of its location on Harmony Road. This site owned by the Moore family could become the preferred location for Celestica’s proposed 200,000-square-foot manufacturing facility for Northern Colorado.

However, speculation has already begun that the Fort Collins site may not be the exclusive potential location in Northern Colorado. With HP’s influence in both Greeley and Loveland, expect respective economic-development organizations to highlight the strengths of their cities.

The political football in Fort Collins may prove to be too much for Celestica. With its newly passed conflict-of-interest charter change, the acid test may be how the city deals with Celestica. Two council members are Hewlett-Packard employees with a direct financial conflict.

Another council member has recused herself on prior HP issues because of her consulting with the company. Two of the remaining four council votes were some of the strongest voices opposing the $3 billion Hyundai Electronics America expansion into Fort Collins.

Another problem is the city’s use-tax policy. As negotiations begin for a site in Northern Colorado, the City of Fort Collins will likely send Celestica a bill for use taxes as great as $3 million on the transfer of equipment from HP. Nothing spurs negotiations as quickly as receipt of an unexpected tax bill.

With ties to both IBM Corp. and HP, Celestica is a vital piece to the continuing economic development in Northern Colorado. As part of the much-needed manufacturing community, it will provide many high-paying base jobs in the electronics industry.

With initial employment of 500 added to Celestica’s current worldwide employment of 5,500, any city in Northern Colorado would be proud to be called Celestica’s major U.S. technology center. Local governments and their leaders should be ready to play a key role in helping Celestica with its future success.

Former Fort Collins mayor John Knezovich is a certified public accountant.