New Denver Mayor’s top task will be to aid failing economy

The next mayor of Denver will inherit a struggling economy that for two years has failed to create jobs, squeezed shopping budgets, attracted fewer visitors and pushed some longtime residents out of their homes.

By Mark P. Couch, Denver Post Business Writer

The sharp change of fortune caught many civic leaders by surprise, and now Denver’s next mayor will face the challenge of pulling the city out of its worst slump in more than a decade.

"Growth was the real issue for so long that people are now just starting to realize how tough it is to make an economy grow," said Tim Sheesley, corporate economist for Xcel Energy in Denver.

"Back in the ’90s, it was really easy to get a job," Sheesley said. "The roads were always full. The schools were always full. The stores were always full."

At that time, the public debate tilted to controlling how and where growth happened. Leaders wanted to protect open space, reduce commute times and cut pollution.

Now, city leaders have a different set of problems: helping unemployed people find jobs, nurturing small businesses and recruiting large companies that can fill empty office space.

And many jobless people need help sooner rather than later.

Simone Charles, 36, received an eviction notice in late March and must vacate her Bonnie Brae apartment by today.

A military veteran who served as a submarine tender in the Navy during the 1991 Persian Gulf War, Charles has lived in Denver for 10 years and has been an office manager and a saleswoman calling on corporate accounts.

She lost her office-manager job late last year – "on Dec. 7, Pearl Harbor day," she said, and she has been hunting for work ever since. She’s looking for a job as a fundraiser or manager for nonprofit groups serving foster children.

Charles is in line with thousands of other Denver residents looking for work.

The city’s job base has been shrinking rapidly. Metro Denver has about 60,000 fewer jobs than it did two years ago. For 18 consecutive months, the city has had fewer jobs than it had during the same month the previous year.

Charles said she could soon be living in her car with her cat and showering at a friend’s house. She said she’s reluctant to move into her friend’s house because the friend recently got married. She doubts she can find temporary housing in a shelter.

"There isn’t a safety net for people like me," Charles said. "You have to fall. You can’t almost be falling."

The safety net started to shred when the Rocky Mountain job machine stalled in 2001.

Colorado companies were swamped by a national recession and an anemic recovery. Since then, the local economy has been battered by war jitters and terrorism fears, by drought and record-breaking forest fires.

But some of the area’s economic wounds were self-inflicted.

Aggressive telecommunications companies buried a glut of fiber-optic cables before customer demand appeared. To make matters worse, some companies then turned to creative accounting to hide their mistakes.

High-tech fever ran a mile high as metro leaders and landlords focused on chasing technology companies at the expense of the traditional strongholds of oil and gas, financial services and cable. Denver and the surrounding region diversified itself into a dependence on tech-company growth.

City leaders let a single airline dominate its airport and now that airline teeters on the verge of extinction.

The big economic picture in Denver yields thousands of snapshots of struggling residents.

Marianne Orkin, a headhunter who was laid off from her job at a personnel service this year, said the market is much tougher for job candidates now.

"You really have to be on the other side to realize how bad it is," Orkin said. "If you’re out there, you know companies are laying off more people than they are hiring."

One of Orkin’s former clients, a woman who was a project manager for AT&T Broadband making between $80,000 and $100,000 per year, insisted on applying for a receptionist job that paid $35,000 per year.

"She said, ‘I’m just desperate, and I’m tired of looking,"’ Orkin said.

So, now what? What can a new mayor do to get the economy revving again?

First and foremost, the mayor is the messenger and needs to actively promote the city, said the region’s top economic-development experts.

"Nothing, nothing says more than a mayor marketing a city," said Anne Warhover, president of the Downtown Denver Partnership.

Warhover and other economic-development officials recommended that the new mayor immediately convene meetings with top business leaders, with elected leaders in neighboring communities and with Gov. Bill Owens and his staff.

Tom Clark, who heads the Metro Denver Network, the division of the Denver Metro Chamber of Commerce that recruits and retains jobs in the city, also wants the mayor to organize trips to meet with reporters and editors at "gatekeeper" media, such as national newspapers and networks.

But before the new Denver mayor heads out to tout the Mile High City, he or she should tweak the city’s message, said private site-selection experts who offered their advice during a forum with Denver civic leaders in late March.

Denver should shed the it’s-a-nice-place-to-live line and start explaining why the area is a good place to do business.

"The message that you have good quality of life is already out there," said Bob Pittman, an economic-development expert with Lockwood Greene Consulting of Spartanburg, S.C. "The message that you need to get out is that you have a good, strong business environment."

The quality-of-life message didn’t work with Boeing Co. executives in 2001 when the jet maker chose Chicago over Denver for its new headquarters office, and it won’t work now. Corporate executives are deaf to the quality-of-life message when times are tough, officials said.

And Denver can’t compete in the big-money sweepstakes when other cities dole out multimillion tax breaks and incentives – another lesson from the Boeing chase in the spring of 2001. Chicago offered incentives worth as much as $63 million, more than twice as much as the Denver package.

To ensure that Denver’s business environment remains healthy, the city needs to make major investments in itself, Clark said.

Snarled traffic on packed roads and city schools that lag suburban counterparts in quality of education are two key issues with long-term economic consequences for the city.

Clark said the mayor of Denver should take a strong leadership role in pushing for better roads and light-rail connections throughout the metro area.

The $1.7 billion T-REX project that widens Interstate 25 and adds a light-rail line to the southeast is a good start, but more should be expected.

"Since all roads lead to Denver, the mayor is in a unique position to be a spokesperson for the issue," Clark said. "The mayor can be the arbiter of the disputes."

The city should also provide direct financial assistance to targeted schools – offering funding to schools in certain neighborhoods to reduce class sizes and recruit experienced teachers, Clark said.

Jerry Wartgow, superintendent of the Denver Public Schools, endorsed the idea as a way to expand the links that already exist between the city and the school system.

Investments in schools and roads are expensive, but they promote the long-term health of the community, Clark said.

Big incentives and big investments are out of reach for most elected officials in Colorado coping with shrinking budgets and tight spending limits, said Xcel’s Sheesley.

Instead, politicians should focus on making the business environment better.

"The city should get rid of the antiquated parts of its tax and regulatory system," Clark said.

For example, Denver should adopt building-code standards recommended by the Building Owners and Managers Association, Clark said.

Other metro cities accept those standards, but Denver sticks with its own system, which makes construction in the city more complicated and expensive than in the suburbs, Clark said.

"That makes it more difficult to get through the process in Denver," Clark said.

For consumers, the mayor should reconsider the cost of parking downtown. High meter rates discourage some visitors, especially important when restaurants and shops are weaker because of reduced spending.

"The … parking rates are leading people to make alternative choices," Clark said. "People are making choices based on what it costs to go downtown."

Holding meetings and tweaking rules won’t pull Denver out of the economic doldrums, especially when most of the rest of the nation is mired in a sluggish recovery, said Richard Wobbekind, director of the business research division at the University of Colorado at Boulder.

"You still have to figure out ways to get out of the slump," Wobbekind said, "but it puts out a sign that Denver is open for business."

The mayor should take that message to the world, recommended Edvard Hag, director of the Rocky Mountain Trade Adjustment Assistance Center. International trade missions protect jobs in Denver by boosting sales at local companies.

Another way to help small companies would be to create an advisory panel that would walk the owners of startup and small businesses through the maze of City Hall rules and to the paths of prosperity.

Joe Snell, former head of the Metro Denver Network, proposed the idea and even crafted a name for the panel: "Sound Advice."

Snell, a fourth-generation Coloradan, said he’s looking for another job because his current employer, the Growth Capital Alliance, an association of venture capital firms, wanted him to move out of state.

For some residents, reviving the economy may come too late. The falling standard of living is causing some Denver transplants to dream of leaving – a sentiment rarely heard during the heady 1990s.

Chris Warren, 38, used to make more than $100,000 per year as a salesman for a now-defunct high-tech company. For more than a year, he has searched for a comparable job with little success.

Last Christmas, he took a temporary job with starting pay of $11 per hour, no health-insurance benefits, no sick days and no retirement-savings account.

"I found part-time work at the post office," Warren said. "I scrub toilet bowls and empty the trash."

Warren says he completes the tasks that full-time unionized postal workers refuse to do. He rarely gets a day off.

To pay his bills, Warren sold a five-bedroom house in California, where he lived before moving to Denver. He now lives in a one-bedroom apartment with a friend.

"If she didn’t have a decent job, I would be on the street," he said.

Warren doubts he will ever find another high-paying, high-tech job in Denver.

"Denver touted itself as a high-tech center, but everybody and their brother who was in the business has moved out of here," Warren said. "Now, it’s nothing more than a cow-punk town, which is all it ever was. There’s very little high-tech here. I’m going to leave as soon as I have enough money."

Others, like Charles, hope to stay and are looking beyond the new mayor for help.

"I’m going to pray a lot," Charles said.

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