As county grows, Boulder shares its wealth; service firms grow

Less than six months since Boulder officially put its blessing on the organization of an Economic Sustainability Steering Committee, headed by city councilmen Dan Corson and Rich Lopez, a consultant has returned with the most up-to-date economic analysis of where the city now stands.

Bill Anderson, from the San Diego office of Economic Research Associates (ERA), presented his preliminary findings to the Boulder Chamber’s Community Affairs Council this week. As a panelist for the chamber forum, held after my column deadline, I got a look at ERA’s numbers.

Some conclusions won’t knock the socks off anyone who keeps tabs on Boulder’s economic well-being; while other figures revealed some interesting trends.

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To no one’s surprise, ERA says Boulder’s “economic dominance in the region is eroding as surrounding communities, particularly Broomfield, grow.”

“This trend,” ERA found, “will affect Boulder’s position in almost all industry sectors, other than state and federal governments.”

Another no-brainer is the conclusion that “strong economic growth” is impacting Boulder’s quality of life due to “traffic congestion, difficulty in providing affordable housing, and regional air pollution.”

All of us who live and work here know that as Boulder limited growth, its had to share its business wealth to surrounding cities. The near build-out of Interlocken business park in Broomfield and the new FlatIron Crossing mall has made that city a new economic powerhouse. So much so, that it’s becoming its own county.

Despite Boulder’s go-slow attitudes, the city and the county have benefited tremendously from Colorado’s economic boom of the ’90s. Real per capita income growth in Boulder County of 3.4 percent annually from 1990 to 1998, ERA reports, “has been almost two-and-a-half times the national rate of 1.4 percent” in that period.

Income growth naturally has brought higher retail sales, which along with use taxes, remains a big chunk of Boulder’s revenue ? 37.8 percent. Property taxes accounts for 14.7 percent of the city’s revenue.

Boulder depends on tax money to grow to pay its own bills ? the biggest of which are police (21.7 percent of the budget); parks and recreation (17 percent); and fire and emergency preparedness (10.5 percent.)

And that’s why, simply put, city fathers are trying to understand exactly how to keep the local economy on strong ground and “sustainable” as Boulder’s options to grow become limited.

As Boulder told most larger manufacturing companies to locate elsewhere in the county, it’s own economy shifted more to services. But surprisingly, that doesn’t mean we haven’t created a lot of jobs.

ERA found that from 1994 to 1999, Boulder added 544 additional businesses and almost 7,500 more workers, ranking first in the county in new employment and second in business formation. That’s still a slowdown from 1988 to 1994, when the city’s business and employment rate grew three times faster.

In 1999, Boulder’s average wage was $39,072, actually less than average wages now in Louisville/Superior and Broomfield. From 1994 to 1999, Boulder’s average wage grew 20.5 percent. An impressive figure, ERA says, since from 1988 to 1994 wages remained stagnant, growing just 0.2 percent, adjusted for inflation.

While Boulder prides itself as a haven for entrepreneurs and start-ups, higher housing prices and commercial office costs may be sending start-ups elsewhere. Most growth here from 1994 to 1999 came at mid-sized companies (20-99 employees) and firms hiring between 100 and 499. Only 12 percent of employment growth in this period is attributed to firms hiring 19 or fewer workers.

Office space demand remains high in Boulder, ERA found. As of the second quarter of 2000, Boulder still had a 64 percent of the county’s office stock of 13.6 million feet, with some 8.7 million square feet in the city, mostly in the East Boulder market. With 9.1 million square feet of industrial space, Boulder has a 39 percent share of the county’s total, with a lower vacancy rate (9.3 percent) than the rest of the county (17.7 percent.)

Now city officials and economic leaders need to make sense of these numbers, especially as the clock ticks on a redevelopment plan for the Crossroads Mall site.

No one expects Boulder to backtrack on its slow-growth mantra.

ERA, however, concludes that the city can still grow economically and fiscally “by supporting high value-added industries and sectors, and accommodating firms that service regional industries and the international economy.”