Arrow Electronics and DaVita have staked out a majority of the tax breaks under a 2-year-old program that rewards employers that create higher-paying jobs.
But nine other companies have applied to participate in the Colorado Job Growth Incentive Tax Credit, including two unidentified firms still weighing their plans to bring jobs to the state.
The lesser-known applicants are involved in everything from designing a replacement for the space shuttle to helping students finance their college education.
What they share in common is an agreement with the state to bring new jobs that pay 110 percent or more of the average in the county where the jobs are being added.
In return for creating 3,258 jobs over a five-year period, the 11 participants have the potential to earn up to $29.5 million in state income-tax credits.
“This is an incredibly valuable tool for the state to have that we didn’t have before,” said Alice Kotrlik, the state’s deputy director of economic development.
Unlike some other programs that pay for “presence,” the job-growth incentives are performance-based.
No jobs, no tax credit. But the program isn’t limited by appropriations, so there is no risk of funds running out, as can happen with job-training funds.
And so far, the credit has shown it is hefty enough to tip the scales in Colorado’s favor against rivals.
“Before we made the decision to move, we wanted to make sure we got that approval for the credits from the state of Colorado,” said Scott Evans, founder and chief executive of Outreach Inc.
In January, the faith-based media firm announced plans to relocate from the San Diego area to Colorado Springs after winning approval for $1.53 million in tax credits in return for creating 162 jobs.
The company has put the original FedEx National Data Center in Colorado Springs under contract and will fill it with printing presses, a mail facility, warehouse and video studios.
In June, Outreach plans to relocate 110 jobs to Colorado, with existing staff from San Diego expected to fill about half those positions.
Colorado Spring’s lower cost of living and concentration of ministry groups were key draws, but the credit helped push Colorado ahead of Tennessee and Nevada, Evans said.
$521,738 in tax credits
Through October, participants in the job-growth incentive program had created 422 jobs and claimed $521,738 in credits, according to the Colorado Office of Economic Development and International Trade.
If companies don’t create the jobs promised at the wage level promised, they don’t get the full credit, Kotrlik said.
If they create more positions or pay more than they expected, they only get the maximum credit they sought when applying.
And the sooner they create jobs, the sooner they can claim the credits.
Some are already close. Sierra Nevada Corp. has hired 125 people this year in Colorado and is working on filling another 80 positions, said Amy Martin, corporate talent acquisition manager at the Nevada-based aerospace company.
“I fully expect to meet or surpass the 200 new hires listed with the state,” Martin said.
Sierra Nevada, which applied for credits in 2009, has 607 Colorado employees building satellites and developing the “Dream Chaser,” a potential replacement craft for the space shuttle.
The jobs are skilled and include mechanical, software, systems, aerospace and test engineers, along with engineering technicians.
Because an employer must create at least 20 jobs and because profits are needed to offset the tax credits, the program favors established firms over startups.
Two Fortune 500 firms alone are responsible for slightly more than half the potential jobs the program could create.
Arrow Electronics, which officially moves its headquarters to Arapahoe County from Long Island on Tuesday, has targeted 1,250 jobs, primarily new hires.
Kidney-dialysis provider DaVita, previously based in El Segundo, Calif., set a goal of 500 jobs under the program and as of 2010 had received credits for 244.
Two undisclosed firms have sought credits for about 764 jobs between them. The state isn’t revealing their identity until they confirm Colorado has won out over the competition. One company appears to be close to announcing, Kotrlik said.
New jobs unlock credits
To be eligible to participate, applicants must apply for tax credits before they have locked in a location, gone public with plans or hired staff.
Also, Colorado must be competing with other states for the jobs, a restriction designed to prevent employers from claiming credits for jobs that were coming here anyway.
DaVita, Arrow, Outreach and German-owned wind turbine maker REpower USA represent relocations, while other applicants are adding production plants or expanding operations here.
Cummins Rocky Mountain applied to claim credits for 42 jobs to staff a diesel engine remanufacturing plant in Commerce City. The company employs about 700 people distributing Cummins and Onan products in a 10-state region.
Likewise, Mountainside Medical in Boulder applied for 69 positions to staff a new factory in Louisville with machinists, engineers, quality control inspectors and others.
“Incentives help us to make a quick decision when we need somebody instead of a longer decision,” said Pete Neidecker, a senior vice president at the firm, which provides contract manufacturing services to medical device makers.
Each year over a five-year period, participants report their hiring information and receive a tax-credit certificate for the new jobs created. The credit is equal to half the FICA or payroll taxes a business pays for the new positions, assuming the jobs pay 110 percent of the average wage.
Those credits, along with funds for job training and other incentives, helped the company take its workforce from 45 to 100 in two years, Neidecker said.
The company plans to build three more manufacturing plants, with one more coming in Colorado, Neidecker said.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or
Numbers
69 New hires by Mountainside Medical for its medical-device factory in Louisville with a Colorado tax credit
$29.5 million Credits applied for by 11 companies for five years
$9,055 Credit for each of 3,258 hires
