The Denver area’s corporate power base is shifting south, with the vast majority of Colorado’s biggest corporations choosing it over downtown Denver and other locations.
Of the state’s eight Fortune 500 companies, six are in the Interstate 25/southeast corridor, and five of those are in Douglas County. Just one is in downtown Denver, which has lost a handful of large headquarters in recent years, most notably Qwest. One company, Ball Corp., is based in the Boulder Turnpike/northwest corridor.
In a twist, downtown lured Colorado’s newest Fortune 500 company, DaVita, while the relatively young southeast corridor now hosts a cadre of homegrown businesses with deep roots in the state.
No one wants to criticize the competition — or even characterize themselves as rivals — but in their sales pitches, they subtly jab at the other.
“We’re very blessed,” said Lynn Myers, chief of staff and head of economic development for the South East Business Partnership. “We have the total package: great office space, a talented workforce, plenty of parking, great transportation, strong leadership and terrific school systems.”
Lease rates are lower in the southeast than downtown, and then there’s what economists call the “network effect.” Simply put, members of a group want to be together.
“There’s a certain synergy that develops among the higher-level executives that this is a good place to be,” Myers said.
As for downtown, backers say the loss of several high-profile headquarters hurts but doesn’t diminish the central business district’s growing appeal.
“What we’re seeing and hearing is that downtown locations, nationally, are becoming more and more desirable. They do tend to have the greatest concentration of amenities and transit options,” said Jim Kirchheimer, senior director of economic development for the Downtown Denver Partnership. “Downtown Denver has all of those pluses in spades. We’ve got a concentration of sports facilities, restaurants and recreation attractions. It’s a pretty unique combination of benefits we have to offer.”
Downtown lost two Fortune 500 headquarters in 2008.
Molson Coors Brewing Co. dropped off the list when it merged its U.S. brewing operations with SABMiller to create MillerCoors. Although MillerCoors is based in Chicago, Molson Coors still maintains its headquarters downtown, where it employs about 200, spokesman Colin Wheeler said.
Also in 2008, Newmont Mining Co. moved from downtown to a new building in Greenwood Village in the southeast corridor, consolidating several offices scattered throughout the metro area, spokesman Omar Jabara said. The company could not find adequate space downtown for its nearly 600 headquarters employees, he said.
Earlier this year, CenturyLink completed its purchase of Qwest, keeping its headquarters in Monroe, La. The merger has resulted in significant staff reductions at the former Denver headquarters. In February 2010, the company had 2,600 workers in the building. In March, that figure was at 1,200.
It was one of Colorado’s oldest companies — having acquired U S West in 2000 — and also its largest in revenue until Douglas County-based Dish Network overtook it last year. The departure leaves a big hole that spans across the market for office space, the nonprofit community and the professions that supported Qwest, such as lawyers and accountants.
“Qwest was certainly a great company to have downtown, and it was very supportive of a lot of causes,” Kirch heimer said. “We don’t know what CenturyLink might be like. My understanding is that they, too, are very community-focused.”
CenturyLink’s moves are being closely watched to gauge the impact of the change, he said.
There’s little indication yet that downtown’s office market is suffering from the headquarters losses.
Vacancy rates are lower and rental rates higher than the southeast corridor. During the first quarter, downtown property owners leased out 151,000 square feet, while southeast owners put 186,000 on the market, according to commercial brokerage Newmark Knight Frank Frederick Ross.
Downtown has had its wins, most notably when DaVita alighted there in a move from El Segundo, Calif., in 2010. The kidney-care company is leasing space in LoDo and plans to move into a new headquarters building near Union Station next year, employing up to 900 there.
“We looked at a lot of areas in every part of Denver and outlying suburbs,” said DaVita chief executive Kent Thiry. “In the end, we just said you cannot have a great city without having a great downtown. We think LoDo has the potential to take Denver to the next level of being a distinctively vibrant American city. We want to be a part of that.”
Thiry pointed to the downtown shuttle extension, the proximity of sporting venues, the area’s restaurants and shops, and the Union Station project as LoDo’s strengths — welcome changes from the “sterile business park without a soul” where DaVita used to be based.
Employee reaction has been so positive that DaVita “teammates” from elsewhere are clamoring for transfers to Denver, he said.
“Its looking like this is going to be one of the best decisions we ever made,” he said.
Downtown supporters say DaVita represents the kind of company that may choose the central business district in the future — companies that move here because of highly educated workers who choose to live here.
“If you want young talent, your chances of attracting the people you want are better downtown,” said Newmark executive managing director Tom Lee.
Other recent downtown developments include Xcel’s new regional office building, HealthGrades’ move last year from Golden, plans for a new building for IMA Financial Group at Union Station, ski-resort operator Intrawest’s plan to move its headquarters from Canada, and for-profit college operator Bridgepoint Education’s new service center.
Bridgepoint officials chose downtown after a metro-wide search, said Mitch Thomas, vice president of the Denver center.
“We wanted a location where we could attract talent from around the metro area, which ultimately put us downtown because it’s central,” Thomas said. “It also had a lot to do with transit and our ability to offer our employees an (RTD) Eco Pass.”
Still, there’s no denying the south’s charms.
Engineering giant CH2M Hill, a Fortune 500 company, long located in the southeast corridor, chose to relocate in the Meridian International Business Center in Douglas County about 10 years ago. The decision was based on where the company’s employees lived, availability of land for growth, free parking, and easy access to highways and transit, said spokeswoman Tessa Anderson.
Other companies appreciate the proximity to Centennial Airport, where squadrons of corporate jets come and go daily.
The area has seen its share of recent wins, with United Launch Alliance’s consolidating 2,000 workers throughout the area into four buildings in Centennial, and real estate website Trulia opening a Centennial office with 100 employees.
“We’re seeing more quality prospects lately,” said Myers, of the South East Business Partnership. “More people are on the ground looking at specific space.”
Greg Griffin: 303-954-1241 or ggriffin@denverpost.com
Corporate attractions
A look at what appeals to companies when they choose between downtown Denver and the southeast corridor:
Downtown
•Central location
•Proximity to restaurants, sporting venues, entertainment
•Transit (Union Station, light rail, eventual FasTracks build-out)
•Urban atmosphere
Southeast
•Space to grow
•Lower land costs and rent
•Free parking
•Transit (light rail)
•Schools
Headquarters: Downtown touts own mix of benefits
LIBERTY MEDIA
Liberty Media, whose headquarters is south of Centennial Airport in Douglas County, holds stakes in a variety of companies. Denver Post file
NEWMONT MINING
Newmont Mining moved from downtown to Greenwood Village in 2008, consolidating offices from throughout the metro area. Denver Post file
UNITED LAUNCH ALLIANCE
United Launch Alliance consolidated 2,000 workers throughout the area into four buildings at its headquarters in Centennial. Denver Post file
