BOULDER — Optimism laced with uncertainty might best describe how executives of companies in the Boulder Valley view the economy as they enter a new year with a new president.
“There is an incredible groundswell of business optimism,” economist Rich Wobbekind said on Wednesday at BizWest’s annual CEO Economic Roundtable.
But as newly elected President Donald Trump plans to make good on campaign promises to grow the economy and jobs by cutting taxes, easing regulations on businesses and setting better lending standards, Wobbekind said there is an element of uncertainty.
“Anecdotally, there is uncertainty in the health-care sector and government- research operations,” Wobbekind said. Despite that, the economist said Colorado “looks great.” He said the state is projected to be among the top five states, largely because of high tech, mobile app developers and cloud computing driven by new firm creation.
Robert Vissers, CEO of Boulder Community Health, said uncertainty surrounds the health-care industry as it waits to see if Trump’s administration will repeal and replace the Affordable Care Act, known as Obamacare, or if it will just tweak certain aspects of it.
“There hasn’t been any impact so far,” Vissers said, “because there have been no significant changes made to how business is being done. We don’t know if it will be repealed, replaced or repaired.
“There’s a lot of wait-and-see. … For the next year, I expect there will be a lot of holding back on large capital investment,” Vissers said. He’s waiting to see how changes would affect reimburses through Medicare, Medicaid and insurance companies. “We won’t see an impact until 2018 or 2020,” he said.
The hospital is in the process of moving its operations on the west side of Boulder to its Foothills campus on the east side. “From BCH’s standpoint, we are on financially good footing. We will be fine. I’m more concerned about rural hospitals. … We may be seeing smaller hospitals closing in one to three years.”
Trump’s promise to downsize government has workers at the 30-some federal laboratories in Colorado on edge.
“The angst is palpable,” said Dan Powers, executive director of Co-LABs, a nonprofit that represents the state’s federal labs. “Scientists are looking for job prospects elsewhere.”
Powers said he hopes Colorado’s politicians in Washington will be able to convince the new administration that the labs are not part of “government bloat,” but do meaningful work, provide high-paying jobs contributing to a vibrant state economy, and the research is a catalyst for launching private-sector companies.
The cost of housing is a real concern, Wobbekind said. “There are labor shortage concerns that will be affected by any new immigration policies.”
John Tayer, CEO of the Boulder Chamber, is championing efforts to address the challenges of housing in Boulder.
“We will be working to address the challenges through redevelopment of commercial areas into mixed-use projects that would include workforce housing,” he said.
Bruce Partain, president of the Longmont Chamber of Commerce, pointed out that Longmont, despite its increasing home prices, is still the most affordable within the region.
Partain said removing barriers to builders, especially reforming the state’s construction-defects law, could add to the housing supply. The defects-law has put a damper on builders constructing condominiums and townhomes because of group litigation against defects. Partain believes moving from litigation to remediation would clear a path for more construction. The state Legislature is revisiting the defects-law this year.
Kim Campbell, a Macerich Co. property manager that oversees FlatIron Crossing in Broomfield and the Twenty Ninth Street retail district in Boulder, believes retail is strong.
“She said both shopping malls are at 95 percent occupancy. “When a retailer vacates a space, another will quickly fill it,” said.
Twenty Ninth Street is also home to private businesses, with the Zayo Group recently expanding to 100,000 square feet there.
The tug-of-war between online sales and brick-and-mortar stores continues. Campbell said “people still get out and shop, whether it’s dining with friends, visiting Santa Claus, getting a cup of coffee or going to movies.”
She said Amazon, a large online retailer, has been opening stores and has been talking with Macerich about space.
Wobbekind said without consumer spending, “We would be in a world of hurt.” He said household debt is starting to creep up “but it is still less than it was in 2009.”
Kim Campbell, senior manager, property management, FlatIron Crossing and Twenty Ninth Street; Bruce Partain, CEO, Longmont Chamber of Commerce; Dan Powers, executive director, CO-LABS Inc. John Tayer, president and CEO, Boulder Chamber; Robert Vissers, CEO, Boulder Community Health; Rich Wobbekind, senior associate dean, Leeds School of Business, University of Colorado Boulder. Moderator: Christopher Wood, publisher/editor, BizWest Media LLC. Sponsors: Jim Cowgill and Jeremy Wilson, EKS&H; Jared Crain and Peter Schaub, Berg Hill Greenleaf & Ruscitti LLP.