Denver-based Forest Oil Corp. will not take advantage of a rare tax incentive extended by the city that was pegged to job creation.
In August, Mayor John Hickenlooper offered the energy company with a stock value of $2.9 billion up to $450,000 in tax rebates to create 385 new jobs over five years with an average salary of $85,000.
“It’s part of our plan to retain good-paying jobs,” Mary Buckley, the city’s director of business development, said at the time. The mayor has set a goal of creating 25,000 new private-sector jobs by 2007.
On Sept. 12, however, Forest Oil announced plans to spin off its offshore Gulf of Mexico operation to shareholders and sell the newly formed company. Given the change, the company asked the city to withdraw its incentive offer because it would not create the expected jobs here in the near future.
Forest Oil, which will maintain its Denver headquarters, employs 265 people in Denver.
Forest Oil declined to comment Thursday.
Two Colorado companies have taken the city up on its tax-incentives-for-jobs offers, including global real-estate company ProLogis and PostNet International Franchise Corp.
The fourth, and largest, proposed tax-incentive package is drawing fire from a competitor and a City Council member.
Exclusive Resorts LLC, a Denver-based luxury vacation- home club, is seeking incentives to keep it from relocating to suburban Washington, D.C.
America Online founder Steve Case owns 80 percent of the company.
The proposed agreement calls for up to $700,000 in tax rebates for the creation of 350 new jobs over five years. The average salary is expected to be $80,000.
“For Exclusive Resorts to hold the city hostage for tax breaks to keep their jobs in Denver is so far over the top, it’s simply a signal of excess,” said Richard Keith, president of Fort Collins-based Private Escapes Destination Clubs, a competitor.
“I’m very wary of all incentive packages because I believe in a level playing field for all businesses,” said City Councilwoman Jeanne Faatz. “I’m not sure the average taxpayer would be pleased to subsidize this wealthy company that is owned by the founder of AOL and offers a product that they’ll never be able to afford.”
No date has been set for a City Council vote.
If approved, Exclusive Resorts, which employs 190 people, will receive a matching $700,000 incentive package from the state, Buckley said.
Founded in 2002, Exclusive Resorts is the largest player in the booming luxury destination-club segment.
With more than 1,600 members, it owns 245 luxury homes and has real-estate assets totalling $750 million.
“They’re the leader in a brand-new, growing industry,” Buckley said. “We see the opportunity for Denver to be a hub for this new industry.”
Staff writer Julie Dunn can be reached at 303-820-1592 or jdunn@denverpost.com.
