Adams County and Denver want to include Denver International Airport and its surrounding areas in an economic-development program designed to spur investment in distressed areas of the state.
But members of the Colorado Economic Development Commission, who are balking at adding what many consider a national success story to the state’s aren’t clearing the two requests for landing.
“I am not sure what the legislature had in mind when they used words like ‘economically distressed,’ but I don’t think they meant something that has yet to be developed,” said J.J. Ament, a member of the commission.
Ament led the to approve redrawn boundaries for 14 enterprise zones, while sending proposals from Adams County and Denver back to state economic development staff for further review.
He questions why the nation’s sixth-busiest airport and surrounding “greenfields” — in the direct path of development within one of the nation’s most robust metro economies — deserve inclusion.
Ament said he is concerned the program is being used as a general economic development tool rather than for its intended purpose of assisting distressed areas, leaving it open to dilution and criticism.
” I want to see the applicants answer that question in a way that I and other commissioners can feel comfortable voting for and defending to taxpayers,” he said.
To qualify for inclusion in an enterprise zone, an area must meet at least one of three criteria — an unemployment rate at least 25 percent above the state average; per capita income that is at least 25 percent below the state average; and population growth that lags behind the rest of the state.
Denver wants to add the land DIA sits on to its enterprise zone, while Adams County has proposed adding large swaths around the airport that stretch from Interstate 70 to Colorado 7.
Supporters say not only do those areas meet the technical criteria but the incentives that the Enterprise Zone program offers are needed to jump-start development in distressed neighborhoods from Brighton to Commerce City, Green Valley Ranch and north Aurora.
As an added benefit, they say, the entire state will become more competitive on the global stage.
Jeff Romine, chief economist with the Denver Office of Economic Development, said several companies over the years have looked at locating in the DIA area but have gone elsewhere.
“Unfortunately, the infrastructure and the lack of investment up to this point has created a situation where they turned that location down,” he said.
Roads, water, sewer lines and other critical improvements are missing, and companies are unwilling to shoulder those costs. But they might do so with the help of the program’s most popular credit: one for capital investments.
“We will fight to keep DIA. We believe it is part of our strategy to create the biggest and best Enterprise Zone program that we can use to attract jobs,” said Barry Gore, president and CEO of Adams County Economic Development.
Traditional approach
In theory, Adams County could have stayed focused on its most depressed neighborhoods, a traditional approach under the program. But outdated strip malls and worn-out industrial parks in suburbia don’t scream corporate relocation and job creation, Gore said.
“If we can’t get employers in the neighborhoods, how close can we get them?” he asked. Higher paying jobs and shorter commutes will benefit all Adams County residents.
Another consideration is the program’s math. Urban enterprise zones are capped at a population of 115,000, while rural zones can have up to 150,000 people.
Multiple rural counties in their entirety can stay under that cap. Picking what stays and goes in urban zones requires more parsing, and Denver and Adams officials appear to be trying a new approach.
“The program allows each area to look at what their issues are,” said Sonya Gurman, manager of the Enterprise Zone program.
But she adds that the legislature put in common-sense checks from start to finish in which people can overrule the criteria.
State staff asked Denver to exclude 252 out of the 2,716 census blocks it included; some areas had per capita incomes exceeding $60,000 a year.
Both counties also have “graduated” successful areas out of the program, including the Lowry, Stapleton and Prairie Center neighborhoods.
But state staff haven’t excluded the airport areas from the proposal, something officials in Denver and Adams County are hopeful will help with their case in convincing the commission, which represents the final check.
In-migration and job growth
Metro Denver is a leader nationally for in-migration and job growth, which has contributed to some of the highest rates of home price appreciation and rent gains in the country.
“A case could possibly be made that the Denver metro region, for example, is growing so well that even ‘distressed’ properties don’t deserve the same tax benefits from the state as rural areas that likely have much greater disadvantages,” said Christopher Juniper, a veteran economic developer in the state.
But Romine said including DIA will set the stage for development years out, when the economy might no longer look so robust. He adds it is important to remember that the metro region’s success today results from decisions made two and three decades earlier.
Aside from minor tweaks, enterprise zone boundaries haven’t undergone a big change since 1989. The Colorado legislature’s efforts in 2013 to update the program now require that boundaries be reviewed at least once a decade, starting with the current redraw.
If adding the DIA areas to the Denver and Adams County zones works as planned, it could help the area clear the infrastructure hurdle and spur additional development that will provide a quick in and out, Romine said.
The redrawn zones statewide will boost the program’s coverage from 76 percent of the state’s land area to 84 percent and from 1 million to 1.4 million residents, just a little more than one quarter of the population, Gurman said.
Mesa, Pueblo, Larimer and Weld all added large blocks of land to their zones, but it is the expansions by Denver and Adams County that are drawing the most scrutiny.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or twitter.com/aldosvaldi
Enterprise zone activity in 2014
Business investment: $2.2 billion invested, generating $32.7 million in tax credits
Jobs created: 4,052 new jobs rewarded, generating $2.5 million in incentives
Job training: 32,000 employees trained at a cost of $52.9 million in return for $5.3 million in credits.
Commercial vehicle credit: $2.6 million invested in vehicles in return for $32,317 in credits.
Health insurance: Coverage provided to 1,567 employees in return for credits worth $313,399.
R&D: Expenditures resulted in $1.62 million in credits.
in credits
Source: Colorado Office of Economic Development and International Trade
