Upstate initiative encompasses county

GREELEY – While most economic development organizations are struggling to adjust to budget constrictions, Upstate Colorado has successfully launched a major campaign that for the first time encompasses all of Weld County.

Upstate’s OpportunityNow initiative seeks to create 5,000 primary jobs and $1.7 billion in new wealth in five years. It will also create the Upstate Leadership Council and maintain a council of business leaders to carry out special projects. The group – made up of investors at the $10,000-plus level – will be charged with managing a $200,000 annual seed fund.

The campaign was kicked off silently in February and unveiled in October, but its origins date back more than a year, when Upstate tapped consulting firm R&M Resource Development to conduct a feasibility study. The study, which included extensive interviews with business and community leaders throughout the county, was completed before the total financial meltdown in the fall of 2008.

“I’ve always been cautiously optimistic,´ said John DeWitt, broker with ReMax Alliance of Greeley and chairman of the Upstate board. “There was a time about seven to eight months ago where we questioned what direction to go.”

Despite the obvious economic challenges, the board decided to forge ahead. The goal was to secure five-year commitments from companies at the leadership level ($10,000-plus); the investor level ($5,000 to $9,999); the supporter level ($1,000 to $4,999); or the contributor level ($200 to $999).

“There’s a little bit of swagger to it,” DeWitt said. “This is the first time an organization such as Upstate could get all the municipalities and businesses in Weld County to come to the table.”

Before launching OpportunityNow, Upstate had only three investors at the $10,000-plus level, and two of those were public partners. The number is now nearing 40. In all, the organization has boosted the number of investors from 133 last year to 142 now.

One benefit of the campaign has been to swing the majority of investor support from the public side to the private side. Before the campaign, support was about 55 percent public and 45 percent private.

“That’s flip-flopped now,´ said Larry Burkhardt, president and CEO of Upstate.

The additional funding will allow Upstate to expand its focus both geographically and fundamentally. Of the total 5,000-job goal, 3,000 are slated to come from existing businesses in Weld County. Burkhardt said the hope is that the campaign will allow Upstate to add to its staff, primarily to better retain and attract businesses.

“We’ve not been able to do this in the past,” he said.

The campaign also calls for the continuation of sub-area work throughout the county. Earlier this year, Upstate launched the Southwest Weld Initiative and Burkhardt said there will be similar programs for other parts of the county. Upstate is currently working with the Interstate 76 corridor communities of Lochbuie, Hudson and Keenesburg.

Taking risk in awful economy

Upstate’s ability to not only attract new investors, but also increase commitments from existing investors is out of the norm, according to Jeff Finkle, president and CEO of the International Economic Development Council.

“The economy is awful,” he said. “It’s been a really tough marketplace.”

Finkle is hearing from economic development agencies around the country that investors are pulling back in every way, shape and form. He plans to conduct a survey in December to gauge just how hard budgets have been hit.

Finkle cites three reasons that could attribute to Upstate’s unusual success:

n The economic development organization is well thought of in the community;

n The local economy is faring better than the rest of the nation;

n The community decided that economic development is a countercyclical activity that requires investing in a downturn.

Tom Rieger, principal at R&M Resource, has an explanation: “The reason they’ve been so successful while other economic development organizations are hurting is that they took the risk (to move forward).”

While launching such a campaign during an economic downturn is certainly a risk, Upstate’s strategic model is not.

“The seed money idea with the leadership council is an effective tool,” Rieger said.

He explained that the leadership council model was created in the 1980s, when the Denver Metro Chamber of Commerce used it to create the Greater Denver Corp. The group was largely responsible for starting the ball rolling on Denver International Airport with the resources of a seed fund. A seed fund was also used as a guarantee for unfilled seats to land Lufthansa German Airlines for the airport.

The main benefit of the strategy is that an organization has money set aside that can be leveraged quickly for a project, or several. It has become more popular over the past five years, as the ability to move quickly becomes more important in an increasing competitive environment.

Because of the competitive environment, Finkle estimates that it won’t be too long before there is a turnaround.

“We would anticipate that starting soon a lot of community leaders and businesses will decide that economic development activities need some attention,” he said. “Right now is when agencies should be spending a lot of money on economic development activities. In good times, they should be spending less.”

NCEDC doing with less

Spending less is an unfortunate reality for many eco-devo agencies right now, including the Northern Colorado Economic Development Corp. Earlier this year, the organization went through a major restructuring that depleted its staff from six to three, and it is operating on about 70 percent of last year’s budget.

Even with fewer resources, NCEDC is not seeing a slowdown in work. Vice President Mike Masciola said that the organization has garnered almost 60 leads so far this year, on track to meet or exceed last year’s activities. Additionally, NCEDC is currently working with 31 companies in Larimer County that plan to expand their personnel, equipment and/or facilities during the next 18 months.

With fewer staff, NCEDC is focusing on job creation. Business attraction, retention and expansion take top billing, along with investor relations, while broader initiatives such as workforce development will require partnerships with other groups.

“It’s what our investors expected of us anyway,” Masciola said. “As a staff, our energy will go into job creation and we’ll be strategic partners on the broader issues.”

NCEDC is nearing the final year of its own five-year plan – Leadership 2010. The goal was to create 4,200 primary jobs by the end of next year. Masciola said that since the 2005 launch, 3,645 jobs have been announced, putting the campaign at 87 percent, and that the goal is attainable.

Despite the many announcements, Larimer County has seen a net loss of more than 5,000 jobs since February. Regional economist Martin Shields will discuss the broad economic impacts the losses have had in Northern Colorado during the NCEDC annual update luncheon on Nov. 19.

“If you want to be transparent and honest about what you do as an economic development organization, you have to talk about the down side, too,” Masciola said.

 That’s why, going forward, NCEDC will report on net job numbers, not just new job announcements.

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