Squaring off for economic development

Larimer and Weld counties compete for development

The dance is a familiar one. The steps are well-rehearsed.

And as Northern Colorado’s top business boosters look ahead to the remaining months of 2001, their annual eco-devo trot seems to be predictably in line.

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All the normal pieces are there, both good and bad. Weighty state tax burdens and an ever-present labor squeeze continue to tame the region’s economic inertia, while a healthy infrastructure and a replenishing labor supply from four major universities still add fuel.

It’s a dance that everyone has done before. But this time around a few rules have changed. Most significantly the region’s most conspicuous cast members have joined hands on both sides of the Larimer-Weld county line.

In Weld County, where retail sales-tax dollars tend to leak westward up the Poudre River to Fort Collins and down U.S. Highway 34 to Loveland, the Greeley/Weld Economic Development Action Partnership has joined forces with local chambers of commerce. The coalition aims to spark retail growth and churn tax revenues, said Lucille Mantelli, previous EDAP chairwoman.

For Larimer County — a land of different, anti-growth priorities — the team building has been even more ambitious, linking Loveland and Fort Collins in a sprawling economic-development chorus line dubbed the Northern Colorado Economic Development Corp.

But the county line is also a battle line, of sorts, with the economic-development entities on either side set to wage war for business development.

Former Fort Collins Economic Development Corp. front man Roland Mower in December paired with Loveland EDC top gun Carol Garton to form the new team that makes its home in the Centerra complex in east Loveland. The NCEDC is poised to offer a “one-stop shopping spot for everyone’s economic-development needs in the Northern Colorado region,´ said board chairman Tim Dow, a Fort Collins lawyer.

With its focus trained primarily on developing existing industry and incubating homegrown startups, the new two-in-one approach should bolster regional retention efforts, Dow said.

“We can now work with local companies to identify more comprehensive options within the region,´ said Mower, the corporation’s CEO. “And we’re really excited about what that means. In the past we each knew our individual towns very well and the rest of the area somewhat, but now we can really work cohesively along the corridor.”

It’s simply a matter of efficiency, Mower said. For the past several years he and Garton have been walking parallel walks in a loosely competitive regional race. But with the partnership the two can “stretch the responsibilities and get involved in a lot of different projects that we couldn’t do before,” he said.

While the lineups have changed, however, past priorities endure. In rural Weld County, 2001 presents a new opportunity to recruit stable industry, build an attractive labor force and entice retail muscle, EDAP President Ron Klaphake said.

About 15 miles west, across the prairie in Larimer County, the story is different. There, retention is paramount, and when Mower talks priorities he uses words like “incubation,” “expansion” and “consolidation.”

But on both sides of the county line the sagging national economy is muddying the waters. And while Mower says, “there haven’t been any significant layoffs yet,” he admits that “there could be if the economy continues to get worse.

“The market may be going down,” he said. “But the economy is stable locally. The biggest impact we’re seeing is a more conservative approach by investors and consumers.”

So for now the economic landscape along the Front Range seems to be holding its girth. But Weld County is already dealing with its first taste of high-tech tremors. And when Hewlett-Packard Co. begins to funnel employees out of its 350,000-square-foot facility on 10th Street in west Greeley to fuel its consolidation plans, it will leave a sizeable economic blight on the county, Klaphake said.

“Our primary goal right now is making sure we find someone to take on the H-P property,” he said.

Beyond H-P, though, technology has never been Weld County’s forte. This year the 4,004-square-mile county is embarking on a target-industry study to explore future options, but for now the target is simple: “Manufacturing is really what we need to attract,” Mantelli said. “High tech seems to come and go, but manufacturing provides a lot of jobs and it’s stable.”

Over the past year, Greeley/Weld has scored major development victories with the erection of the Promontory business park, which will soon house State Farm’s 450,000- square-foot state headquarters and Con Agra Beef Co.’s 115,000-square-foot national headquarters.

Southern Weld County, too, has grown, sprouting houses like crab grass — Erie’s population boomed by 400 percent in the ’90s — and blossoming with retail and industry, too, which it absorbed from overflowing north Denver and Boulder County.

Still, manufacturing dollars remain mostly elusive.

The reasons behind the struggle are varied, but two problems — Colorado tax structure and bedrock-low unemployment — shine brightest.

“It’s hard for us to compete nationally for manufacturing investment because Colorado levies a heavy tax on capital-intensive industry,” Klaphake said.

“If a company is looking to expand and become really competitive, the tax structure is a real limiting factor,” Mantelli said. “Many states don’t even have that tax.”

The state legislature is currently considering several bills that could provide moderate relief to capital-heavy companies, Mower said. But neither he nor Klaphake anticipates any major reform in the near future.

Beyond tax structure, a historically lean local labor force hinders development efforts in both counties. In Weld, where unemployment dipped to 2.7 percent in December, the circumscribed skilled work force discourages potential investors who come looking to develop a strong regional employee base. Those companies turn instead to places like Pueblo or Ogden, Utah.

In Larimer County, the thin employee pool trips up expansion efforts, a tendency that could send existing companies looking elsewhere to Austin, Texas, or Portland, Ore., Mower said. The region hasn’t seen any big losses in recent years, though. And the NCEDC isn’t in the recruiting business anymore.

The benefits offset the drawbacks, Dow said. With four major universities within a two-hour radius, the labor force remains fresh and well-educated.

“We’re focused completely on retention and expansion issues right now,” he said.

For now, NCEDC will be working with H-P to streamline its consolidation; and it will be aiding Anheuser Busch in its expansion. With a looming economic slowdown on the horizon, priority projects take center stage.

“We’re really focusing on the projects that are occurring currently because of a regional strategic need,” he said. “In a strong economy companies are growing like mad. Those projects are probably going to be held back on now. We’re focusing on what needs to happen now.”