Greeley ponders life after H-P

GREELEY — The man hired to plug Greeley and Weld County into Northern Colorado’s economic juice was about an hour into his first day on the job when the news came.

But for Ron Klaphake, the new president of the Greeley/Weld Economic Development Action Partnership Inc. — and for most Greeley public officials and business watchers — the Jan. 17 announcement that Hewlett Packard Co. would close its Greeley plant and ship its 640 jobs to Fort Collins was an anticlimax.

“I knew this was coming,´ said Klaphake, who was still unpacking from his move to Greeley from a similar job in Missoula, Mont. “I was told before I got here that this plant would probably close. But we need to remember that this economy is a lot stronger than one company or two companies. … What I think everybody needs to do is sit back, take a deep breath, and take time to consider what our assets are.”

Don’t panic. Take stock. Meet the challenge. The message, similarly spoken by those with the most at stake in Greeley and Weld County, was repeated over and over during the week following H-P’s decision. But the clear-eyed among them also said meeting the challenge means answering the questions. They include:

* Why, as most people heard for the first time on Jan. 17, do nearly 500 of the 640 H-P employees at the Greeley plant live in other communities, two-thirds of them in Larimer County?

* Who, among office and manufacturing prospects, can be enticed to buy and occupy the 300,000-square-foot building that H-P will vacate?

* What can Greeley offer in the way of business incentives to lure another provider of hundreds of good-paying jobs to the city?

* When can Greeley expect to enjoy the economic fruits that other communities in Northern Colorado are picking with increasing frequency?

The questions are even more piercing in light of the likelihood that another major employer, the headquarters of the newly formed ConAgra Beef Co., will also move from Greeley to Larimer County.

“The psychological impact is the main thing, but I do think they will find somebody to fill the shoes here,´ said Charlie Monfort, scion of the family whose meat-packing business was gobbled up by ConAgra in the late 1980s, and who said he sees the loss of ConAgra’s headquarters as a foregone conclusion.

“The fact that this is coming on the heels of ConAgra’s announcement (that it would shop Larimer County for a new headquarters site), makes it a one-two punch that’s difficult for the town to take,” Monfort said.

H-P’s move was “a real estate decision, rather than a business decision,´ said Renee Benzel, spokeswoman for the company’s sprawling Fort Collins complex. The company said in a statement that the decision was made “as a direct result of HP’s companywide real estate assessment program, which is intended to increase space efficiencies and maximize workspace utilization.”

Reactions of people with the most at stake — those employed at the Greeley plant — varied according to their commuting patterns. The clear majority will welcome the transfer, set to take place gradually over the next two years.

“I am going to miss the (Boomerang) golf course,´ said Steve Ivy, a product marketing manager. “But I live in Fort Collins and sure as heck will like the drive better. I’m pretty excited.”

But others will spend the next few months pondering not just the relocation of jobs, but the possible uprooting of families.

“I have mixed feelings,´ said Barb Lauer, an administrative assistant who is among the quarter of the plant’s employees who live in Greeley. “With kids in schools here, I won’t be able to buzz over there and help them out during the day. … I kind of suspected this would happen. It’s been a rumor.”

Greeley and Weld County officials who will face the task of assisting Hewlett-Packard in “disposing of the Greeley property,” as the company put it, said assessment of community strengths was as important as assessing the value of the building and the 380 acres of land it sits on.

“If we had a 300,000-square-foot spec building, what would we do with it?” Klaphake asked, matching a rhetorical question to a sudden reality. “We have an asset now, and we need to come up with a plan for ways to market it.”

Speculation about a possible buyer in the days after H-P’s announcement centered on Dovatron Inc., a Longmont data storage company that recently purchased H-P’s Greeley-based Storage Systems Division’s manufacturing business and that will employ the 165 people who run it.

But while logic might be on the side of keeping Dovatron’s acquisition where it is, the company and its new corporate parent, Flextronics Corp., have other plans, according to Greeley economic-development officials.

“Dovatron has told us that that is not the building for them,´ said Cathy Schulte, who served as acting EDAP president until Klaphake’s arrival. “They have indicated they want to build somewhere in Northern Colorado, but they’ve said that that (H-P) building is not the kind of facility they have in mind.”

Becky Safarik, Greeley’s director of community development, said H-P’s decision, and the likely outcome of ConAgra’s regional shopping trip, mean that Greeley must come to grips with its role in a regional economy, rather than its position as an economic center unto itself.

“We have an employment base in Northern Colorado shared between the communities,” Safarik said. “We’re all sister cities. ` I think there’s tremendous potential for Greeley to posture itself as an effective partner in the region.”

If Greeley needs a character reference for prospective office and high-tech employers who might consider locating in or very near the city, it can offer State Farm Insurance Co. — about to jump from its Evans headquarters to a new, half-million-square-foot office complex that will begin to take shape this year on Greeley’s western fringe.

Amid all the bad news about ConAgra and H-P, the insurance giant’s decision last year to stand fast in Greeley looks all the better.

“We really do hate to see HP leaving, said Alan Miller, public affairs manager for State Farm’s Evans headquarters. “They’ve been good neighbors in this community. ` Greeley’s been very good to us, and we fully intend to stay here and invest a lot of money in our corporate headquarters here.”

Secondary to the loss of jobs and the loss of luster that the H-P move will mean for Greeley is the possible loss of tax income. Owners of the building and land, H-P and whomever purchases it, will continue to feed Weld County’s property-tax coffers. But prolonged vacancy of the site would mean city sales and use tax contributions would drop to a trickle.

Hewlett-Packard’s Colorado Springs-based accountants were not ready last week to release tax tabulations for the year just ended. But the Weld County assessor’s office said the company paid $1,044,943 in 1999 property tax, up from the $918,755 paid the prior year. In addition, HP contributed $352,000 in city sales and use taxes during 1998.

“The impact will pan out over a long period of time rather than immediately,” Greeley finance director Tim Nash said. Availability of H-P’s building is “another opportunity to have as many or more jobs come in and all the business with it,” Nash added. “But until then, we could see some erosion in sales tax.”

Along with all the talk about loss last week, talk about the inevitable recovery was just as widely broadcast. Safarik, and others with an eye on Greeley’s role in a fast-growing regional economy, implied that H-Ps anti-climactic announcement might soon seem a vague memory.

Mike Kelley, spokesman for Celestica Colorado in Fort Collins but who worked at H-P’s Greeley site for 12 years, said Greeley’s place in the region would eventually allow it to pull in technology-based business.

“Finally this whole region of Northern Colorado is starting to look at itself as a regional market, not a community market,” Kelley said. “People are anxious to move to the next level here.”

Timing is everything, or so goes the shopworn business adage, and if Greeley residents and public officials find a bright side to HP’s announcement, it is that it comes when the regional economy is rising.

“The economy in this area has proven to be very strong, the timing on this is as good as it could be,” Monfort said. “The economy will slow down eventually. …It’s a great building. I think people in Northern Colorado will find someone to come in here.”

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