20th Anniversary: US West tech center marked return to optimism

EDITOR’S NOTE: As The Boulder County Business Report celebrates its 20th anniversary in 2001, each issue will take a look back at major business events of the past 20 years. Each of these stories will be reprinted in a special Business Report 20th Anniversary issue in November.

By Nancy Nachman-Hunt

Business Report Correspondent

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BOULDER — If there was one year in the late 1980s when optimism replaced pessimism as the pervasive business sentiment in Boulder County, that year might well have been 1987.

In June, after laying off more than 3,000 workers during the previous two and one-half years, data storage device maker Storage Technology Corp. of Louisville completed its arduous climb out of Chapter 11 bankruptcy. It handed over more than $1 billion to its creditors and in July celebrated with a monster bash for its remaining 4,000 employees.

In November, former Copper Mountain ski resort Chief Executive Officer Andy Daly reopened Eldora ski area, which had closed operations in 1986 after a failed bid by West Coast promo man O.Z. Minkin to buy the resort from the Ertl family for $5 million. (Minkin later was convicted in Los Angeles of conspiracy and wire fraud, according to Boulder’s Daily Camera.)

Then, in December, the economic development coup of the decade occurred in Boulder. Denver-based Baby Bell U S West, now Qwest Communications, announced it would build its advanced technology center in the University of Colorado Research Park.

U S West had been housing its advanced technology unit in Englewood, and it was outgrowing its quarters there. A new facility would have to be built to house what the company at the time thought would be close to 1,500 workers. So the telecommunications giant decided it would open the bidding for the honor of acquiring the new digs to all 14 states in its service area.

It was an economic developer’s dream project: clean, high-paying jobs on the cutting edge of telecommunications technology development. Cities from Minneapolis to Tucson, Ariz., to Seattle were courting U S West.

After thousands of air miles logged and much discussion, U S West decided to stay in Colorado, focusing its search on the Front Range. At the time, almost all Front Range cities of any kind had economic development arms. Longmont and Colorado Springs, especially, were aggressively recruiting companies. Boulder, on the other hand, had decided it was a place primarily for homegrown companies. Not much outside recruiting was going on, despite the tough economic times.

But when U S West hinted it might be interested in Boulder, largely because it was home to CU and its accompanying brain trust, city government, the business community and the university community decided it was worth at least one good shot to land the facility.

“When U S West came to see us, everybody thought it was a really good fit. There was a common degree of interest in (U S West) as an enterprise that reached across all the community’s boundaries,” recalls Vectra Bank Colorado Chief Executive Bruce Alexander. In 1987, Alexander was an officer at First National Bank of Boulder and a member of the task force assembled to recruit the company to Boulder.

Initially, U S West said it needed 100 acres to build a 500,000-square-foot, $50 million building, and Boulder was pushing several sites that could handle that large a facility. The former Beech Aircraft site north of the city along U.S. 36 and some 320 acres south and west of the U.S. 36 and Table Mesa Road interchange owned by Flatirons Sand Gravel garnered the most attention. Interestingly, the Table Mesa location is the site CU now envisions as its south campus. At less than 100 developable acres, CU’s newly minted research park wasn’t even on the list of possible sites. It was too small, and it had no infrastructure in place.

Then came the U.S. District Court decision that changed the scope of the project. The mother of all Baby Bells, AT&T, requested that the court restrict her offspring from designing hardware and some software, because it might produce technologies that could then be manufactured by companies other than AT&T. The court agreed and, as soon as it did, U.S. West’s Olympian complex was reduced to less than half its anticipated size.

It was after the court decision that the pivotal phone call came resulting in U S West’s nod to CU’s research park. “The story as I heard it was that Jack McCallister, chairman of U S West, called (CU President) Gordon Gee and said, ?We’re looking at a bunch of sites in Colorado. Why isn’t CU in any of these proposals?'” recalls former CU Chancellor of Administration Stuart Takeuchi, who is now retired and a private management consultant.

“And Gordon says, ?Well, you guys want 100 acres, and that’s our whole research park, and we don’t want to do that.’ So McAllister says, ?OK, how about 35 acres.’ Then Gordon says, ?We can do that.’ Three weeks later, we had a letter of intent for what turned out to be 28 acres with a right of first refusal on 14 more,” Takeuchi says.

On Dec. 10, 1987, the announcement was made. The headlines in the daily papers were enormous. “U S West Picks Boulder.” Hugs and kisses all around.

After torturous negotiations that took more than 20 months, U S West signed a 40-year lease with CU, with renewals up to 99 years, for a 289,000-square-foot, $42 million facility to be named the Jack McAllister Advanced Technology Center.

Instead of 1,500 jobs coming to Boulder, there would be 450, U S West said. But there would be more jobs coming, and eventually the full complement of 1,500 would be reached. Employment did, indeed, go up. In 1991, when the McAllister center finally opened, the facility housed about 600.

But that was then. Today U S West is Qwest, and there no longer is such an entity as Advanced Technologies. It was disbanded at the end of 2000. There are only 100 Qwest employees working in the McAllister center, and none of them are working on new research, says Edie Ortega, district manager for Qwest in northern Colorado. A few of the 100 also work in Qwest’s Human Factors lab at the center.

The space that was to house U S West employees exclusively is now subleased to other high-tech tenants. And the McAllister center is no longer owned by Qwest. Since late 1991, it has been owned by the real estate development arm of Phillip Morris.

As for CU’s Research Park, depending on whom you ask, it’s either on schedule with its 20-year build-out, or it’s a major disappointment. Since garnering U S West, the only major private sector high-tech facility it has attracted is Sybase.

But that’s not a problem, says Jeff Lipton, executive director of facilities management at CU. The park doesn’t have to aggressively market itself because it’s debt-free. The sale of the McAllister center to Phillip Morris allowed the park to pay back its development loan from CU.

Some, including former Boulder Chamber of Commerce President Denis Nock, believe the university may have forgotten its original vision for the park — to house companies with current or potential research links to the university. “I’d put it under the label of a major missed opportunity,” Nock says.

Others, however, say the important thing about the development of the research park and its subsequent garnering of U S West Advanced Technologies, is that it brought the community together in one effort during perilous times.

“Remember the time,” Alexander says. “The city and the university were struggling. The strategic partnership created between the university and the private sector was a win.”

On that point, Nock agrees. “That,” he says, “was the great memory for me.”