HomeMy WebLinkAboutEconomic Advisory Commission - Minutes - 11/16/2016MINUTES
CITY OF FORT COLLINS
ECONOMIC ADVISORY COMMISSION
Date: Wednesday, November 16, 2016
Location: Colorado River Room, 222 Laporte Ave.
Time: 11:00am–1:00pm
For Reference
Wade Troxell, Mayor & Council Liaison
Josh Birks, Staff Liaison 221-6324
Dianne Tjalkens, Minutes 221-6734
Commission Members Present Commission Members Absent
Sam Solt, Chair Denny Otsuga
Ann Hutchison Kristin Owens
Linda Stanley
Glen Colton
Ted Settle
Alan Curtis
Craig Mueller
Staff Present
Dianne Tjalkens, Admin/Board Support
Josh Birks, Economic Health Director
Guests
Sam Bailey, Senior Manager, Global Business Development, OEDIT
Eric Sutherland, citizen
Meeting called to order at 11:02am
Public Comment—Eric Sutherland: Action may be taken by EAC regarding URA Board decision on
Lyric Cinema Café. URA action is in opposition to state law. Grotesquely mismanaged; not following
amendments recently adopted. URA policy is not to borrow money and use money upfront as investment
in a property that is going to create additional revenue. Method is to sell bonds. URA has been making
pledges to pay disbursements in the future as the revenue comes in. That does not comply with statutory
requirements. Tax increment may be used for principal interest and premium payments, as well as
revenue sharing, only. Have organization whose policies conflict with requirements of law. Going on
across the state, not just Fort Collins. Centerra does not comport with statutory law either. Money taxed
and levied for education that is being diverted to corporate welfare willy-nilly. Suspicious that EAC will
be using existing policy for Lyric, that is opposed to statutory requirements for URAs. Summit housing
project is worst bastardization of public financing, aside from Innosphere. City will have to eat $5M
because state cannot make URA hold to that arrangement. Subject to annual appropriation that occurred
years after the structure was available. PSD is entitled to the tax revenue from that building. URA Boards
were supposed to be reconstituted to have additional representatives. Ask that Mayor request one of EAC
members be appointed to that board.
Review and Approval of Minutes:
October minutes approved as presented.
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Agenda Review—No changes.
Commission Member/Staff Updates—None.
AGENDA ITEM 1— Office of Economic Development & International Trade (OEDIT), Sam
Bailey
Primarily work with existing companies in Colorado. Work closely with City’s Economic Health Office
and other economic development organizations to lead or support projects. OEDIT is a collection of
teams—includes small business development center, business funding and incentives, Colorado tourism
office, Colorado Office of Film, Television, and Media, etc. They work on tactical measures with
communities to support existing employers and attract employers from out of state. Ex: Developed
adaptive reuse of former high school.
Business Recruitment and Expansion Process
Communities need economic diversity to be sustainable. Focus on retaining what we have. A major driver
to bring companies here or help businesses expand is the workforce. Process: Business contacts site
selector, local economic developer, or state. OEDIT looks at net new jobs, whether they are looking
elsewhere, training plans (investment in workforce), capital investment into community, company’s
financial standing. State does not provide operational capital for businesses that cannot stand on their
own. No money is put in up-front. After they create and maintain the jobs, the company gets the
incentive. Reward performance. One of ten proposals gets an incentive. OEDIT communicates well with
local economic development organization. Review project scope and look at how state, region, or city can
support the project. Adaptable. Incentivizing good paying jobs—must meet or exceed average annual
wage.
Larimer county projects include: Agrium, Anheuser-Busch, Woodward, Hach, Intel, Comcast, etc.
Comcast wanted to establish a customer connection location and identified Fort Collins due to talented
workforce and proximity to CSU.
Discussion/Q & A:
• People come here for quality of life—open spaces, parks, culture.
o Focus on quality of life—have healthy, productive workforce. Have access to recreation that
helps create balance. Employers are considering where employees are going to live and
recreate. Investments in open space protections, biking infrastructure, etc. Not just focused on
balance sheet. We show executives where their workforce will live. Conversation has
changed to livability.
• What happens if company does not hire at the wages promised?
o Don’t get incentive until meet the minimum requirements. Prorated on actual performance.
• Where does money come from?
o With net new jobs created, there is tax revenue generated from those jobs. Some programs
have caps and some do not.
o Because it is a credit it is a reduction in state income tax.
o Ultimately someone ends up paying, especially as costs go up. As people move here, the
community has to provide more services.
o If will cost community more than it gains to have a company, incentive will not be approved.
Proposals are approved by an independent commission.
Examples?
State focus is primary job creation. Don’t typically work with retail. Ex: Did not
recommend home health care clinic. There was not interstate competition, and would
incur Medicaid/Medicare payments. Staff recommended against the project—did not
feel was a good use of taxpayer dollars and the commission denied the incentive.
Other side: Intel was considering major capital investment project and Colorado was
competing with other states. Company provides great benefits and wages, company
was in good standing, etc. Staff provided recommendation and the project was
approved by the commission.
• Regarding Comcast deal—wages are not high enough for housing costs. This board did not agree
with granting an incentive.
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o Can’t tell a company they cannot move into a community. Don’t include benefits in annual
average wage calculation. Comcast’s average wage was $45K.
• Colorado is having rapid growth and low unemployment. Why do we want to attract more jobs? Are
we providing better jobs for people who are here, or will they come from outside? Seeing sprawl and
degradation of quality of life. Why do we have the attitude that more is better? Don’t need incentives.
o Intent to have good ecosystem of employment. Economic Development Commission will be
debating tomorrow on pulling back on aggressiveness of incentives. Focusing on ways to
make the approach more conservative. Had to diversify our economy to get where we are.
Don’t want to just rely on oil, natural gas, or food production. Higher underemployment rate
in Weld County.
• People choose to live where they do for many reasons. Let people choose where they want to live.
Many people are underemployed here because they want the quality of life. Don’t need to bring jobs
here for them.
o Comes down to whether we need jobs incentivized in Fort Collins. Have diversified
already—not just because of what the government has done. Maybe other communities do
need help diversifying; they don’t have the quality of life we have.
• Other markets for Comcast?
o Talked about other locations that have lower annual average wage. Ex: Niner bikes was
almost lost to Las Vegas—major retention project. 30 employees would have lost their jobs.
• City was not involved in Comcast project. Name was disguised. City is working hard on triple bottom
line. This project, for cost involved, infrastructure, school bond issue—huge cost that should have
been considered by the City when the city gets these jobs.
o Communicated with City about the project. Commission approved project. City
communicated that would not provide incentives.
• Why put project here, when City didn’t want it?
o Not didn’t want it, but didn’t support it because the project didn’t support strategic initiatives.
Have public meetings where people can give opinion. Expect to see more diversity on
commission in near future.
• EAC learned about Comcast deal through article in newspaper. The issue is not content, but process.
Don’t want this to be a precedent.
o Didn’t know about project, do didn’t know to go to the public meeting.
o City can’t stand in the way of a private company leasing from another private company. City
didn’t stay up with the project enough to know that it was incentivized.
Companies applying for incentives have to be able to do so with confidentiality.
Comcast justified its desire to move to Fort Collins.
• State made decision to invest in what they wanted to, without conversation with the community.
o Sometimes a company decides to just work with the state if a city does not elect to incentivize
a project. Incentives are not the driving factor in where a company chooses to locate. Many
factors.
o Would Comcast have come without state incentives? If had public comment against the
project, would that have been considered?
Could have gone to Arizona or New Mexico where there are lower costs for doing
business. They were looking for a ready workforce—aligned with higher education.
Fort Collins has built an attractive community for businesses. What we don’t like is
that we didn’t hear about it, the process of how it happened.
The City was not as involved as it should have been.
o Talk with state legislature about the process.
Commission is talking tomorrow about creating tiers for credits based on
performance.
• EAC did send memo to Council expressing similar commentary as we heard in today’s meeting
regarding the Comcast decision.
o Many issues associated with current regional growth. Can make recommendations to Council.
ACTION ITEMS: Josh and Sam will discuss how to be better prepared for these types of issues in the
future. Josh will bring Economic Development Commission items to EAC so members can give
testimony.
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AGENDA ITEM 2— Growth Dialogue Issue Book – Recommendation, Sam Solt & Ted Settle
Discussion/Q & A:
• Do not believe this is a project for the commission. General growth is not our purview. Will not stand
behind the project. Muddies the water when we talk about City Plan—that will be a challenging
process already. Picking at a scab—no one in this community wants unbridled growth, so we don’t
need to continue to have meetings to discuss it.
o Not seeing any conversation on this in the community.
o But what will we do about it? Examples of places that have controlled growth?
Can control growth. Ex: Boulder.
And need a million dollars for a house there.
• Like the idea of a logical deliverable as soon as possible. Would be great to have each person’s
perspective memorialized. Agree that the topic will get really old if keep talking about the theory.
Once deliverable is complete, does it lead to action? If not, put it to bed. Test it quickly, and if it’s not
working be done with it.
• Vehicle to advocate for another organization to run the project and get CSU engaged. Like idea of
sampling community opinions in an organized way. Better phrased as sustainable growth.
Presentation of proposal could be wordsmithed some.
• Working with Cameron Gloss to integrate into City Plan process. Critical to have this conversation as
a community in City Plan process. Have not seen us look at full range of options for growth. Not
looking at slowing growth, just at managing it.
• Issue book comes first, then engagement comes after? Where does Center for Public Deliberation get
their information?
o Engagement has to happen on front end to get community opinions. CSU might hold some
focus groups, talk to Cameron, etc.
• This is a topic that fits Cameron’s group well. Need to move forward with Jackie and others quickly
to get into Cameron’s schedule. There is history with this model in northern Colorado. Four steps:
develop the book through community involvement, deployment of book (go out to community
groups), summarize data, give input to City Plan. Cameron is looking forward to the help around City
Plan. Mayor has been skeptical about whether this is economic or population growth.
• If EAC decides to support the issue book, Council will decide whether it is a good idea and whether
to move forward. If they like the idea, it’s possible they will select another group to lead the project.
Get proposal to Council as soon as possible so they can give direction to staff. Jackie likes the TBL
approach.
• City Plan is always a contentious process. This could give good context for those discussions.
Support the book. Kristin gave good comments on wording.
• Staff might look at this from a thought-leadership perspective. Elevates us as a peer community.
Branding.
o That is a byproduct that could come out of a well thought-out process. Should be about work
that will help the City decide what it wants to be in the future. Addressing growth
systematically may allow us to move beyond that conversation.
• The example book we looked at gave a series of options to address the issue. Options book.
• Exogenous vs endogenous variables. Things we cannot affect at all vs. things we can, and how big are
those influences?
• Support the proposal, but encourage the group to empower Ted and Sam to get the concept to
Council.
Linda moved that the EAC direct Ted and Sam to incorporate member comments into a proposal and send
to Council for consideration. Glen seconded. 6-0-1 (Ann opposed)
• Don’t want to regret not following the path. When we get to City Plan, there will be limited people
who show up to Council to comment. This book can provide scientifically valid input from the wider
community. Just letting growth evolve without managing it is crazy. Beyond a certain tipping point,
there is no turning back.
• Sense of urgency. Need to meet with Jackie and confirm commitment with Martín. If motion is
passed, Ted and Sam will follow through.
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ACTION ITEMS: Ted and Sam will complete the proposal for the issue book.
AGENDA ITEM 3— Project 1601 – Business Assistance Package, Josh Birks
Confidential project 1601. Company is willing to have staff talk about them openly once the proposal
goes to Council. 1601 is an advanced manufacturer active in broader region. Looking at existing
building—will upgrade HVAC, lighting, exterior, etc. Reuse/retrofit reduced overall impact of project on
community. Connections to strategic plans, creating public benefit. Diversifying industry—advance
manufacturing is desired—provides opportunity to less-educated for well-paying jobs, with benefits and
opportunity for upward mobility. Using infrastructure already invested in to highest potential. Advance
manufacturing is done with a lot of automation and technology, and product is technologically advanced
as well—higher skill level required of operators. Staff has done preliminary analysis, starting public
engagement with EAC and Council Finance Committee. Four forms of assistance being evaluated:
1. Rebating use tax (on purchases made outside community). Performance based. Only use
undedicated general fund portion.
2. 50% rebate on business personal property tax. Subject to depreciation.
3. Utility rebates for energy conservation. Exploring removing cap for solar rebate to achieve carbon
reduction. Same with lighting retrofits.
4. Public improvements. Adjacent intersection needs a light. Traffic use will remain similar, but
would work better for property owners to fund upgrades to the intersection. ~$550K value of
intersection.
Would already be eligible for $75K existing use tax rebate. Extension of company that already operates in
northern Colorado. Assistance package requires net new jobs and new business. Only access rebates once
they reach net new jobs thresholds.
Sustains 300 construction jobs in region. Working on sustainability assessment for the project.
Assumption in model for jobs that would go to existing vs. new residents, homes to be purchased, etc.
Going to Council December 6.
Discussion/Q & A:
• Costs of added assistance needed in community like Section 8 included in model?
o Josh will find out.
• Do costs include providing schools to new people?
o Do similar fiscal impact analysis for PSD and county. With assumptions we have now, have
net benefit. Use PSDs current budget and assumptions on number of new students created.
Analysis focused on operational costs, not capital costs.
o Capital costs of building three new schools should be included.
Josh will ask consultant how to include in model.
• Will be sections on environmental and social impacts when give final recommendation?
o Yes. Will share air quality, social, and other data.
• Do they bring anything unique in the way of process?
o Don’t currently have this line of business in our community, but elsewhere in the state.
• Average earnings per job created?
o Jobs on site will all exceed the county average. Will be at Fort Collins average income. Spill
over jobs are lower.
• Do not support. Want to stop incentivizing. Can’t measure intangible costs. Already have crowding
and housing issues.
• Avago brought something more than just cost. One of six in the world that can do what they are
doing.
o Anchors them in Colorado.
Glen moved that EAC does not support Council authorizing this incentive. Linda seconded.
Motion failed 2-4-0. Alan left before vote.
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• $67K per student needed to build new schools.
• Should be for the assistance package or remain silent. Should not be recommending opposition.
• Not enough information is available to make a strong recommendation.
• Would help to have social and environmental impacts.
• Also would like to see stronger definition of what would do for companies already here, like
rebates. Also, how do energy cost savings play into Road to 2020.
o Project has been moving quickly.
• Construction cost use rebate—difficult to swallow.
o Using existing building and would rather see that than new construction.
o Environmental analysis will show this.
o Concern around affordable housing, cost of services. Haven’t really captured that.
AGENDA ITEM 4— URA: Lyric Theater Recommendation, Board Discussion
Not discussed. Can make formal recommendation at next meeting.
Additional Discussion
• Regarding public comment—staff disagree with Eric Sutherland’s interpretation. Have had the
policies reviewed by attorneys.
• Need to review board recruitment.
Meeting Adjourned: 1:00pm
Next Meeting: December 21
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