Pool of engineers makes Longmont appealing to data storage firms

LONGMONT — Nearly one-third of the 35 data storage companies in Boulder and Broomfield counties are based or housed in Longmont. With University of Colorado’s renowned engineering school, inexpensive building prices and a qualified hiring pool at their fingertips, data storage technology companies are increasingly setting their sights in Longmont.

Lots Technology Inc. was formed in 1993 in California to develop optical tape drives for the U.S. government. In October 2001 it moved into the commercial marketplace — and to Longmont.

“This valley is where all the tape people are,´ said President and Chief Operations Officer Ray Falce. Lots Technology started with three people and has expanded to 34 employees in fewer than six months. Falce found his hires by recruiting locally. He anticipates adding an additional 50 to 60 employees by year end. Approximately 40 of these will be engineers.

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Falce had been the executive vice president and general manager of Fujitsu Computer Products of America Inc.’s Intellistor research and development operations. After Fujitsu shut down the operation in February 2001, Falce leased its 30,000-square-foot building on South Fordham Street in Longmont for Lots Technology.

The digital optical tape drive development company has been working off venture capital money from four major venture capital firms led by Edelson Technology Partners in New Jersey. In mid-March, Falce visited venture capital groups nationwide in search of three or four investors to fund a laser optical tape drive. Falce is asking for between $16 million and $20 million so that Lots Technology could manufacture it locally. Negotiations should be completed in mid-April.

Falce is confident his company will soon have revenues to report. “The talent is here, and the people are here for us to succeed,” he said.

Longmont start-up CreekPath Systems Inc. develops software solutions for process driven storage management. The data-storage company opened in January 2000. Twenty-eight of its 38 employees are engineers, and all were plucked from the local area.

Seagate Technology LLC has deep roots in Longmont. In 1985, Codatamemory was founded. After several mergers, that company become Seagate. In 1995, Seagate acquired another Longmont storage company, Conner Peripherals. Now Seagate has 1,110 employees, more than half of whom are in Longmont. About 44 percent of all Seagate employees are engineers.

Now headquartered in Scotts Valley, Calif., Seagate logged $6.38 billion in revenues in 2001.

Until September1999, Seagate had been renting nine small buildings belonging to Pratt Management Co.. In Sept. 2000, it moved to a new 450,000-square-foot building on a 20-acre site. The company owns an additional 20 acres in Longmont.

“Growth policies vary from town to town, and our size facility would not have been allowed in Boulder,´ said Cindy LaRocque, Seagate corporate communications manager.

But being near Boulder does have its rewards.

In April 2001, U.S. News & World Report ranked the University of Colorado’s engineering school 34th out of more than 300 such schools in the nation. Last academic year alone, July 2000 through June 2001, CU’s engineering school graduated approximately 150 electrical and computer engineers.

Rengeng Su has been the school’s chairman of electrical and computer engineering since 1997. He is also founder and director of the Colorado Center for Information Storage, formed in 1998. The center serves the entire Front Range, including Longmont, Boulder and Loveland.

“Without the Longmont storage companies, the center would not have been started,” he said. Su added that approximately two-thirds of students seeking data storage company internships do them in Longmont. Some students get hired at their internship sites and move to Longmont.

Su said many of the Longmont data-storage companies have plenty of internship opportunities. For example, this summer, Maxtor Corp. is seeking between 12 and 14 interns.

Su said Longmont has two advantages that draw data storage companies and, consequently, qualified engineers. The first advantage is people. Initially, some data storage companies moved into the area, then others followed suit, drawn by the potential hiring pool.

The second advantage is land.

Prudential LTM commercial broker Ken Kanemoto said industrial land values in Longmont are between $3 and $5 per square foot. Industrial flex space lease rates in the city of Longmont run between $9 and $12 per square foot.

Paula Dallabetta, CreekPath Systems’ director of marketing, said the company’s Longmont commercial lease was approximately one-third what it would have paid had they chosen Interlocken business park in Broomfield.

Tax incentives might also sweeten the pot for any advanced technology company considering a move to Longmont, said John Cody, president of the Longmont Area Economic Council.

“Longmont is the only community I know of along the Front Range that provides a two-year moratorium on sales and use taxes for research and development equipment,” he said. “There is also no sales and use tax on manufacturing equipment in Longmont.”Contact Sheryl Bass at (303) 440-4950 or e-mail [email protected].