Denver urged to sweeten pot for firms on the move

Expert: Quality of life not enough to pull in
businesses

Denver lags behind other cities in providing
incentives to attract and retain jobs, according to a report
presented Thursday to the Metro Denver Network.

By Mark P. Couch
Denver Post Business Writer

"You can’t just point at the mountains and say, "Isn’t that great,’ "
said Philip Schneider, a partner with Deloitte & Touche, a
consultant hired to give the Metro Denver Network advice on
economic development.

After all, Florida has the beach, California has sunshine, Chicago
has skyscrapers. Even Mississippi has a powerful selling point in
Sen. Trent Lott, a national figure whose political influence helps
attract companies to his state, Schneider said.

The quality-of-life sales pitch that has been the hallmark of
Denver’s job recruiters is not as persuasive as it used to be. In tough
economic times, corporate executives have an answer: Show us the
money.

Boeing Co.’s move from Seattle to Chicago proved the point that
incentives matter, Schneider said. Boeing also considered Dallas
and Denver, but opted for Chicago’s financial package worth as
much as $63 million. Denver’s best offer was $28 million, with
several strings attached.

Ron Bernstein, director of the Denver Office of Economic
Development and International Trade, said that recent meetings
with companies start with a similar question.

"They all want to know, "What are you putting on the table?’ "
Bernstein said during the Metro Denver Network’s meeting.

Denver and the state of Colorado offer fewer financial incentives
than their competitors in the West, across the country and around
the world, Schneider said. Some countries offer cash grants based
on the number of new jobs created. Other cities offer property-tax
abatement or income-tax credits.

To compete in the big leagues of economic recruitment, local
leaders should evaluate the incentive programs, Schneider said.
After all, some companies have employees dedicated solely to
reviewing tax breaks and other incentives, he said.

"Incentives carry this psychological weight beyond their value,"
Schneider said.

Joe Blake, president of the Denver Metro Chamber of Commerce,
said local leaders should not conclude that providing tax breaks,
grants, low-interest loans and other incentives is the answer to
economic growth.

"I don’t think we should just assume that you can buy your way into
progress," Blake said. "I don’t think our existing businesses are
going to want to see us unnecessarily or unreasonably spend
money to recruit other businesses."

Blake said the Denver area offers many assets – a highly educated
workforce, major universities, a growing labor pool – that appeal to
companies considering office locations.

Schneider was hired by the network, which is an economic
development group affiliated with the Denver Metro chamber, to
provide a snapshot of how Denver compares with other cities in
having attributes attractive to biotechnology and space-related
businesses.

Schneider considered the level of education, the size of the
workforce and the amount of venture-capital funding available to
companies.

In most cases, Denver compared favorably with its peer cities in
those categories but rarely outshone them. For example, one in
five Denver-area residents has a college degree. That puts Denver
in good company. San Francisco, Washington, New Jersey, and
Huntsville, Ala., boast similar numbers.

The high cost of housing in Denver and congested traffic could
make other cities more attractive, Schneider warned.

Schneider acknowledged that the survey didn’t consider certain
factors, such as the level of investment that could make the city
attractive to some companies. The $1.67 billion T-REX highway
widening and light-rail construction project and the development
of the University of Colorado’s bioscience campus at Fitzsimons are
two examples.

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