Loveland extends incentives to Hensel Phelps

Editor’s note: Information about an incentive agreement between Hensel Phelps and Larimer County was incorrect in the original report. Evan Wendlandt, associate director of economic development for Larimer County, said that the county is considering a $189,000 personal property tax exemption but it has yet to be approved by the Board of County Commissioners.

LOVELAND — Loveland will extend a $1.5 million incentive to global general contractor Hensel Phelps Construction Co. to move its headquarters from Greeley to Loveland, even though the company appears to have already decided, incentives or not, to move to the community.

Hensel Phelps, which since 1937 has maintained its headquarters in the same location in Greeley, has conducted a nationwide search for a new headquarters location. It has settled on Loveland and, specifically, the Centerra South urban-renewal area, where it will be a catalyst project for the development.

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Hensel Phelps, a primary employer in that its business brings dollars into the community, would employ as many as 400 people paying wages higher than the average Loveland wage.

As one of the largest general contractors in the country, it would be among Loveland’s largest employers, according to a presentation Tuesday night from the city Economic Development Department.

“This would be one of the largest primary employment opportunities we’ve had in years,” said Allison Bohling, who leads the business-attraction team for the city.

Hensel Phelps plans to build a 100,000-square-foot office building that would be four or five stories in height. The all-in construction cost would be $69 million.

The company has already been approved for a $4.8 million incentive from the state of Colorado, and Larimer County is considering a $189,000 rebate of personal property taxes.

Bohling said the incentive — $1 million in fee waivers and $500,000 in direct cash payments based upon employment numbers — would provide $2.17 million in direct economic benefits over 10 years and indirect benefits of $100 million over 10 years. The indirect benefits include families moving to Loveland, buying homes and shopping in the community, in addition to supply-chain partners choosing to relocate to Loveland to be near the Hensel Phelps HQ.

“This is a high rate of return,” Bohling said.

In answer to a question from the council, Bohling said that between 2021 and 2023, 95 projects were considered by the Economic Development Department and eight resulted in incentives totaling $642,000. The return on that investment was $37.5 million, or a return of $58.50 for every $1 of investment.

Laird Heikens, vice president of real estate for Hensel Phelps, when asked whether the incentive proposal was critical to the company’s decision to locate in the city, said it probably was not. 

“We’ve been looking for several years, all over the country and in different areas of Colorado, and the pin dropped here in Centerra South,” Heikens said.

All members of the council were supportive of having the company relocate to the city, but three opposed the incentive proposal.

Council member Troy Krenning said he would support the fee waivers but not the $500,000 cash payment tied to employee numbers. Erin Black’s position differed, in that she supported the employee payment but not the fee waivers. Mayor Jacki Marsh opposed the incentives at the level proposed and suggested that Economic Development return with a plan for about $800,000, which would be similar in dollars to what the city extended to Bass Pro Shops.

The other six council members did support the incentive proposal because of the potential return on investment.

Council member Dana Foley, referring to the city general fund shortfall that resulted from elimination of sales taxes on food, said “the $100 million in indirect benefits to the city is exactly what is needed to replenish the general fund.”

The council voted 6-3 to support the incentives.