HomeMy WebLinkAboutRFQ - REQUEST FOR QUALIFICATION - 7370 DOWNTOWN HOTEL & CONFERENCE CENTER DEVELOPMENT (2)REQUEST FOR QUALIFICATIONS
7370 DOWNTOWN HOTEL & CONFERENCE CENTER DEVELOPMENT
The City of Fort Collins, in conjunction with the Fort Collins Downtown Development
Authority (DDA), is requesting proposals from qualified and experienced hotel
development teams for the design, financing, development, construction and operation
of a Hotel and Conference Center to be located in downtown Fort Collins.
Written proposals, seven (7) copies, will be received at the City of Fort Collins'
Purchasing Division, 215 North Mason St., 2nd floor, Fort Collins, Colorado 80524.
Proposals will be received before 3:00 p.m. (our clock), May 30, 2012 and
referenced as Proposal No. 7370. If delivered, they are to be sent to 215 North
Mason Street, 2nd Floor, Fort Collins, Colorado 80524. If mailed, the address is P.O.
Box 580, Fort Collins, 80522-0580.
Questions concerning the scope of the project should be directed to Project Manager,
Todd Dangerfield, LEED AP BD+C at (970) 419-8254 or tdangerfield@fcgov.com.
Questions regarding bid submittal or process should be directed to James B. O’Neill II,
FNIGP, CPPO, Director of Purchasing & Risk Management, at (970) 221-6779 or
joneill@fcgov.com.
A copy of the Proposal may be obtained as follows:
1. Download the Proposal/Bid from the BuySpeed Webpage,
www.fcgov.com/eprocurement
The City of Fort Collins is subject to public information laws, which permit access to
most records and documents. Proprietary information in your response must be clearly
identified and will be protected to the extent legally permissible. Proposals may not be
marked ‘Proprietary’ in their entirety. Information considered proprietary is limited to
material treated as confidential in the normal conduct of business, trade secrets,
discount information, and individual product or service pricing. Summary price
information may not be designated as proprietary as such information may be carried
forward into other public documents. All provisions of any contract resulting from this
request for proposal will be public information.
Sales Prohibited/Conflict of Interest: No officer, employee, or member of City Council,
shall have a financial interest in the sale to the City of any real or personal property,
equipment, material, supplies or services where such officer or employee exercises
directly or indirectly any decision-making authority concerning such sale or any
supervisory authority over the services to be rendered. This rule also applies to
subcontracts with the City. Soliciting or accepting any gift, gratuity favor, entertainment,
Financial Services
Purchasing Division
215 N. Mason St. 2nd Floor
PO Box 580
Fort Collins, CO 80522
970.221.6775
970.221.6707
fcgov.com/purchasing
kickback or any items of monetary value from any person who has or is seeking to do
business with the City of Fort Collins is prohibited.
Collusive or sham proposals: Any proposal deemed to be collusive or a sham proposal
will be rejected and reported to authorities as such. Your authorized signature of this
proposal assures that such proposal is genuine and is not a collusive or sham proposal.
The City of Fort Collins reserves the right to reject any and all proposals and to waive
any irregularities or informalities.
Sincerely,
James B. O'Neill II, CPPO, FNIGP
Director of Purchasing & Risk Management
7370 DOWNTOWN HOTEL & CONFERENCE CENTER DEVELOPMENT
SCOPE OF WORK
I. BACKGROUND
Fort Collins Overview
Fort Collins is located in northern Colorado, approximately 60 miles north of Denver. It
has a population of approximately 143,986 people. The City of Fort Collins is known for
its quality of life, as well as its brewing industry, new energy economy, and high-tech
companies. It is anchored by the Colorado State University’s campus which is situated
just south of the Old Town area.
Fort Collins has gained notoriety for its exceptional community character and is often
named as a top spot for living, retiring, and doing business. It is annually ranked as one
of the “Best Places to Live” by Money Magazine. It was also recently listed among
“Great Place for Entrepreneurs to Retire” (U.S. News, June 2009) and “Best Places for
Business and Careers” (Forbes, March 2009).
The following map shows Fort Collins’ location in northern Colorado, approximately 30
miles south of the Wyoming border. Cheyenne, Wyoming, is approximately 50 miles
north of downtown Fort Collins; Estes Park, Colorado, and Rocky Mountain National
Park are situated 40 miles southwest of Fort Collins; and as previously stated, Denver,
Colorado, is approximately 60 miles south.
Source: Google Maps
Old Town Neighborhood
A neighborhood is a group of complementary land uses; a related grouping of
inhabitants, buildings, or business enterprises. The Old Town Fort Collins neighborhood
is characterized by historic buildings, some of which provided the inspiration for Main
Street at Disney World. Old Town centers on the intersection of College Avenue and
Mountain Avenue. Old Town is primarily defined by Maple Street to the north, Jefferson
and Peterson Streets to the east, Mulberry Street to the south, and Meldrum Street to
the west. The map on the following page outlines the subject neighborhood.
The Old Town area is primarily commercial in nature with numerous restaurants, retail
stores, banks, and offices in the immediate area. College Avenue is the primary north-
south thoroughfare in Fort Collins.
Jobs by Industry
The table below lists the job base by industry sector in the Fort Collins Metropolitan
Statistical Area for 2010.
Source: City of Fort Collins
Colorado State University is the largest employer in Fort Collins with over 5,000 faculty
and staff including the Veterinary Teaching Hospital. The major private sector
employers illustrate a diverse set of industries, including technology, manufacturing, and
brewing. Fort Collins is home to New Belgium Brewing Company, Odell Brewing
Company, Advanced Energy, Woodward, and Water Pik to name just a few.
Downtown Fort Collins
Downtown Fort Collins serves as the historic, specialty commercial, cultural and
governmental center of the City and Larimer County. Unlike many downtown centers,
Fort Collins’ is vibrant and successful as a major community center. The Downtown
district typically generates approximately 11 to 14 percent of the city’s total annual sales
tax revenues, with a market share of approximately 27 percent of total restaurant sales
in 2011. In contrast, the Downtown district generates less than 5 percent of hotel
revenues, an indication of the market potential for full-service hotel and conference
facilities within the Old Town area.
Colorado State University
Colorado State University (CSU) is located in Fort Collins in close proximity to
Downtown. The main campus encompasses 582 acres just south of Old Town Fort
Collins. The main campus includes the Veterinary Teaching Hospital, which comprises
101 acres. The university also encompasses a 1,438-acre foothills campus and a
1,575-acre agricultural campus in Fort Collins, and the 1,177-acre Pingree Park campus
located 25 miles northwest of the city. In 2009, CSU had 25,413 resident students,
including 21,204 undergraduates. Approximately 80% of CSU students are Colorado
residents. The school also has 7,341 faculty and staff. Overall, the university comprises
more than 35,000 people and nine major colleges.
II. PROJECT OVERVIEW
Plan Team
The City of Fort Collins and the Downtown Development Authority (DDA) have been
seeking to attract a Hotel and Conference Center as a major catalyst for Downtown.
The DDA engaged a Consulting Team of RRC Associates, Inc. (RRC), Smith Travel
Research (STR), Swerdling and Associates, and Coburn Development to assist in
achieving the objective.
Brand Preference
As part of this effort, a comprehensive Old Town Fort Collins Hotel Market Study was
completed in May 2010 (“The Study”). The Study identified and evaluated three primary
alternative Product Scenarios:
Upscale Branded Boutique with Conference Facilities
Select Service
Small Upscale Boutique
While each product would provide a unique set of benefits and impacts to the
community and the immediate Downtown area, the City/DDA prefers the development
of an Upscale Branded Boutique Hotel with Conference Facilities. A brief description of
that product is as follows:
The City/DDA seeks a unique lodging product with design and architectural features
that complement Old Town Fort Collins. In order to provide incremental economic
impact to the city, as well as minimize the impact to existing hotels in the market, this
product would have a conference facility component with a minimum of 15,000 to
20,000 square feet of meeting space. In order to provide an added amenity to the city,
the meeting space should include a large ballroom of at least 12,000 to 15,000 square
feet, which would be the largest event space in the city. This would allow the hotel and
the city to attract groups that previously would not have considered Fort Collins as a
venue. In order to induce maximum meeting demand and lower the risk profile to
investors, the property should have a nationally recognized brand that falls into the
upscale or upper-upscale categories as defined by Smith Travel Resarch. The
City/DDA does not seek a luxury brand. The hotel could house approximately 180 to
200 guest rooms in order to accommodate large groups, provide the economies
necessary to be efficiently operated by a major hotel management company, and meet
the size requirements necessary for a major brand affiliation. Since a goal of public
involvement in the project is to generate positive economic impact, the hotel product
should have the potential to induce new group and leisure demand into the city.
While Fort Collins does not have a shortage of rooms, the inventory is heavily skewed
toward limited-service products. There exists a relative shortage of upper scale full-
service hotel facilities within the market area, particularly downtown. The preferred
alternative creates opportunities to expand product offerings rather than merely
duplicating existing facilities.
Preliminary Pro Forma Assumptions
The Study also concluded, based upon the pro forma operating assumptions, that an
upscale branded boutique hotel with conference facilities would require public incentive
and participation in order to make it financially feasible.
Taking into account the operating environment, conservative preliminary assumptions
are a 180-room hotel could open in 2013 with an occupancy level of 58 percent and an
average daily rate of $132. The Hotel is projected to reach a stabilized level of
operations in the 3rd operating year with an occupancy level of 70 percent and an
average daily rate of $144. Gross revenues are projected to equal $8.5 million in the
opening year and $10.4 million in the 3rd year. The Hotel is expected to generate $1.5
million in net income in its opening year and $2.6 million in net income in its 3rd year of
operations. The projected cost of the Hotel is estimated at $43 million.
Fort Collins Hotel Performance Metrics
Fort Collins hotel market performance continued its strong rebound from the steep
decline in the 2008-2009 period associated with the national recession. Compared to
2010, average occupancies were up by 8.1 percent in 2011 to 62.6%. ADR improved
by 6.5% to $98.40, and RevPAR increased by 15.1% for the year to $61.61. Even more
impressive, overall demand in terms of room nights booked and total revenues both
performed at all time yearly highs.
Clearly, the overall economy in Fort Collins as reflected in its tourism and hotel
operations has recovered well from the recessionary period of a few years ago and
supports the assumptions of the Study conducted in 2010.
Public/Private Financing and Cooperation
The City/DDA recognizes that in order to facilitate an economically viable Hotel and
Conference Center within Downtown Fort Collins, some form of public/private
partnership will be required.
The City, DDA, and consultant team have identified and evaluated various alternative
financial assistance packages that can provide sufficient incentive to enable the project
to proceed. The City is willing to consider various potential arrangements that would
encourage private investment by enhancing the return on private equity to levels that
are commonly accepted in the market place today. However the City and the DDA
intend to minimize potential City/DDA investment, risk and overall liability. For this
reason, the City/DDA seeks a private sector partner that is most capable of bringing the
lowest possible cost of capital to the project.
Three primary alternatives related to public participation include:
The DDA has an existing Tax Increment Financing (“TIF”) District within Old
Town and has experience in considering these types of incentives. The TIF
would be the vehicle for financing participation in certain “public” infrastructure
categories such as parking, meeting space, enhanced architectural elements
and unique public amenities or extraordinary developments that are typically
associated and legally acceptable with the DDA’s TIF program.
Utilization of possible bond and tax credit programs (e.g., New Market Tax
Credits) which may be available for this type of development. Such
assistance could have the benefit of reducing the total debt associated with
the project, lowering applicable interest rates, and creating “equity” within the
project pro forma. This program would need to be located on a “qualifying”
site and would also be dependent upon the project’s ability to receive required
State or Federal approval.
The third alternative might incorporate a hybrid of the two above. It may be
that a proposal involving some level of direct infrastructure support in
combination with potential bonding or financial assistance might be
advantageous to all parties involved, while minimizing City or DDA financial
liability or risks.
The specifics of such public financial participation have not yet been determined and
are subject to detailed examination and negotiation with an approved development
team, the DDA, City of Fort Collins public officials and City staff.
Clearly, prior experience of the development team in the successful operation of
comparable full service Hotel/Conference Centers (ideally, located in Downtown
districts) is one important consideration in the evaluation of qualifications. Teams’
experience in utilizing public-private cooperative partnerships would also be of benefit.
Additionally, demonstrated financial capability of the development team to successfully
implement the full development and construction of the entire Hotel and Conference
Center project, as well as support of the overall operations of the facility, over an
extended period is a significant consideration of this RFQ process.
A more comprehensive discussion of the submittal requirements and evaluation criteria
of the RFQ follows.
III. SITE
Remington Street Site
The City of Fort Collins owns a property of approximately 1.67 acres located a half block
east of College Avenue, at the corner of Oak Street and Remington Street, and the
Downtown Development Authority owns a property immediately adjacent to the north of
approximately 0.46 acres. In combination, these properties of approximately 2.13 acres
comprise the Remington Street Site. The site is centrally located with respect to the Old
Town Historic Downtown District, and currently it is primarily utilized as a surface
parking lot and a former service club building that is now vacant. A variety of
restaurants, specialty retail establishments, and offices typical of successful downtowns
are located within close proximity. A parcel map of the Remington Street Site is
provided on the following page.
The City is willing to offer the 1.67 acre parcel to house the proposed hotel and
conference center development, and is willing to negotiate terms and conditions for sale
or long-term lease, and conditioned upon the preservation of an equal amount of public
parking spaces being accommodated in the new project. The DDA is also willing to
negotiate terms and conditions for sale or long-term lease of the 0.46 acre property.
The City/DDA has also recognized that several additional parcels within the downtown
area are potentially suitable for comparably sized hotel and conference center projects.
Other Sites
While the City/DDA is willing to offer the Remington Street Site as a basis for proposing,
the City/DDA are also open to consideration of proposals for other appropriately located
and sized parcels that might be assembled and “controlled” by the development team.
The consulting team has identified six potential sites in addition to the Remington Street
site that could support the project. These six other sites are privately owned and would
need to be assembled for this purpose.
Parcel Map of Remington Street Site - City and DDA owned
Source: Larimer County
Each of the alternative sites has been evaluated on a preliminary basis by the
consultant team, using the following key criteria:
Site Size: Is the site appropriately sized for the project or would
accommodating the project require a more costly solution?
Physical Suitability: Is the site subject to utility, zoning, flood and/or other
factors that could impact the development potential?
Proximity to CSU: Both distance and ease of access
Proximity to Old Town: Both distance and ease of access
Visibility: How visible is the site from primary circulation routes utilized by
visitors to Old Town?
Accessibility: How accessible is the site to visitors arriving at the hotel and
what is the availability of access options for parking, service, etc.?
Nuisances: Is the site impacted by nuisances such as train and truck noise?
The City/DDA, therefore, are open to consideration of a proposal for a site other than
Remington Street as referred to above. Any such alternative proposal would be
analyzed based upon the criteria as identified. In addition, formal evidence would need
to be provided that a proposed site would be controlled via ownership by the
development team, or by a firm option covering a timeframe sufficient to reflect the
period of application, negotiation, project design and approval, etc.
IV. SUPPLEMENTAL INFORMATION
Interested parties responding to this request are encouraged to review the following
information. Copies are attached at the end of this document.
1. Old Town Fort Collins Hotel Market Study - May 2010
2. Meeting Planner Survey Results Downtown Hotel and Conference Center - April
2011
3. Appendix A: Assessment of demographics, migration and mobility, income and
housing, economy and workforce - Fort Collins MSA 2010
V. SUBMITTAL REQUIREMENTS
The City/DDA will accept qualifications submitted within the stipulated timeframe.
Those that do not comply with all submittal requirements, indicate limited financial
capability, or propose an inappropriate development concept may be disqualified
without further evaluation.
The City/DDA are the sole and final decision-maker regarding selection of the
development team, and reserve the absolute right to reject any or all proposals.
Individual submittals, except the financial information submitted under separate cover,
will not be returned. Please submit clear and concise responses with only the
information requested below. Provide a table of contents at the front of the response.
1) Transmittal Letter
2) Development Team Summary
3) Description of Relevant Experience
4) Preliminary Development Concept*
5) References
6) Demonstration of Financial Capacity and Related Information
*No site plans or architectural drawings are necessary at this time.
1. Transmittal Letter
The transmittal letter should include the following information:
Name of the submitting company or entity
Name, title, address, telephone number, fax number and email address of the
person designated as the primary contact
Names and relationships of all companies and entities included in the
proposal (e.g., architect, and if known, hotel operators, developers,
consultants, builders, brands, etc.)
2. Development Team Summary
The City/DDA neither requires nor expects that all of the professionals that might
eventually be involved in the hotel project be identified in the RFQ response. The
development team could consist solely of a development company and operator.
However, to the extent that a more comprehensive set of potential team members
can be identified (e.g., architect, builder, operator and brand), respondents are
encouraged to do so.
Please provide the following information, where applicable, for each member of the
development team. If the entity is a joint venture, provide information on each
partner and a description of prior working relationships.
Description of core business activities and mission
Number of years in business
Number of full-time employees
A description of the roles of key team members and one- to two-page
resumes of key staff assigned to the project. If the proposing entity has
already identified outside consultants or advisors to assist in the planning,
design, negotiations or other aspects of the project, please identify these
consultants/advisors and briefly describe the nature and type of services to be
provided.
Supplemental materials such as company brochures, etc.
Non-exclusivity: The City/DDA, in conjunction with the selected developer, expects
to assemble the best combination of potential team members. With this objective in
mind, all members of a responding team, with the exception of a lead developer,
may be listed as members on more than one proposed team. A developer of one
team may participate in a supporting role on another team, but will not be considered
for multiple lead-developer submittals. For example, a lead developer on one
project team may submit as an equity investor on another team. An operator or
brand may also submit on another project team.
3. Description of Relevant Experience
Please provide a brief description of not more than five recent projects with a
construction value of more than $20 million completed by the proposing companies,
entities or development team. Members of the proposed development team for this
hotel project should have had a significant role in these past projects. For each
project, please include the following:
Project name and location
Project type (e.g., hotel, conference center, etc.)
The number of hotel rooms, and square footage of conference space and
food and beverage venues
A description of the quality level (e.g., number of diamonds, guest services,
business services), target markets (e.g., group, individual business traveler
and leisure), and amenities (e.g., business and fitness centers, restaurants,
lounges, spa) of the comparable hotels
Photos and site plans of the project
Current status of the project (e.g., construction status or number of years in
operation)
Names and roles of other companies, organizations or partners involved in
the project
Development cost and financing summary
List of lenders for the project, including contact information
4. Preliminary Development Concept
Describe in brief narrative form and supporting tables, within 6 pages or less, the
hotel development concept proposed for Old Town Fort Collins. No site-specific
plans or illustrations are necessary at this stage. Please include the following
information:
Indicate the number of hotel rooms, and amounts of conference space (in
square feet, including ballroom and breakout rooms), and food and beverage
venues included in the proposed concept
Describe the quality level (e.g., number of diamonds, guest services,
business services), target markets (e.g., group, individual business traveler
and leisure), and amenities (e.g., business and fitness centers, restaurants,
lounges, spa) of the proposed hotel. Provide comparables whenever
possible.
Identify the preferred downtown parcels selected to house the proposed hotel,
conference center, and required support services. If the preferred parcel is
the City-owned Remington Street location, describe the method and proposed
terms to acquire or lease the property. If the preferred parcel is an alternative
site, provide a detailed description of the site, rationale for its selection, and
evidence of its ownership or control by the development team.
Suggest preliminary ideas for integrating the proposed hotel with surrounding
uses, to maximize potential synergy with other Old Town restaurants and
retail establishments
Provide an estimated preliminary development schedule, including all
predevelopment activities, and any plans for phased development
Operating Plan
Describe your relationships with major hotel brands and operating companies.
While this RFQ does not expect the developer to select a brand or operator at
this time, please discuss your approach to brand and operator selection and
indicate whether you would recommend a franchise agreement or a brand
managed hotel.
Financing
It is the City/DDA’s goal to minimize the level of public financial participation
in the project and to attain the most distinctive, highest quality and marketable
project possible. Respondents will be expected to provide information
regarding sources of debt and equity, and are urged to consider creative
development and financing structures that will accomplish these ends.
Preference will be given to those development teams that minimize the use of
public financing and risk, emphasize private sector financing and/or
participation and provide the greatest economic opportunity for the City/DDA.
Proposals will include a financial plan that details the assumptions used in the
recommended development. Required common assumptions expected of all
respondents include: 180 rooms; Minimum 15,000 square feet meeting
space; Stabilized room revenue assumptions beginning in Year (3) three:
Occupancy = 70%, Average Daily Rate = $144, RevPAR = $100. If
desired, respondents may provide the City/DDA with written comment on the
required common assumptions by providing additional market research, such
as a Smith Travel Research Report, to support the rationale for alternative
stabilized room revenue assumptions in a financial plan.
A financing plan and project schedule must be submitted. As part of the
submission, the developer shall identify practical financial sources that could
be considered to support the project.
Proposals should break down all financial assumptions for the project,
including price offered for any public land included.
The City/DDA will give weighted consideration to the development team with
significant experience in developments similar in scope and quality to the
proposed project, and who also demonstrates that it has significant financial
resources to support a guaranty of completion in accordance with a fixed
schedule.
The City/DDA generally understands the economics of the hotel market and
will consider various public and private finance options to best meet the
needs of the project. The City/DDA has the following financial objectives:
Limit financial participation by and risk of the City/DDA
Ensure that the hotel is operated with the benefit of the conference
facilities and community in mind, and results in an appealing urban
addition to the community
Leverage economic gains of the project for the general benefit of the
downtown area and the City/DDA
5. References
Provide references (including company/organization names, titles, telephone
numbers and e-mail addresses) for individuals who can provide information related
to the following items:
Financial—Identify at least two contacts that have provided members of the
development team with comparable project financing in the last five years
Public or Governmental—Identify at least two city or other local public officials
who have been involved with a project completed by members of the
development team (e.g., downtown development directors, planning directors,
economic development directors, redevelopment officials, etc.)
General—Provide the names of up to two other contacts that could provide
information about the experience and capability of members of the
development team to complete the proposed project. These could be
development/project partners, hoteliers, etc.
6. Demonstration of Financial Capacity and Related Information
Provide the following and any other relevant information to demonstrate the financial
capacity to undertake and complete the development proposed in the preliminary
development concept. You may submit this information under a separate cover
marked “Priveleged and Confidental Information.” To the extent allowable by law,
the City/DDA will protect such information from public disclosure.
Financial statements for the previous three fiscal years for the lead
development entity. Audited statements are preferred.
Most recent annual report(s)
List of any current nonperforming or loan defaults in the past five years
Description of any instances in which a member of the development team or
any named individual has been involved in litigation or other legal dispute
regarding a real estate venture during the past five years. Include information
regarding the outcome of the litigation or dispute.
Information about instances in which any member of the development team
has ever filed for bankruptcy or had projects that have been lost to
foreclosure
VI. SELECTION CRITERIA
Emphasis will be placed on the directly relevant qualifications and financial capability of
the respondent. In addition to acceptance of basic organization and framework of this
proposed development, submittals will be evaluated based on the following main
criteria:
Qualifications and Experience
Qualifications of team members
Significant experience in developments similar in scope and quality to the
proposed project, including projects involving public-private cooperative
partnerships
Quality and financial performance of past projects
Completion of past projects in accordance with a fixed schedule
Financial Capability
Financing plan that is realistic, based upon achievable assumptions and that
effectively utilizes City and/or DDA participation, while at the same time
minimizes City/DDA risk
Demonstrated ability to raise debt and equity for a project of the magnitude
proposed
Significant financial resources to support a guaranty of completion in
accordance with a fixed schedule.
Strength of current relationships with financial institutions
Overall financial track record
Preliminary Development Concept
Compatibility of development concept with the adopted plans for Downtown
Fort Collins, the City of Fort Collins Municipal Code, the City/DDA’s present
objectives
Size, quality and amenities of proposed hotel and meeting facilities
If possible, identification of the brand of the proposed hotel
Additionally, professional firms will be evaluated on the following criteria. These criteria,
coupled with the above, will be the basis for review of the written proposals and optional
interview session. At discretion of the City, interviews of top rated firms may be held.
The rating scale shall be from 1 to 5, with 1 being a poor rating, 3 being an average
rating, and 5 being an outstanding rating.
WEIGHTING
FACTOR
QUALIFICATION STANDARD
2.0 Scope of Proposal
Does the proposal show an understanding of
the project objective, methodology to be used
and results that are desired from the project?
2.0 Assigned
Personnel
Do the persons who will be working on the
project have the necessary skills? Are
sufficient people of the requisite skills assigned
to the project?
1.0 Availability
Can the work be completed in the necessary
time? Can the target start and completion
dates be met? Are other qualified personnel
available to assist in meeting the project
schedule if required? Is the project team
available to attend meetings as required by the
Scope of Work?
1.0 Motivation Is the firm interested and are they capable of
doing the work in the required time frame?
2.0
Cost and
Work Hours
Do the proposed cost and work hours compare
favorably with the project Manager's estimate?
Are the work hours presented reasonable for
the effort required in each project task or
phase?
2.0 Firm Capability
Does the firm have the support capabilities the
assigned personnel require? Has the firm
done previous projects of this type and scope?
VII. REFERENCE EVALUATION (TOP RATED FIRM)
The project Manager will check references using the following criteria. The evaluation
rankings will be labeled Satisfactory/Unsatisfactory.
QUALIFICATION STANDARD
Overall Performance Would you hire this Professional again? Did
they show the skills required by this project?
Timetable
Was the original Scope of Work completed
within the specified time? Were interim
deadlines met in a timely manner?
Completeness
Was the Professional responsive to client needs;
did the Professional anticipate problems? Were
problems solved quickly and effectively?
Budget Was the original Scope of Work completed
within the project budget?
Job Knowledge
a) If a study, did it meet the Scope of Work?
b) If Professional administered a construction
contract, was the project functional upon
completion and did it operate properly?
Were problems corrected quickly and
effectively?
VIII. TENTATIVE SCHEDULE
The following is the tentative schedule for the selection process:
RFQ issued March 28, 2012
Fax/email deadline for written questions April 18, 2012
Presubmittal conference* (attendance strongly recommended) 3:30 PM, April 25, 2012
Qualifications submittals due May 30, 2012
Short list announced June 15, 2012
Interviews June 25, 2012
City/DDA selects developer for exclusive negotiations/MOU early August 2012
*a call-in option will be arranged for those unable to attend
IX. PRESUBMITTAL CONFERENCE
Please note that the City of Fort Collins will host an informational meeting and site tour
for interested parties on April 25, 2012 at 3:30 PM. This meeting will be held in the
Community Room located at 215 N Mason Street, Fort Collins. Attendance in person or
by phone at this informational meeting is not required but is strongly encouraged. To
attend by phone, please use the following:
Dial-in number: (866) 503-4605
Conference code: 9704194372
X. QUESTIONS AND CORRESPONDENCE
All questions regarding the development opportunity or selection process must be
addressed in writing to City Purchasing.
Fort Collins Downtown Hotel RFQ must appear on all correspondence. All questions
can be mailed, faxed or emailed and must be received by the Purchasing office no later
than 5:00 PM on April 18, 2012.
MAIL: City of Fort Collins, Purchasing Dept., PO Box 580, Fort Collins, CO 80522
FAX NUMBER: 970-221-6707
EMAIL: purchasing@fcgov.com
XI. DEADLINE AND DELIVERY
Written proposals, seven (7) copies, will be received at the City of Fort Collins'
Purchasing Division, 215 North Mason St., 2nd floor, Fort Collins, Colorado 80524.
Proposals will be received before 3:00 p.m. (our clock), May 30, 2012 and referenced
as Proposal No. 7370. If delivered, they are to be sent to 215 North Mason Street, 2nd
Floor, Fort Collins, Colorado 80524. If mailed, the address is P.O. Box 580, Fort
Collins, 80522-0580.
XII. SAMPLE PROFESSIONAL SERVICES AGREEMENT
Upon selection, the top rated firm with enter into a professional services agreement with
the City of Fort Collins and the DDA. A sample professional services agreement has
been attached.
PROFESSIONAL SERVICES AGREEMENT
THIS AGREEMENT made and entered into the day and year set forth below, by and
between THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, hereinafter
referred to as the "City" and , hereinafter referred to as "Professional".
WITNESSETH:
In consideration of the mutual covenants and obligations herein expressed, it is agreed
by and between the parties hereto as follows:
1. Scope of Services. The Professional agrees to provide services in accordance
with the scope of services attached hereto as Exhibit "A", consisting of ( ) pages, and
incorporated herein by this reference.
2. The Work Schedule. [Optional] The services to be performed pursuant to this
Agreement shall be performed in accordance with the Work Schedule attached hereto as
Exhibit "B", consisting of ( ) pages, and incorporated herein by this reference.
3. Contract Period. This Agreement shall commence , 20 , and shall
continue in full force and effect until , 20 , unless sooner terminated as herein
provided. In addition, at the option of the City, the Agreement may be extended for additional
one year periods not to exceed four (4) additional one year periods. Renewals and pricing
changes shall be negotiated by and agreed to by both parties. The Denver Boulder Greeley
CPIU published by the Colorado State Planning and Budget Office will be used as a guide.
Written notice of renewal shall be provided to the Professional and mailed no later than ninety
(90) days prior to contract end.
4. Early Termination by City. Notwithstanding the time periods contained herein,
the City may terminate this Agreement at any time without cause by providing written notice of
termination to the Professional. Such notice shall be delivered at least fifteen (15) days prior to
the termination date contained in said notice unless otherwise agreed in writing by the parties.
All notices provided under this Agreement shall be effective when mailed, postage prepaid and
sent to the following addresses:
Professional:
City:
City of Fort Collins
Attn:
PO Box 580
Fort Collins, CO 80522
With Copy to:
City of Fort Collins, Purchasing
PO Box 580
Fort Collins, CO 80522
In the event of any such early termination by the City, the Professional shall be paid for services
rendered prior to the date of termination, subject only to the satisfactory performance of the
Professional's obligations under this Agreement. Such payment shall be the Professional's sole
right and remedy for such termination.
4. Design, Project Indemnity and Insurance Responsibility. The Professional shall
be responsible for the professional quality, technical accuracy, timely completion and the
coordination of all services rendered by the Professional, including but not limited to designs,
plans, reports, specifications, and drawings and shall, without additional compensation,
promptly remedy and correct any errors, omissions, or other deficiencies. The Professional
shall indemnify, save and hold harmless the City, its officers and employees in accordance with
Colorado law, from all damages whatsoever claimed by third parties against the City; and for the
City's costs and reasonable attorneys fees, arising directly or indirectly out of the Professional's
negligent performance of any of the services furnished under this Agreement. The Professional
shall maintain commercial general liability insurance in the amount of $500,000 combined single
limits and errors and omissions insurance in the amount of $ .
5. Compensation. [Use this paragraph or Option 1 below.] In consideration of
the services to be performed pursuant to this Agreement, the City agrees to pay Professional a
fixed fee in the amount of ($ ) plus reimbursable direct costs. All such fees and
costs shall not exceed ($ ). Monthly partial payments based upon the Professional's
billings and itemized statements are permissible. The amounts of all such partial payments
shall be based upon the Professional's City-verified progress in completing the services to be
performed pursuant hereto and upon the City's approval of the Professional's actual
reimbursable expenses. [Optional] Insert Subcontractor Clause Final payment shall be made
following acceptance of the work by the City. Upon final payment, all designs, plans, reports,
specifications, drawings, and other services rendered by the Professional shall become the sole
property of the City.
6. Compensation. [Option 1] In consideration of the services to be performed
pursuant to this Agreement, the City agrees to pay Professional on a time and reimbursable
direct cost basis according to the following schedule:
Hourly billing rates:
Reimbursable direct costs:
with maximum compensation (for both Professional's time and reimbursable direct costs) not to
exceed ($ ). Monthly partial payments based upon the Professional's billings and
itemized statements of reimbursable direct costs are permissible. The amounts of all such
partial payments shall be based upon the Professional's City-verified progress in completing the
services to be performed pursuant hereto and upon the City's approval of the Professional's
reimbursable direct costs. Final payment shall be made following acceptance of the work by the
City. Upon final payment, all designs, plans, reports, specifications, drawings and other
services rendered by the Professional shall become the sole property of the City.
6. City Representative. The City will designate, prior to commencement of work, its
project representative who shall make, within the scope of his or her authority, all necessary and
proper decisions with reference to the project. All requests for contract interpretations, change
orders, and other clarification or instruction shall be directed to the City Representative.
7. Project Drawings. [Optional] Upon conclusion of the project and before final
payment, the Professional shall provide the City with reproducible drawings of the project
containing accurate information on the project as constructed. Drawings shall be of archival,
prepared on stable Mylar base material using a non-fading process to provide for long storage
and high quality reproduction. "CD" disc of the as-built drawings shall also be submitted to the
City in an AutoCAD version no older then the established city standard.
8. Monthly Report. Commencing thirty (30) days after the date of execution of this
Agreement and every thirty (30) days thereafter, Professional is required to provide the City
Representative with a written report of the status of the work with respect to the Scope of
Services, Work Schedule, and other material information. Failure to provide any required
monthly report may, at the option of the City, suspend the processing of any partial payment
request.
9. Independent Contractor. The services to be performed by Professional are those
of an independent contractor and not of an employee of the City of Fort Collins. The City shall
not be responsible for withholding any portion of Professional's compensation hereunder for the
payment of FICA, Workers' Compensation, other taxes or benefits or for any other purpose.
10. Personal Services. It is understood that the City enters into this Agreement
based on the special abilities of the Professional and that this Agreement shall be considered as
an agreement for personal services. Accordingly, the Professional shall neither assign any
responsibilities nor delegate any duties arising under this Agreement without the prior written
consent of the City.
11. Acceptance Not Waiver. The City's approval of drawings, designs, plans,
specifications, reports, and incidental work or materials furnished hereunder shall not in any way
relieve the Professional of responsibility for the quality or technical accuracy of the work. The
City's approval or acceptance of, or payment for, any of the services shall not be construed to
operate as a waiver of any rights or benefits provided to the City under this Agreement.
12. Default. Each and every term and condition hereof shall be deemed to be a
material element of this Agreement. In the event either party should fail or refuse to perform
according to the terms of this agreement, such party may be declared in default.
13. Remedies. In the event a party has been declared in default, such defaulting
party shall be allowed a period of ten (10) days within which to cure said default. In the event
the default remains uncorrected, the party declaring default may elect to (a) terminate the
Agreement and seek damages; (b) treat the Agreement as continuing and require specific
performance; or (c) avail himself of any other remedy at law or equity. If the non-defaulting
party commences legal or equitable actions against the defaulting party, the defaulting party
shall be liable to the non-defaulting party for the non-defaulting party's reasonable attorney fees
and costs incurred because of the default.
14. Binding Effect. This writing, together with the exhibits hereto, constitutes the
entire agreement between the parties and shall be binding upon said parties, their officers,
employees, agents and assigns and shall inure to the benefit of the respective survivors, heirs,
personal representatives, successors and assigns of said parties.
15. Law/Severability. The laws of the State of Colorado shall govern the
construction, interpretation, execution and enforcement of this Agreement. In the event any
provision of this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this
Agreement.
16. Prohibition Against Employing Illegal Aliens. Pursuant to Section 8-17.5-101,
C.R.S., et. seq., Professional represents and agrees that:
a. As of the date of this Agreement:
1. Professional does not knowingly employ or contract with an illegal alien
who will perform work under this Agreement; and
2. Professional will participate in either the e-Verify program created in
Public Law 208, 104th Congress, as amended, and expanded in Public Law 156,
108th Congress, as amended, administered by the United States Department of
Homeland Security (the “e-Verify Program”) or the Department Program (the
“Department Program”), an employment verification program established
pursuant to Section 8-17.5-102(5)(c) C.R.S. in order to confirm the employment
eligibility of all newly hired employees to perform work under this Agreement.
b. Professional shall not knowingly employ or contract with an illegal alien to
perform work under this Agreement or knowingly enter into a contract with a
subcontractor that knowingly employs or contracts with an illegal alien to perform work
under this Agreement.
c. Professional is prohibited from using the e-Verify Program or Department
Program procedures to undertake pre-employment screening of job applicants while this
Agreement is being performed.
d. If Professional obtains actual knowledge that a subcontractor performing work
under this Agreement knowingly employs or contracts with an illegal alien, Professional
shall:
1. Notify such subcontractor and the City within three days that Professional
has actual knowledge that the subcontractor is employing or contracting with an
illegal alien; and
2. Terminate the subcontract with the subcontractor if within three days of
receiving the notice required pursuant to this section the subcontractor does not
cease employing or contracting with the illegal alien; except that Professional
shall not terminate the contract with the subcontractor if during such three days
the subcontractor provides information to establish that the subcontractor has not
knowingly employed or contracted with an illegal alien.
e. Professional shall comply with any reasonable request by the Colorado
Department of Labor and Employment (the “Department”) made in the course of an
investigation that the Department undertakes or is undertaking pursuant to the authority
established in Subsection 8-17.5-102 (5), C.R.S.
f. If Professional violates any provision of this Agreement pertaining to the duties
imposed by Subsection 8-17.5-102, C.R.S. the City may terminate this Agreement. If this
Agreement is so terminated, Professional shall be liable for actual and consequential
damages to the City arising out of Professional’s violation of Subsection 8-17.5-102,
C.R.S.
g. The City will notify the Office of the Secretary of State if Professional violates this
provision of this Agreement and the City terminates the Agreement for such breach.
17. Special Provisions. Special provisions or conditions relating to the services to be
performed pursuant to this Agreement are set forth in Exhibit “ “ - Confidentiality, consisting of
one (1) page, attached hereto and incorporated herein by this reference.
THE CITY OF FORT COLLINS, COLORADO
By: _________________________________
James B. O'Neill II, CPPO, FNIGP
Director of Purchasing & Risk Management
DATE: ______________________________
ATTEST:
_________________________________
City Clerk
APPROVED AS TO FORM:
________________________________
Assistant City Attorney
[Insert Professional's name] or
[Insert Partnership Name] or
[Insert individual's name] or
Doing business as [insert name of business]
By: __________________________________
Title: _______________________________
CORPORATE PRESIDENT OR VICE PRESIDENT
Date: _______________________________
ATTEST:
_________________________________ (Corporate Seal)
Corporate Secretary
EXHIBIT “ ”
CONFIDENTIALITY
IN CONNECTION WITH SERVICES provided to the City of Fort Collins (the “City”) pursuant to
this Agreement (the “Agreement”), the Professional hereby acknowledges that it has been
informed that the City has established policies and procedures with regard to the handling of
confidential information and other sensitive materials.
In consideration of access to certain information, data and material (hereinafter individually and
collectively, regardless of nature, referred to as “information”) that are the property of and/or
relate to the City or its employees, customers or suppliers, which access is related to the
performance of services that the Professional has agreed to perform, the Professional hereby
acknowledges and agrees as follows:
That information that has or will come into its possession or knowledge in connection with the
performance of services for the City may be confidential and/or proprietary. The Professional
agrees to treat as confidential (a) all information that is owned by the City, or that relates to the
business of the City , or that is used by the City in carrying on business, and (b) all information
that is proprietary to a third party (including but not limited to customers and suppliers of the
City) . The Professional shall not disclose any such information to any person not having a
legitimate need-to-know for purposes authorized by the City. Further, the Professional shall not
use such information to obtain any economic or other benefit for itself, or any third party, except
as specifically authorized by the City.
The foregoing to the contrary notwithstanding, the Professional understands that it shall have no
obligation under this Agreement with respect to information and material that (a) becomes
generally known to the public by publication or some means other than a breach of duty of this
Agreement, or (b) is required by law, regulation or court order to be disclosed, provided that the
request for such disclosure is proper and the disclosure does not exceed that which is required.
In the event of any disclosure under (b) above, the Professional shall furnish a copy of this
Agreement to anyone to whom it is required to make such disclosure and shall promptly advise
the City in writing of each such disclosure.
In the event that the Professional ceases to perform services for the City, or the City so requests
for any reason, the Professional shall promptly return to the City any and all information
described hereinabove, including all copies, notes and/or summaries (handwritten or
mechanically produced) thereof, in its possession or control or as to which it otherwise has
access.
The Professional understands and agrees that the City’s remedies at law for a breach of the
Professional’s obligations under this Confidentiality Agreement may be inadequate and that the
City shall, in the event of any such breach, be entitled to seek equitable relief (including without
limitation preliminary and permanent injunctive relief and specific performance) in addition to all
other remedies provided hereunder or available at law.
OldTownFortCollinsHotelMarketStudyභ1
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
OldTownFortCollins
HotelMarketStudy
May2010
PreparedFor:
FortCollins
DowntownDevelopmentAuthority
19OldTownSquare,Suite230
FortCollins,Colorado80524
970.484.2020
PreparedBy:
RRCAssociates
4940PearlEastCircle,Suite103
Boulder,Colorado80301
303.449.6558
OldTownFortCollinsHotelMarketStudyභ2
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
TableofContents
SECTION1–ExecutiveSummary................................................................3
ProductScenarios.....................................................................................4
SECTION2–PremisesoftheAssignment................................................8
GeneralAssumptions&LimitingConditions...........................................8
Purpose&IntendedUse...........................................................................8
EffectiveDate............................................................................................9
ScopeofWork...........................................................................................9
Methodology............................................................................................9
SECTION3–MarketAreaAnalysis..........................................................10
FortCollinsOverview.............................................................................10
OldTownNeighborhood........................................................................11
MarketInfluences...................................................................................13
Outlook...................................................................................................23
SECTION4–Supply&DemandOverview..............................................24
CompetitiveSupply................................................................................24
MarketTrends........................................................................................27
MarketSegmentation.............................................................................35
LatentDemand.......................................................................................37
MarketPerformanceForecast...............................................................38
SECTION5–DevelopmentScenarios......................................................41
UpscaleBoutiqueHotelwithConferenceFacilities..............................41
SelectͲServiceHotel................................................................................42
SmallBoutiqueHotel..............................................................................42
Branding..................................................................................................43
PerformanceProjections........................................................................44
DevelopmentCosts.................................................................................48
InvestmentReturns................................................................................50
EconomicImpact.....................................................................................51
Conclusion...............................................................................................57
OldTownFortCollinsHotelMarketStudyභ3
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
1.ExecutiveSummary
Fort Collins possesses many of the attributes and features that appeal to hotel developers.The diverse
economy and macro trends bode well for the community’s future. However, the local lodging market
experiencedsignificantsupplygrowthduringthepreviouseconomiccycle.Overthecourseofthepastfiveyears
alone,supplyincreasedmorethan50%.Coupledwithdeclineofcorporatedemandcreatedbytheeconomic
downturn,thenewsupplyhasyettobeabsorbedandoccupancyamongthemajorcompetitorsdroppedbelow
50% in2009.Whilemanytrendspointtoarecoverybeginningbylate2010, itwilltakeseveralyearsbefore
demandreboundstoalevelwhereoccupanciesreturntohistoricallevels.
TheFortCollinsmarketclearlyhasanimbalanceinitslodgingproductoffering.BeginninginthemidͲ1990s,new
limitedͲservicebrandswereconstructedinthearea,primarilyonthesouthsideofFortCollinsalongHarmony
Road. The two fullͲservice hotels which were developed in the 1980s have had some of their demand base
siphonedbythenewcompetitorsduetotheirnewfacilitiesandlowerratestructures.Incomparisontomost
othersimilarmarkets,FortCollinsisoversuppliedwithlimitedͲservicehotelroomsand/orundersuppliedwith
fullͲserviceguestrooms.
TheArmstrongHotel,whichreopenedin2005,istheonlyhotelinOldTownFortCollins.Basedonouranalysis
of similar hotel markets, downtown lodging facilities typically outperform the greater market due to their
locationandsurroundingamenities.Therefore,anewhotelindowntownFortCollinswouldalsolikelyleadthe
marketinRevPAR,primarilydrivenbyahigheraveragerate.Thehotelwouldhavegreaterdifficultyattracting
pricesensitivedemand,particularlycorporatetravelersdoingbusinessalongHarmonyRoad.However,thehotel
would likely appeal tohighͲendcorporateandleisuredemand, and could attract significant groupdemandif
programmedwiththepropereventfacilities.ItslocationproximatetoCSU,thelargestdemandgeneratorinthe
city,wouldalsobeabenefit.
However,theleveltowhichanewhotelinOldTowncouldoutperformtheFortCollinsmarketwouldnotoffset
the higher cost to develop a hotel in Old Town given capitalmarketstressandlandcosttoday. The smaller
parcelsinOldTownwouldinvolvemoreverticalconstructionandwouldlikelyrequireanundergroundparking
structure.Additionally,theexteriorfaçadewouldbehigherqualitytocomplementtheOldTownneighborhood.
Moreover,improvedsoundproofingmaybenecessaryduetothetrainnoisealongMasonStreet.
Theabilitytofinanceaprojectinthecurrentenvironmentrequiresestimatingreturnsandassessingriskrelative
totheprojectcost.Despiteimprovedstabilityamongnationalfinancialinstitutions,thefinancialmarketsare
stillindisarray.Commerciallendingisatastandstillanddevelopmentfinancingisextremelydifficulttoobtain.
Moreover,termsonthoseloansthatarebeingoriginatedareextremelystringentandnotveryfavorabletothe
borrower.Thedebtmarketsareanticipatedtoloosenoverthenextfewyears,buttheloantermswilllikelybe
lessflexiblethanseeninthepreviouscycle.Nevertheless,giventhelargegapinrequiredreturnrelativetocost
forapotentialhotelinOldTownFortCollins,thedevelopmentwouldstillrequirefinancialincentivetoattract
aninvestor.
Inordertoaccuratelyunderstandthevalueofprovidingfinancialincentivestoahoteldeveloper,the
Cityshouldweighthepositivebenefitsandthenegativeeffectsforeachdevelopmentscenarioover
boththeshortandlongterm.
OldTownFortCollinsHotelMarketStudyභ4
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
ProductScenarios
In reviewing various scenarios that meet the needs of the city to varying degrees, we have identified three
product scenarios for the City to consider and evaluate. A summary of their key risks and benefits is shown
below.
OldTown Impacton Total Developer Public Economic
Scenario Synergy Market Cost Interest Investment Risk Impact
UpscaleBrandedBoutique z {z zzz
SelectͲService {zz {{{
SmallUpscaleBoutique z {{{{
Scale advantage z{z disadvantage
Thetablebelowdetailstherangesofkeyroomrevenuestatisticsonastabilizedlevel.
StabilizedPerformance(2010$s)
Scenario Occupancy ADR RevPAR
UpscaleBrandedBoutique High 70.0% $170.00 $119.00
Low 66.0% 140.00 92.40
SelectͲService High 76.0% 120.00 91.20
Low 72.0% 105.00 75.60
SmallUpscaleBoutique High 74.0% 170.00 125.80
Low 70.0% 140.00 98.00
Abriefdescriptionoftherisksandbenefitsassociatedwitheachscenarioisdiscussedbelowalongwiththeir
respectiverangesofcostsandnecessarypublicincentives.
UpscaleBoutiqueHotelwithConferenceFacilities
Anupscaleproductwouldallowforauniquelodgingproductwithdesignandarchitecturalfeaturesthatshould
becomplementarytoOldTownFortCollins.Inordertoprovideincrementaleconomicimpacttothecity,aswell
as minimize the impact to existing hotels in the market, this product would have a conference facility
componentwithapproximately15,000 to20,000 square feetoffunctionspace.Givenitsmarketorientation,
thispropertywouldcompetemostdirectlywiththeHiltonandMarriott.Inordertoprovideanaddedamenity
tothecity,themeetingspaceshouldincludealargeballroomofapproximately12,000to15,000squarefeet
whichwouldbethelargesteventspaceinthecity.Thiswouldallowthehotelandthecitytoattractgroupsthat
previouslywouldnothaveconsideredFortCollinsasavenue.Inordertoinducemaximummeetingdemandand
lowertheriskprofiletoinvestors,thepropertyshouldbebrandedwithanationalmoniker,suchasWestinor
Renaissance. The hotel could house approximately 180 guest rooms in order to accommodate large groups,
providetheeconomiesnecessarytobeefficientlyoperatedbyamajorhotelmanagementcompany,andmeet
OldTownFortCollinsHotelMarketStudyභ5
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
thesizerequirementsnecessaryforamajorbrandaffiliation.Anupscalebrandedproductwouldprovidethe
mostpositiveeconomicimpacttothecity,butwouldalsorequireahighfinancialincentiveduetothehighcost
and risk in the marketplace. The chart below shows the annual revenue, net operating income, external
economicimpact,andtaxespotentiallygeneratedbytheupscalepropertyonastabilizedbasis.
$0
$2
$4
$6
$8
$10
$12
Revenue NOI Add'lEconImpact Taxes
Millions
Thechartbelowillustratestheestimatedrangeofdevelopmentcostsforanupscalebrandedboutiquehotel
with conference facilities compared with the necessary share of public incentives and private investment to
createafeasibleproject.
PublicIncentivePrivateInvestment
$0 $10 $20 $30 $40 $50 $60
Millions
DevelopmentCost
OldTownFortCollinsHotelMarketStudyභ6
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
SelectͲServiceHotel
A selectͲservice product would be the most cost efficient development for Old Town Fort Collins.Whilethe
productwouldbeverysimilartootherlimitedͲservicehotelsinthemarket,thepropertycouldbedifferentiated
with unique architectural features and a distinct leased restaurant concept. The selectͲservice product is
recommendedtohaveapproximately150roomsandonlyincludeasmallamountofmeetingspace(1,500to
2,500squarefeet),asmostlimitedͲservicehotelsarenotoperationallystructuredformarketingalargemeeting
andbanquetfacility.ThepropertywouldlikelybebrandedwithafirstͲtierselectͲservicebrand,suchasHyatt
Placeoraloft.Becauseofitssimilarfacilitiesprogram,thehotelwouldcompetedirectlywithmostotherhotels
in Fort Collins and would not induce new demand to the market. However, a selectͲservice product would
requirelesspublicassistance,astherearecurrentlydevelopersconsideringsuchaproductinFortCollinsand
debtismorereadilyavailableforthistypeofproject.
$0
$2
$4
$6
$8
$10
$12
Revenue NOI Add'lEconImpact Taxes
Millions
The chart below illustrates the estimated range of development costs for a selectͲservice hotel in Old Town
comparedwiththerequiredshareofpublicincentivesandprivateinvestmenttocreateafeasibleproject.
PublicIncentivePrivateInvestment
$0 $10 $20 $30 $40 $50 $60
Millions
DevelopmentCost
OldTownFortCollinsHotelMarketStudyභ7
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
SmallUpscaleBoutiqueHotel
A scaled down version of the upscale boutique productmentionedaboveisanotherpossibility. This product
wouldbebettersuitedtoexcludethelargemeetingspacecomponentandonlyhouse90unitsandarestaurant.
ThiswouldbecomplementarytotheOldTownneighborhoodandcompetemostdirectlywiththeArmstrong
Hotel.Becauseofitssize,thisproductwouldnothaveasignificantimpactonthelodgingmarket,butitwould
alsonotinducemuchnewdemandtothecity.Possessingonly90unitswouldlimitthedevelopment’sappealto
many national operators, and would likely prohibit the ability to affiliate with a major national brand.
Nevertheless, the property’s cost would bemuchlowerthanthelargerupscalehotelscenario, reducing the
amount of public incentives. The stabilized revenue, net income, addition economic impact, and taxes are
showninthefollowingchart.
$0
$2
$4
$6
$8
$10
$12
Revenue NOI Add'lEconImpact Taxes
Millions
Thechartbelowillustratestheestimatedrangeofdevelopmentcostsforasmallboutiquehotelcomparedwith
thenecessaryshareofpublicincentivesandprivateinvestmenttocreateafeasibleproject.
PublicIncentivePrivateInvestment
$0 $10 $20 $30 $40 $50 $60
Millions
DevelopmentCost
OldTownFortCollinsHotelMarketStudyභ8
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
2.PremisesoftheAssignment
The subject of the market study is the Fort Collins lodging market and the potential for development of a
downtownlodgingfacility.Theanalysisincludestheevaluationofproductalternatives.Theevaluationincludes,
but is not limited to, appropriate branding, cash flow potential, risk assessment, synergy with the Old Town
neighborhood,andeconomicimpacttotheCityofFortCollins.
GeneralAssumptions&LimitingConditions
Thisreporthasbeenpreparedwiththefollowinggeneralassumptions:
1. Responsibleownershipandcompetentpropertymanagementareassumed.
2. The information furnished by others is believed to be reliable, but no warranty is given for its
accuracy.
3. It is assumed that there are no hidden or unapparent conditions of the property, subsoil, or
structuresthatrenderitmoreorlessvaluable.Noresponsibilityisassumedforsuchconditionsor
forobtainingtheengineeringstudiesthatmayberequiredtodiscoverthem.
4. Itisassumedthattheproposedpropertywillbeinfullcompliancewithallapplicablefederal,state,
andlocalenvironmentalregulationsandlawsunlessthelackofcomplianceisstated,described,and
consideredinthereport.
5. Itisassumedthattheproposedpropertywillconformtoallapplicablezoninganduseregulations
and restrictions unless a nonconformity has been identified, described, and considered in the
report.
6. Itisassumedthatallrequiredlicenses,certificatesofoccupancy,consents,andotherlegislativeor
administrative authority from any local, state, or national government or private entity or
organization have been or can be obtained for any use on which the opinions and conclusions
containedinthisreportarebased.
7. Anyproposedimprovementsareassumedtohavebeencompletedunlessotherwisestipulated.
Thereporthasbeenpreparedwiththefollowinggenerallimitingconditions:
1. Possessionofthisreport,oracopythereof,doesnotcarrywithittherightofpublication.
2. The forecasts, projections, or operating estimates contained herein are based on current market
conditions,anticipatedshortͲtermsupplyanddemandfactors,andanationaleconomicrecovery.
Theseforecastsare,therefore,subjecttochangeswithfutureconsiderations.
Purpose&IntendedUse
ThepurposeofthisreportistoinvestigatethesupplyanddemandfactorsintheFortCollinslodgingmarketin
ordertodeveloparecommendationregardingthepotentialdevelopmentofalodgingfacilityintheOldTown
neighborhood.
This report is intended for use by the Downtown Development Authority and the City of Fort Collins in
connectionwithgeneralbusinessdecisionsrelatedtothepotentialdevelopment.
OldTownFortCollinsHotelMarketStudyභ9
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
EffectiveDateoftheReport
TheeffectivedateoftheopinionsdiscussedinthisreportisMay1,2010.
ScopeofWork
All information was collected and analyzed by the staff of RRC Associates and STR Analytics. We have
investigated themarketareaandhavespokenwithlocalbusinesspeople,hoteliers,developers, lenders,real
estate investors, and public officials. We have inspected the competitive lodging facilities and analyzed the
economicdatadescribedinthisreport.Ourconclusionsarebasedonourinvestigationandanalysis.
Methodology
x TheexistingsupplyoflodgingfacilitiesinFortCollinsandthesurroundingcommunitieswasevaluated.
WedeterminedthecompetitivenessofeachhotelwithapotentialhoteldevelopmentinOldTownFort
Collins.Weanalyzedthepositiveattributesand/ormissingcomponentsofeachthatcouldpotentially
beincorporatedintotheproposedproject.
x Thestatusofotherproposedlodgingdevelopmentsintheareawerethoroughlyresearchedandtheir
impact on the proposed project was quantified. We investigated other potential sites for the
developmentofhotelandresortfacilities.
x ThedemandbaseinFortCollinswasinvestigated,particularlyasitrelatestoColoradoStateUniversity.
Theroomnightdemandlevelsgeneratedbythemajordemanddriverswerecalculatedandtheirneeds
forlodgingaccommodationswereevaluated.
x FollowingastudyofeconomictrendsinFortCollinsandthenorthernColoradoregion,demandgrowth
forthecompetitivehotelmarketwasforecast.
x WeanalyzedcurrentandrecentdowntownhotelprojectsincommunitiessimilartoFortCollins.
x Wedeterminedthebestpotentialbrandingandpositioningscenariosthatnotonlywouldenhancethe
proposedhotel’sperformance,butwouldalsocomplementthecharacterofOldTownFortCollins.
x Based on the market orientation determined to be most suitable and cohesive with downtown Fort
Collins,weevaluatedthepotentialinvestmentscenariosfortheproject.
x Incomeandexpenseprojectionsforthevariousscenariosdrivenbyourfindingsareestimatedinour
marketinvestigation.Basedontheoperationsofsimilarproperties,aproformawaspreparedforeach
scenario.
x We reviewed and evaluated the development costs of other lodging facilities comparable to the
proposedproject.
x Utilizingvariousdevelopmentscenariosandanalyses,werecommendedthesize,facilitiesprogram,and
market positioning that would maximize the return potential under the most valid development
scenarios.
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3.MarketAreaAnalysis
A market area is the defined geographic area in which the subject property competes for the attentions of
marketparticipants.Thetermbroadlydefinesanareaofdiverselanduses.Marketareasoftenpassthrougha
fourͲstage life cycle of growth, stability, decline, and revitalization. Some market areas bypass stages in this
cycle.
FortCollinsOverview
Fort Collins is located in northern Colorado, approximately 60 miles north of Denver. It has a population of
approximately 137,200 people. The City of Fort Collins is known for its quality of life, as well as its brewing
industry, new energy economy, and highͲtech companies. It is anchored by the Colorado State University’s
campuswhichissituatedjustsouthoftheOldTownarea.
FortCollinshasgainednotorietyforitshighqualityoflifeandisoftennamedasatopspotforliving,retiring,
anddoingbusiness. It isannuallyrankedasoneofthe“BestPlacestoLive”byMoneyMagazine. Itwasalso
recently listed among “Great Place for Entrepreneurs to Retire” (U.S. News, June 2009) and “Best Places for
BusinessandCareers”(Forbes,March2009).
ThemapbelowshowsFortCollins’locationinnorthernColorado,approximately30milessouthoftheWyoming
border.Cheyenne,Wyoming,isapproximately50milesnorthofdowntownFortCollins;EstesPark,Colorado,
and RockyMountainNationalParkaresituated40milessouthwestofFortCollins; and as previously stated,
Denver,Colorado,isapproximately60milessouth.
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Source:GoogleMaps
OldTownNeighborhood
Aneighborhoodisagroupofcomplementarylanduses;arelatedgroupingofinhabitants,buildings,orbusiness
enterprises. The Old Town Fort Collins neighborhood is characterized by historic buildings, some of which
providedtheinspirationforMainStreetatDisneyWorld.OldTowncentersaroundtheintersectionofCollege
Avenue and Mountain Avenue. Old Town is primarily defined by Maple Street to the north, Jefferson and
PetersonStreetstotheeast,MulberryStreettothesouth,andMeldrumStreettothewest.Themapbelow
outlinesthesubjectneighborhood.
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Source:GoogleEarth
TheOldTownareaisprimarilycommercialinnaturewithnumerousrestaurants,retailstores,banks,andoffices
intheimmediatearea.CollegeAvenueistheprimarynorthͲsouththoroughfareinFortCollins.
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MarketInfluences
MajorEmployers
ThetablebelowliststhetopemployersinFortCollinsandtheirrespectivenumberofemployees.
Company Industry Employees
ColoradoStateUniversity Colleges&Universities 5,265
PoudreValleyHospital GeneralMedical&SurgicalHospitals 3,488
HewlettͲPackard Computer&Software 2,000
WoodwardGovernorCo Turbine&TurbineGeneratorManufacturing 1,100
WoodwardIndustrialControls ConstructionEquipment 1,000
CenterPartnersInc AdvertisingAgencies 1,000
AnheuserͲBuschInc Breweries 750
WalmartSupercenter DepartmentStores 601
AdvancedEnergyIndustriesInc ElectronicComponentManufacturing 500
FrontRangeCommunityCollege JuniorColleges 375
CirculationServicesInc TelemarketingBureaus 350
WaterpikInc MedicalEquipment 350
Albertsons Supermarkets 300
ColoradoStateUniversityTeachingHospital VeterinaryServices 300
NewBelgiumBrewingCo Breweries 300
Source:CityofFortCollins
ColoradoStateUniversityisbyfarthelargestemployerinFortCollinswithover5,000facultyandstaffincluding
the Veterinary Teaching Hospital. The major private sector employers illustrate a diverse set of industries,
includingtechnology,manufacturing,andbrewing.FortCollinsishometoNewBelgiumBrewingCompany,Odell
BrewingCompany,AdvancedEnergyandWaterPik.
ThemapbelowshowsthelocationsofthemajoremployersrelativetoOldTownFortCollins.
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Source:GoogleEarth
Asshowninthemap,themajoremployersaredispersedthroughoutFortCollins.CSU,NewBelgiumBrewing
Company, Circulation Services, and Poudre Valley Hospital are in the general vicinity of the downtown area.
AdvancedEnergy,AnheuserͲBusch,WoodwardGovernor,andWaterPikarealsoinrelativelycloseproximity.
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Unemployment
The tablebelowshowsacomparisonofunemploymentratetrendsforFortCollins, the FortCollinsͲLoveland
MSA,thestate,andthenationfrom1997throughMarch2010.
Fort FortCollinsͲ
Collins LovelandMSA Colorado U.S.
1997 3.5% 3.3% 3.4% 4.9%
1998 3.8% 3.5% 3.5% 4.5%
1999 3.4% 3.2% 3.0% 4.2%
2000 2.9% 2.5% 2.7% 4.0%
2001 3.7% 3.2% 3.8% 4.7%
2002 5.4% 4.7% 5.7% 5.8%
2003 5.9% 5.1% 6.1% 5.9%
2004 5.4% 4.7% 5.6% 5.5%
2005 5.1% 4.5% 5.1% 5.1%
2006 4.6% 4.0% 4.3% 4.6%
2007 4.0% 3.5% 3.9% 4.6%
2008 4.9% 4.3% 4.9% 5.8%
2009 7.0% 6.1% 7.7% 9.3%
Mar
2009 7.8% 6.8% 7.7% 8.6%
2010 8.2% 7.2% 7.7% 9.7%
Source:BureauofLaborStatistics
TheunemploymentratesintheCityofFortCollinsandtheFortͲCollinsͲLovelandMSAhavehistoricallybeenata
comparableleveltothestate.TheunemploymentratefortheStateofColoradohasbeenbelowthenational
unemploymentrateformostofthepast12years.Mostnotably,theunemploymentrateforthecity,MSA,and
stateoverthecourseoftherecentrecessionhasbeenbelowthenationallevel.Theregion’seconomicdiversity,
coupled with a substantial growth in the renewable energy sector, has helped to mitigate the impact of
corporatedownsizingthroughoutColorado.
ColoradoStateUniversity
ColoradoStateUniversity(CSU)islocatedinFortCollins.Themaincampusencompasses582acresjustsouthof
OldTownFortCollins.ThemaincampusincludestheVeterinaryTeachingHospital,whichcomprises101acres.
The university also encompasses a 1,438Ͳacre foothills campus and a 1,575Ͳacre agricultural campus in Fort
Collins,andthe1,177ͲacrePingreeParkcampuslocated25milesnorthwestofthecity.In2009,CSUhad25,413
residentstudents,including21,204undergraduates.Approximately80%ofCSUstudentsareColoradoresidents.
Theschoolalsohas7,341facultyandstaff.Overall,theuniversitycomprisesmorethan35,000peopleandnine
majorcolleges.ThetablebelowshowsthehistoricalenrollmentlevelsatCSU.
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Enrollment ѐ
1997 22,344 —
1998 22,523 0.8%
1999 22,782 1.1%
2000 23,098 1.4%
2001 23,934 3.6%
2002 24,735 3.3%
2003 25,042 1.2%
2004 25,382 1.4%
2005 24,947 (1.7%)
2006 24,670 (1.1%)
2007 24,983 1.3%
2008 25,011 0.1%
2009 25,413 1.6%
CAGR1997Ͳ2009 1.1%
Source:ColoradoStateUniversity
Studentenrollmenthassteadilyincreasedoverthepasttwelveyears,averaging1.1%averageannualgrowth.At
itscurrentpace,CSUwouldsurpass27,000studentsby2016.
Overall,universitysupporthasgrownoverthepastdecade,withsignificantdonationsin2005/06and2007/08.
ThechartbelowillustratesthevolumeofdonationsthatCSUhasreceivedfromalumniandothersourcesover
thepastnineyears.
Alumni Total
Support($M) ѐ Support($M) ѐ
1999/00 3.4 — 30.7 —
2000/01 3.4 0.0% 26.6 (13.4%)
2001/02 2.4 (29.4%) 34.0 27.8%
2002/03 2.3 (4.2%) 39.0 14.7%
2003/04 6.0 160.9% 45.5 16.7%
2004/05 5.2 (13.3%) 58.6 28.8%
2005/06 46.9 801.9% 94.9 61.9%
2006/07 4.0 (91.5%) 52.6 (44.6%)
2007/08 10.9 172.5% 79.5 51.1%
2008/09 3.7 (66.1%) 54.5 (31.4%)
CAGR1999/00Ͳ2008/09 0.9% 6.6%
Source:ColoradoStateUniversity
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Office
TheFortCollinsofficemarketpossessescloseto5.7millionsquarefeetofrentableofficespace.Thehistorical
vacancyratesforFortCollinsareshownbelow.
Vacancy
2000 6.9%
2001 10.0%
2002 11.0%
2003 9.8%
2004 12.3%
2005 12.7%
2006 11.0%
2007 12.6%
2008 14.5%
2009 18.0%
Source:Realtec
OfficevacancyinFortCollinsgenerallyfluctuatedaround10%to12%between2001and2007.However,inthe
currenteconomicenvironmentitroseto18.0%in2009.
Thetablebelowshowsstatisticsforhistoricalofficeleaseratesandabsorptionoverthepastfiveyears.
LeaseRates Net
ClassAClassBMedicalValue Absorption(SF)
2005 16.00 11.00 18.00 8.50 225,609
2006 21.00 11.00 20.00 8.00 67,751
2007 20.00 12.00 20.00 9.00 (23,316)
2008 20.00 13.00 20.00 9.00 98,292
2009 17.00 11.00 19.75 8.00 (209,071)
Source:Realtec
Leaseratesfellacrosstheboardin2009,decliningapproximately15%inClassAandClassBspace.Morethan
200,000squarefeetofspacewasvacatedin2009.However,activityinearly2010bodeswellforarecoveryin
officevacancy.CenterPartners,UniversityofPhoenix,andOtterBoxhaveexpandedtheirspace.Accordingto
SperryVanNess,130,000squarefeetofofficespacewasabsorbedinthefirstquarter.
NewofficeconstructioninFortCollinshasfluctuatedinrecentyears.Thetablebelowshowsthedollarvolume
ofcommercialofficebuildingpermitsissuedinFortCollinsoverthepastfiveyears.
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CommercialBuilding
Permits($M) ѐ
2005 $18.5 —
2006 15.5 (16.2%)
2007 15.6 0.6%
2008 14.1 (9.6%)
2009 6.4 (54.6%)
Source:CityofFortCollins
Thenumberofbuildingpermitshasdeclinedoverthepasttwoyears,largelyduetothefinancialcrisisandthe
economicslowdown.TherearenumerouspotentialdevelopmentandredevelopmentsitesinandaroundOld
TownFortCollins.However,thereareveryfewofficeprojectscurrentlyunderdevelopmentinFortCollins.The
mostrecentprojectwastheMitchellBlock,a45,000ͲsquareͲfootofficebuildingsituatedjusteastofOldTown
Square. It was completed in early 2010. The $12 million project is fully occupied and houses the Bohemian
Foundation,theBohemianCompanies,andCampbellInsuranceAgency.
Retail
TheretailsectorinFortCollinshasgrownoverthepastfewyearswithseveralnewretailprojectsconstructed
alongHarmonyRoad.ThetablebelowshowsthetrendsinleaseratesandabsorptionforretailspaceinFort
Collinsoverthepastfiveyears.
LeaseRates Net
New Prime Secondary Absorption(SF)
2005 $20Ͳ$30 $15Ͳ$20 $10Ͳ$14 (14,280)
2006 $20Ͳ$30 $18Ͳ$24 $12Ͳ$18 95,325
2007 $23Ͳ$32 $20Ͳ$28 $12Ͳ$16 (48,983)
2008 $25Ͳ$32 $20Ͳ$25 $14Ͳ$18 757,555
2009 $25Ͳ$32 $18Ͳ$23 $12Ͳ$16 (64,812)
Source:Realtec
Retailleaseratesfornewspacehaveremainedstrongdespitethesloweconomy.Similartocommercialspace,
vacantretailspaceinprimaryandsecondarylocationssawdeclinesin2009.Morethan750,000squarefeetof
retail spacewasabsorbedin2008. This is largely due tomajortenantslikeTarget, Lowe’s, andOfficeDepot
openingalongHarmonyRoad.
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2005 2006 2007 2008 2009
Total 59,535,181 63,415,944 64,258,714 64,207,783 72,154,162
ȴ —6.5%1.3%(0.1%)12.4%
KeySegments
TotalRetail 39,558,678 39,994,335 42,609,347 41,915,628 47,127,948
ȴ —1.1%6.5%(1.6%)12.4%
TotalRestaurants 280 7,289, 7,566,683 8,081,938 8,491,862 9,771,019
ȴ —3.8%6.8%5.1%15.1%
TotalHotels 279 809, 946,838 1,017,719 1,013,361 871,280
ȴ —17.0%7.5%(0.4%)(14.0%)
Source:CityofFortCollins
Overall,salestaxrevenuegrewmorethan21%overthepastfiveyears.Retailstoresaccountformorethan65%
ofthetotalsalestaxinthecity.Eveninthemidstoftheeconomicrecessionin2009,salestaxfromtheretail
sectorinFortCollinsgrewanimpressive12.4%.Therestaurantbusinessalsoexperiencedstronggrowthover
thepastfewyears, increasing34.0% since2005.Thisispartiallyaresultofnewretailcentersopeningalong
HarmonyRoad.
TheOldTownareaisthelargestsaletaxdistrictintermsofoverallsalestaxgeneration.Approximately16%of
the city’s sales tax revenue is generated by businesses in Old Town. The table below details the sales tax
generatedbytheOldTownarea.
2005 2006 2007 2008 2009
OldTown 9,561,309 9,926,486 10,382,090 10,570,696 11,631,870
ȴ —3.8%4.6%1.8%10.0%
%ofTotalFortCollins 16.1% 15.7% 16.2% 16.5% 16.1%
Retail 5,898,450 6,115,473 6,308,892 6,335,173 6,681,025
ȴ —3.7%3.2%0.4%5.5%
%ofTotalRetail 14.9% 15.3% 14.8% 15.1% 14.2%
Restaurants 1,752,941 1,853,708 2,048,763 2,226,309 2,566,802
ȴ —5.7%10.5%8.7%15.3%
%ofTotalRestaurants 24.0% 24.5% 25.3% 26.2% 26.3%
Hotels 27,785 30,941 37,038 38,217 43,036
ȴ —11.4%19.7%3.2%12.6%
%ofTotalHotels 3.4% 3.3% 3.6% 3.8% 4.9%
Source:CityofFortCollins
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Despitetheeconomicslowdown,salestaxintheOldTowndistricthascontinuedtoincreaseoverthepastfive
years. The retail, restaurant, and hotel segments have all exhibited improvement. Restaurants in Old Town
accountformorethan25%ofallsalestaxgeneratedbyfoodandbeverageoutletsinthecity.Hotelsalestaxis
minimalasitprimaryrelatestotheArmstrongHotel.ThegrowthinsalestaxinFortCollins,andparticularlyin
OldTown,showsunderlyingeconomicstrengthinthemarket.
Thetablebelowshowsthedollarvolumeofretailbuildingpermitsoverthepastfiveyears.
RetailBuilding
Permits($M) ѐ
2005 $4.5 —
2006 2.8 (37.8%)
2007 55.0 1864.3%
2008 14.6 (73.5%)
2009 3.2 (78.1%)
Source:CityofFortCollins
Attheheightofthemarketin2007,retailconstructionpeakedwithapproximately$55.0millioninnewretail
construction permitted. The number of new projects dropped significantly as the financialmarketcrisistook
holdandtheeconomyfellintoarecession.
SimonPropertyGroupiscurrentlybiddingtoacquireGeneralGrowthProperties, theownerofFoothillsMall
located3milessouthofOldTownFortCollins.Theagingmallisinneedofamajorupgradeorredevelopment.
Themall’sdeteriorationhascausedretailoutletsintheimmediateareatorelocateelsewhereinthecityor
shutdownaltogether.ArevitalizationofthemallwouldenhancetheCollegeAvenuecorridorbetweenHarmony
RoadandtheOldTownarea.
Tourism
Fort Collins is a popular summer destination for visitors to northern Colorado. Throughout the summer,
vacationersvisittheareatoparticipateinhiking,camping,bicycling,kayaking,andwhitewaterrafting.Cachela
PoudreRiverisoneofthemostpopularwhitewaterraftingroutesinColorado.
OldTownFortCollinsoffersnumerouseventsandactivitiesthroughouttheyear.Outdoorconcerts,artexhibits,
The Beet Street program is charged with enhancing Fort Collins’ art and cultural activities. Streetmosphere
bringsartists,performers,andentertainerstoOldTownthroughoutthesummer.HomegrownFortCollinsisa
monthlongcelebrationoflocallygrownfoodthatoccurseachfall.
LincolnCenter,thecity’sperformingartsvenue,islocatedjustwestofOldTown.Thefacilityislocatedonthe
westsideofOldTown,threeblockswestofCollegeAvenue.ItwillbeclosinginJune2010toundergoamajor
renovationandisslatedtoreopeninApril2011.
TheFortCollinsMuseum&DiscoveryScienceCenterissituatedinLibraryParkontheeastsideofOldTown.It
hostsmorethan50,000visitorseachyear.AnewstateͲofͲtheͲartfacilityisscheduledtobeconstructedinthe
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next couple of years. It is planned to be located on the north side ofOldTownatCollegeAvenue& Cherry
Street.
FortCollinsiswellknownforitsbeerbrewingindustry.AsidefromAnheuserͲBusch’sfacilityinnorthernFort
Collins, the city is home to several microbreweries, namely New Belgium Brewing Company, Odell Brewing
Company, Fort Collins Brewery, and CooperSmith’s Pub & Brewing. The city also hosts the annual Colorado
Brewers’FestivaleachJunewhichattractsabout30,000toOldTown.NewBelgiumBrewingCompanyholdsthe
TourdeFateventeachfall,attractingapproximately5,000cyclists.
Horsetooth Reservoir which is located on the west side of Fort Collins is a popular destination for boaters,
fishermen,campers,andhikers,particularlyduringthesummermonths.FortCollinsisalsolocatedjust25miles
fromEstesParkandtheentrancetoRockyMountainNationalPark.Thetablebelowshowsvisitationtrendsfor
RockyMountainNationalParksince1996.
Visitors ѐ
1996 3,115,785 —
1997 3,133,523 0.6%
1998 3,258,921 4.0%
1999 3,366,253 3.3%
2000 3,379,644 0.4%
2001 3,318,309 (1.8%)
2002 3,138,066 (5.4%)
2003 3,249,444 3.5%
2004 2,950,645 (9.2%)
2005 2,981,039 1.0%
2006 2,927,921 (1.8%)
2007 3,090,875 5.6%
2008 2,929,750 (5.2%)
2009 2,991,528 2.1%
CAGR1996Ͳ2009 (0.3%)
Source:NationalParkService
VisitationtoRockyMountainNationalParkhasbeensomewhatstableoverthepast14years,fluctuatingmildly
betweenapproximately2.9millionand3.3millionvisitorseachyear.
Transportation
VisitorstravelingtoFortCollinsbyairprimarilyutilizeDenverInternationalAirport(DIA).Theairportislocated
approximately70milessouthofthecity.FortCollins’distancefromamajorairportinhibitsitfromattracting
manyregionalmeetingsandconferences.Thetablebelowshowsthenumberofpassengersthathavetraveled
throughDIAoverthepast14years.
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Passenger
Traffic ѐ
1996 32,264,312 —
1997 34,972,936 8.4%
1998 36,817,520 5.3%
1999 38,034,107 3.3%
2000 38,751,687 1.9%
2001 36,092,806 (6.9%)
2002 35,643,749 (1.2%)
2003 37,505,138 5.2%
2004 42,393,766 13.0%
2005 43,387,513 2.3%
2006 47,325,016 9.1%
2007 49,863,352 5.4%
2008 51,245,334 2.8%
2009 50,167,485 (2.1%)
TTM 50,453,566
FebYTD
2009 7,191,297 —
2010 7,477,378 4.0%
CAGR1996Ͳ2009 3.5%
Source:DenverInternationalAirport
In2009,DIAwasoneofthetoptenbusiestairportsintheworldintermsofpassengervolume.Itiscomprisedof
three concourses. DIA is a major hub for United Airlines and Southwest Airlines, and is the primary hub for
Frontier Airlines. Thirty airlines provide service to and from DIA. More than fifty million passengers travel
throughtheairporteachyear.DenverInternationalAirport(DIA)experiencedsignificantincreasesinpassenger
traffic between 2002 and 2008, largely due to an increase in international flights and Southwest Airlines
increasingitsflightvolumeattheairport.YearͲtoͲdatedatashowssolidimprovementinpassengertraffic,up
4.0%comparedto2007.
ThemajorityofvisitorstoFortCollinstravelbyvehicle.ThosefromoutofstatewhoflyintoDIAtypicallyrent
vehiclesanddrivetoFortCollins.Thecity’sMasonCorridorprojectisanticipatedtoalleviatetrafficcongestion
between Harmony Road and Cherry Street in Old Town Fort Collins. The plan includes new bicycle and
pedestriantrailsaswellasabusrapidtransitsystemtofacilitatetravelbetweenHarmonyRoad,FoothillsMall,
CSU,andOldTown.
OldTownFortCollinsHotelMarketStudyභ23
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MarketOutlook
NumerousfactorspointtoapositivefutureforFortCollins.ThepresenceofCSUprovidesasignificanthubfor
the city’s growth and enhancement. Despite the current economic downturn, Fort Collins has shown solid
growth in the retail and restaurant sectors. The city’s reputation for a good quality of life will continue to
enhanceitsappealtoindividualsandcompaniesconsideringrelocation.
Nevertheless,thefinancialcrisisandeconomicdownturnhasimpactedthecity,albeitnottothesamedegree
seeninmostothercities.Asthenationaleconomyrecovers,thecommercialofficemarketinFortCollins,which
is vital todrivingroomnightdemand, is anticipated to return tohistoricallevelsoverthenextthreetofour
years. The recovery of the city’s commercial room night demand base will be critical to the potential
developmentofanewlodgingfacility.
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4.Supply&DemandOverview
Theexistingandproposedsupplyofcompetitivehotelroomshasadirectimpactontheavailabilityoflodging
demand in the marketplace. Based on our evaluation of rate structure, market orientation, location, chain
affiliation, amenities, reputation and quality level of each area hotel, we have identified the properties
anticipated to be the primary competitors of a proposed lodging facility in Old Town Fort Collins. Additional
lodgingfacilitiesmaycompetewiththeproposedpropertytosomeextentonasecondarylevel.However,the
properties delineated below are considered the core competitors for the demand base that the proposed
propertyisanticipatedtoattract.
CompetitiveSupply
The proposed subject property is located in Old Town Fort Collins. The subject lodging market consists of
economyandselectservicehotelsaswellastwofullͲservicecommercialhotels.Onlyoneotherhotelislocated
inOldTownFortCollinsandveryfewareproximatetoColoradoStateUniversity,theprimarysourceofroom
night demand for the market. The Old Town Fort Collins area is characterized by retail shops, restaurants,
offices,banks,agrocerystore,andasmallhotel.
ArmstrongHotel
TheArmstrongHotelistheonlylodgingfacilityinOldTownFortCollins.Itissituatedatthenorthwestcornerof
South College Avenue and West Olive Street. The historic property was restored and reopened in 2005. It
contains43guestrooms.Onthestreetlevel,thepropertyhasadayspa,acoffeeshop,alounge,adelicatessen,
adessertshop,andarestaurant.ThepropertyisindependentlyownedandoperatedbySteve&MissyLevinger.
Thepropertyhasaboardroom,asmallconferenceroom,andrecentlyopeneda1,060ͲsquareͲfooteventvenue.
AstheonlyhotelinOldTown,theArmstrongisabletocapturethebulkofthedemandbasedonthedowntown
FortCollinsarea.Italsoappealstotravelerswhowantamoreuniqueexperienceandthosewhowanttobe
moreproximatetodowntowndiningoptionsandotherfacilities.Thehotellacksabrandaffiliation,whichmay
detercorporatetravelers.Thehotelalsolacksanyrecreationalamenities.Itslimitedamountofmeetingspace
restrictsitsabilitytocapturemuchgroupdemand.
HiltonFortCollins
TheHiltonFortCollinsislocatedonWestProspectRoadjustsouthofCSU’scampus,approximatelyamilesouth
ofOldTown.Thehotelopenedin1985asaHolidayInn. ItconvertedtoHiltoninMay2005followingan$8
million renovation. The property contains 255 guest rooms, a restaurant, a coffee kiosk, an indoor pool, an
exerciseroom,abusinesscenter,and20,000squarefeetofmeetingspace.Thehotelisownedandmanagedby
JohnQ.HammonsHotels&Resorts,thedeveloperoftheproperty.
Becauseofitslocation,theHiltonattractsalargeportionofCSUdemand,particularlygroupbusiness.TheHilton
andMarriott(describedbelow)aretheonlypropertiesthatarecapableofcateringtolargegroups.TheHilton
canaccommodategroupsupto1,200withaballroomof11,400squarefeet,thelargestmeetingroominthe
FortCollins.
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MarriottFortCollins
TheMarriottFortCollinsislocatedonEastHorsetoothRoad,approximatelythreemilessouthofOldTown.The
Marriott opened in 1985. It contains 229 guest rooms, a restaurant, a lounge, an exercise room, an
indoor/outdoorpool, abusinesscenter, and16,000 square feet ofmeetingspace. The propertyundertooka
guest room renovation in 2008. Integrated Capital acquired the Marriott along with the Courtyard and
ResidenceInninFortCollinsin2006.Thepropertiesreportedlydefaultedontheirloansin2009.
The Marriott is situated just south of Foothills Mall which is nearing the end of its lifecycle. The Marriott’s
performance tends to trail the Hilton due to its inferior location. The Marriott recently acquired the title of
“OfficialHomeoftheRams,”whichwillhelpitcapturealargerportionofCSUdemand.TheHiltonformerlywas
thepreferredhotelofCSU.TheMarriottcompetesdirectlywiththeHiltonforgroupandcateringbusinessin
FortCollins.TheMarriott’s7,260ͲsquareͲfootballroomcanaccommodateupto650people.
SelectͲServiceHotels
Throughthelatterportionofthe1980sandtheearly1990s,theHiltonandMarriottwereabletodominatetheir
marketsegmentbecausetheonlyotherlodgingproductsinFortCollinswereprimarilyeconomyandbudgetin
orientation.BeginningthedevelopmentoftheHamptonInnandCourtyardin1996,newselectͲservicelodging
facilities sprouted up along Harmony Road in the southern part of Fort Collins. These selectͲservice facilities
impactedthedemandbasesatboththeMarriottandtheHiltonduetotheirproximitytoseveralofthemajor
demandgeneratorandtheirratestructure.Duringrobustperiodinthelodgingindustry,namelythelate1990s
andbetween2005and2008,severalnewselectͲservicebrandsenteredtheFortCollinsmarket.
The Hampton Inn, Courtyard, Holiday Inn Express, Residence Inn, and Homewood Suites are clustered
approximatelyfourmilesfromOldTown,whiletheHiltonGardenInnandCambriaSuitesarelocatedclosertoIͲ
25,roughlysevenmilesfromOldTown.HewlettͲPackard(HP),AdvancedMicrodevices(AMD),andIntelhave
facilitiesonHarmonyRoad,andconsequentlythesepropertiescapturethemajorityofthatdemandbase.
ThetablebelowsummarizesthefacilityprogramsofthefullͲserviceandselectͲservicehotelsdescribedabove.
Year Mtg Distfrom
Property Rooms Built Sp(SF) Bllrm(SF) OldTown(mi)
ArmstrongHotel 43 1928 1,750 1,060
HiltonFortCollins 255 1985 20,000 11,400 1
MarriottFortCollins 229 1985 16,000 7,260 3
CourtyardFortCollins 112 1996 896 0 4
HamptonInnFortCollins 75 1996 1,406 0 4
ResidenceInnFortCollins 113 1999 580 0 4
HolidayInnExpress&SuitesFortCollins 89 2005 0 0 4
HiltonGardenInnFortCollins 120 2007 4,900 2,100 7
HomewoodSuitesFortCollins 99 2007 1,300 0 4
CambriaSuitesatPrestonCenter 90 2008 1,000 0 7
ThemapbelowillustratesthelocationofeachcompetitivepropertyincomparisontoOldTownFortCollinsand
theprimarydemanddriversinthearea.
OldTownFortCollinsHotelMarketStudyභ26
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Source:GoogleEarth
In our analysis of the Fort Collins lodging market, there appears to be a disproportionate number of selectͲ
serviceguestroomsversusfullͲserviceguestrooms.WecomparedFortCollins’roomsupplytothoseofother
comparablemarkets.ThesemarketsincludeBoulder,Colorado;Provo,Utah;IowaCity,Iowa;Lincoln,Nebraska;
Eugene, Oregon; Manhattan, Kansas; Normal, Illinois; and Champaign, Illinois. These markets were selected
basedonhotelroomsupply,population,collegeenrollment,andlocationalattributes.
Asthepiechartsbelowillustrate,thenumberoffullͲserviceguestroomsgenerallyovershadowthenumberof
selectͲserviceguestrooms.However,inFortCollins,theratioofroomsisinverted,indicatingthatFortCollinsis
likelyoversuppliedinselectͲserviceproductand/oritisundersuppliedinthefullͲservicelodgingsector.
OldTownFortCollinsHotelMarketStudyභ27
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OtherCompetitors
FortCollinsoftencompeteswithLoveland,theneighboringcommunitytothesouth,forbusinessrelocationand
new development. Over the years, new hotels have been constructed in Loveland that have also either
competedforsomeofFortCollins’roomnightdemandorbenefitedfromoverflowcreatedbytheFortCollins
market.
In2009,theEmbassySuitesLovelandopened.Itislocatedapproximately12milessouthofFortCollins.Aside
fromtheMarriottandHiltoninFortCollins,itistheonlyfullͲservicepropertyalongthenorthernIͲ25corridor
between the Denver metro area and Wyoming. The Embassy Suites contains 263 suites, a restaurant and
lounge, a day spa, an indoor pool, and exercise facility, and a 40,000ͲsquareͲfoot conference center.The
EmbassySuitesissituatedwithinamasterplannedmixedͲusedevelopment,andisadjacenttotheBudweiser
EventsCenter,whichhostssportingeventsandconcerts.TheareasurroundingtheEmbassySuitesisstillinthe
earlydevelopmentstages, and consequently the propertydoesnotcapturemuchcorporatedemand.Witha
28,800ͲsquareͲfootballroom,thepropertyisabletoattractlargegroupsthatpreviouslydidnotconsiderthe
northernColoradoregionfortheirevents.
MarketTrends
The data below was compiled by STR. It shows the historical trends for the competitive set, excluding the
Armstrong Hotel, from 1989 through 2009. The properties included in the trend report are the Hilton Fort
Collins,MarriottFortCollins,CourtyardFortCollins,ResidenceInnFortCollins,HiltonGardenInnFortCollins,
HolidayInnExpress&SuitesFortCollins,HamptonInnFortCollins,HomewoodSuitesFortCollins,andCambria
SuitesatPrestonCenterFortCollins.Theinformationincludesoccupancy,averagerate,RevPAR,occupiedroom
nights,availableroomnights,androomrevenue.
FullͲ
Service
SelectͲ
Service
ComparableMarkets
FullͲ
Service
SelectͲ
Service
FortCollins
OldTownFortCollinsHotelMarketStudyභ28
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HistoricalSupply&DemandTrends
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Occupancy 66.3% 68.7% 67.5% 72.6% 75.2% 75.6% 78.5% 73.1% 71.9% 68.6% 66.2% 72.5% 67.1% 71.1% 69.9% 72.0% 68.9% 67.7% 62.7% 55.7% 48.2%
ѐ 3.6% (1.8%) 7.6% 3.5% 0.6% 3.9% (6.9%) (1.6%) (4.6%) (3.5%) 9.5% (7.5%) 6.1% (1.7%) 3.0% (4.3%) (1.7%) (7.4%) (11.2%) (13.4%)
ADR 54.60 57.19 59.61 63.19 68.34 70.80 75.29 79.42 81.81 88.47 86.62 85.78 87.26 85.48 84.43 85.51 93.10 99.97 106.97 106.77 96.98
ѐ 4.7% 4.2% 6.0% 8.2% 3.6% 6.3% 5.5% 3.0% 8.1% (2.1%) (1.0%) 1.7% (2.0%) (1.2%) 1.3% 8.9% 7.4% 7.0% (0.2%) (9.2%)
RevPAR 36.21 39.29 40.23 45.89 51.38 53.55 59.14 58.05 58.83 60.69 57.32 62.16 58.52 60.80 59.06 61.59 64.13 67.67 67.05 59.42 46.74
ѐ 8.5% 2.4% 14.1% 11.9% 4.2% 10.4% (1.8%) 1.3% 3.2% (5.6%) 8.4% (5.9%) 3.9% (2.9%) 4.3% 4.1% 5.5% (0.9%) (11.4%) (21.3%)
Supply 176,660 176,660 176,660 176,660 176,660 176,660 176,660 176,660 244,915 244,915 259,267 273,385 273,385 273,385 281,960 286,160 294,348 318,645 357,540 409,560 431,430
ѐ 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 38.6% 0.0% 5.9% 5.4% 0.0% 0.0% 3.1% 1.5% 2.9% 8.3% 12.2% 14.5% 5.3%
Demand 117,141 121,368 119,205 128,315 132,805 133,613 138,762 129,120 176,102 168,014 171,563 198,089 183,331 194,449 197,226 206,092 202,778 215,685 224,103 227,929 207,950
ѐ 3.6% (1.8%) 7.6% 3.5% 0.6% 3.9% (6.9%) 36.4% (4.6%) 2.1% 15.5% (7.5%) 6.1% 1.4% 4.5% (1.6%) 6.4% 3.9% 1.7% (8.8%)
RoomRev 6,396,064 6,941,179 7,106,284 8,107,759 9,075,972 9,459,548 10,447,460 10,254,844 14,407,218 14,864,368 14,860,612 16,992,488 15,997,505 16,621,471 16,652,260 17,623,789 18,877,684
21,562,218 23,972,217 24,336,184 20,167,037
ѐ 8.5% 2.4% 14.1% 11.9% 4.2% 10.4% (1.8%) 40.5% 3.2% (0.0%) 14.3% (5.9%) 3.9% 0.2% 5.8% 7.1% 14.2% 11.2% 1.5% (17.1%)
SupplyGrowthPeriod PeakͲTrough TroughͲTrough TroughͲTrough PeakͲTrough PeakͲTrough TroughͲPeak TroughͲPeak
1989Ͳ2009 1996Ͳ2007 1996Ͳ2009 1991Ͳ2001 2001Ͳ2009 2000Ͳ2001 2007Ͳ2009 1991Ͳ2000 2001Ͳ2007
AvgOcc 67.0% 69.0% 65.5% 71.3% 63.5% 69.8% 55.1% 71.8% 68.3%
ADRCAGR 2.9% 2.7% 1.5% 3.9% 1.3% 1.7% (4.8%) 4.1% 3.5%
RevPARCAGR 1.3% 1.3% (1.7%) 3.8% (2.8%) (5.9%) (16.5%) 5.0% 2.3%
SupplyCAGR 4.6% 6.6% 7.1% 4.5% 5.9% (0.0%) 9.8% 5.0% 4.6%
DemandCAGR 2.9% 5.1% 3.7% 4.4% 1.6% (7.5%) (3.7%) 5.8% 3.4%
Source:SmithTravelResearch
OldTownFortCollinsHotelMarketStudyභ29
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Occupancyforthecompetitivesethasaverage67.0%overthepast20years.Occupancypeakedintheearlyto
midͲ1990sinthemidtohigh70%range.Asnewsupplyenteredthemarket,occupancydeclinedbetween1996
and 1999, but regainedmomentumin2000, reaching 72.5%. Following the economic slowdown in 2001 and
2002,thecompetitivemarketagainachievedoccupanciesintherangeof70%andabovein2002through2004.
Asillustratedinthetablesaboveandbelow,occupancyforthecompetitivesethasdeclinedoverthepastfive
years,droppingfromaheightof72.0%in2004to48.2%in2009.Thesharpdeclineinoccupancyisduetothe
economicrecessioncoupledasignificantincreaseinsupplyoverthepastfiveyears.Between2004and2009,
roomsupplyincreasedmorethan50%.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Occupancy
Source:SmithTravelResearch
Over the courseofthepast20years,averagerateforthecompetitivesethasincreasedanaverageof2.9%
annually, which is comparable to the overall rate of inflation during the same time period. Average rate
increased steadily from 1989 through 1998, then remained relative stagnant until 2004. From 2004 through
2007, average rate increased at an aggressive pace between 7.0% and 8.9% annually. In 2008, average rate
remainedstableandthenin2009,itdeclined9.2%whichiscomparabletoorbetterthanmostothersecondary
lodgingmarkets.
OldTownFortCollinsHotelMarketStudyභ30
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$0
$20
$40
$60
$80
$100
$120
AverageRate
Source:SmithTravelResearch
Supplyincreasedanaverageof4.6%annuallybetween1989and2009,whichisaveryhighrateofgrowthfor
hotelrooms.Between1989and1996,theMarriottFortCollinsandtheHiltonFortCollin(formerlyoperatedas
a Holiday Inn) were the primary full service hotels in the Fort Collins market. In the midͲ1990s, new selectͲ
servicebrandsenteredthemarket,namelytheHamptonInnandCourtyardwhichopenedin1996.Duetotheir
newfacilities,pricepoints,andlocationsproximatetodemandgenerators,thesepropertiessiphonedsomeof
thedemandbaseawayfromthefullservicehotels.ThechartbelowillustratesthegrowthinselectͲserviceroom
supply(yellow)comparedtotheroomsupplyoftheHiltonandMarriott(blue).
OldTownFortCollinsHotelMarketStudyභ31
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0
50
100
150
200
250
300
350
400
450
500
AvailableRooms
(000s)
Supply
Hilton/Marriott LimitedͲService
Source:SmithTravelResearch
WhilesupplygrowthinFortCollinshasbeenconsiderablyhigh,particularlyinrecentyears,demandgrowthhas
beenrelativelystrongaswell.Duringthemostrecentrecoverycyclefrom2001until2007,demandgrewatan
averageannualrateof3.4%;supplyincreasedanaverageof4.6%annuallyoverthatperiod.Between1991and
2000,thepreviousgrowthperiod,demandincreasedanaverageof5.8%annually,whichoutpacedthesupply
growththataveraged5.0%annually.
OldTownFortCollinsHotelMarketStudyභ32
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0
50
100
150
200
250
OccupiedRooms
(000s)
Demand
Source:SmithTravelResearch
OldTownFortCollinsHotelMarketStudyභ33
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SeasonalityoftheFortCollinsMarket
ThechartbelowshowstheaveragemonthlyoccupanciesfortheselectͲserviceandfullͲservicehotelsoverthe
past20years.ThechartalsoillustratestheimpactthatthenewerselectͲservicepropertieshavehadonthefullͲ
servicehotelssince1996.Overthecourseofthepast14years, it isobviousthattheplethoraofnewselectͲ
serviceproductshaveimpactedtheoccupancyperformanceofthefullͲservicehotels.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Occupancy
FullͲService1989Ͳ1995 FullͲService1996Ͳ2009 SelectͲService1996Ͳ2009
Source:SmithTravelResearch
Occupancy is exceptionally strong from June through July, with occupancies typically surpassing the 80%
threshold.Withstudentsmovingontocampusandclassesbeginning,Augustisgenerallythestrongestmonth.
SelectͲservicepropertiesgenerallyoutperformthefullͲservicehotelsduringthepeaksummermonthsasthey
areabletocapturemoreofthepriceͲsensitiveguests.
MayandSeptemberarealsorelativelystrongwithoccupanciesatorabove70%.February,March,April,and
Octoberareconsideredtheshoulderseasonswithoccupanciesbetween60%and70%.November,December,
andJanuaryaretheweakestmonthswithoccupanciesinthelow50%range.ThefullͲservicehotelsareableto
outperform the selectͲservicehotelsduringtheshoulderseasonandslowperiodsastheyareabletoattract
moregroupbusiness.
ThechartbelowshowsadailycomparisonofhowtheselectͲserviceandfullͲservicehotelsperformbasedon
ouranalysisofthepast20yearsofmarketdata.
OldTownFortCollinsHotelMarketStudyභ34
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0%
10%
20%
30%
40%
50%
60%
70%
80%
Sun Mon Tues Wed Thu Fri Sat
Occupancy
FullͲService SelectͲService
Source:SmithTravelResearch
Duringatypicalweek,occupanciesarestrongmidͲweek,fromTuesdaythroughThursday.FullͲserviceproperties
are able to outperform the selectͲservice hotels in Fridays and Saturdays as they are able to attract more
weekendgroupbusiness.
OldTownFortCollinsHotelMarketStudyභ35
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MarketSegmentation
Thepurposeofsegmentingthelodgingmarketistoclearlydefinethemajorcomponentsofroomnightdemand,
identifycustomercharacteristics,andestimatefuturegrowth.FoursegmentsweredefinedintheFortCollins
lodgingmarket:corporate,leisure,government,andgroup.Throughouranalysisofeconomicanddemographic
data, as well as interviews with representatives in the local market, we have evaluated each segment and
determinedthepropensityforchangesindemandtrends.
Leisure
Aspreviousmentioned,thetopdemandgeneratorinFortCollinsisCSU.Theuniversityencompassesabroad
rangeofdemandcomponents.Fortheleisuresegment,theseincludeprospectivestudents,incomingstudents,
parentsandfamilies,alumni,andsportsfans.ThekeydemandperiodsareinMayforcommencement,August
formoveͲin, and certainweekendsinSeptember,October, andNovemberforfootballgames.Alumnievents
andothersportingevents,particularlymen’sandwomen’sbasketballcreatesomeadditionaldemand.
Several events in Fort Collins also create demand spikes sporadically throughout the year. The Colorado
Brewers’ Festival isheldeveryJune.TheNewBelgiumBrewing’sTourdeFatoccurseachSeptember.Moby
ArenaonCSU’scampusoftenhostsconcertsandshows.
Roomnightdemandishighestduringthesummermonths,primarilydrivenbytouristsandvacationers. Fort
Collins’reputationandproximitytoEstesParkandRockyMountainNationalParkmakeitafrequentstopfor
touristsandvacationers.
Corporate
ThecorporatesegmentiscomprisedofmanyofthemajoremployersinFortCollins.HewlettPackard,Intel,LSI
Logic,andAdvancedMicroDevicesgenerallyutilizetheselectͲservicepropertiesalongHarmonyRoad,although
some business is captured by the full service hotels. These technology companies have reduced their travel
significantlyandhavebecomeverypriceͲsensitive.Moreover,thistypeofclienteletypicallypreferstostayata
hotel located proximate to their place of business. Thus, the demand capture from these companies is
anticipatedtoberelativelyminimal.
The breweries are located on the north side of Fort Collins, with New Belgium Brewing Company and Odell
Brewing Company situated just outside of Old Town. New Belgium provides some room night demand
throughout the year and generally spreads their business to various lodging facilities at different times.
AnheuserͲBuschissituatedalongIͲ25.SincetheiracquisitionbyInBevinlate2008,AnheuserͲBuschhascutback
ontravelexpenses.Itisunclearwhethertheirpriorlevelofroomnightdemandwillreturn.
Demandfromothermajordemanddrivers,suchastheheadquartersofAdvancedEnergyandWaterPik,has
alsodeclinedinthepastcoupleofyears.Meanwhile,WoodwardGovernorandWoodwardIndustrialControls
appear to havemaintainedafairlystronglevelofdemand.CSUalsoattractssomecorporatedemandinthe
formofguestlecturers,donors,recruiters,andotherpartnersintheprivatesector.
OldTownFortCollinsHotelMarketStudyභ36
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As the national economy recovers in the coming years, corporate travel is anticipated to rebound. Whether
corporate travel levels will return to their historical levels, and how quickly such as rebound might occur,
remainstobeseen.However,giventhestrengthofthecompaniesintheFortCollinsarea,weanticipatethat
corporatedemandwillbegintogrowagaininthelatterhalfof2010andreturntohistoricallevelsby2014.
Government
TheUnitedStatesgovernmenthasnumerousregionalfacilitieslocatedinFortCollins.TheCenterforDisease
ControlandNationalWildlifeResearchCenteraresituatedonthewestsideofFortCollins.TheColoradoState
ForestServicehasanofficeinthatareaaswell.TheU.S.ForestService,U.S.DepartmentofAgriculture,andU.S.
Geological Survey also have offices in the city. The Larimer County Courthouse and other city and county
governmentofficesarelocatedindowntownFortCollins.ThecurrentgovernmentperdiemrateinFortCollins
is$90.Thisisbelowthepriorrateof$93.Astheeconomyreboundsinthecomingyears,theperdiemrateis
expectedtoincreaseagain.
Group
Asfarasgroupbusinessisconcerned,theHiltonandMarriottareessentialtheonlyhotelsinthemarketcapable
ofaccommodatinglargeeventsthatrequirefunctionspaceandcatering.ThenewEmbassySuitesLovelandis
capableofaccommodatinglargegroupsaswell,butitslocationprohibitsitfromattractingmuchbusinessfrom
Fort Collins. The one exception has been the Poudre Valley Hospital Foundation’s annual fundraising dinner
whichmovedtotheEmbassySuitesthispastyear.However,thiseventreportedlydoesnotproducemuchin
termsofroomnights.
Throughouttheyear,thereareeventsinFortCollinsthatproducegrouproomnightsatvarioushotels,butmay
notnecessarilyrequiremeetingspace.TheseincludesportsteamscompetingwithCSU, family reunions,and
weddings.
WalkerManufacturingislocatedinsoutheastFortCollins.Thelawnmowermanufacturerhasalargecelebration
inFortCollinsasthecompanyreachescertainsalesmilestones.Theseeventsoccuronceeveryfewyearsand
bringpeoplefromalloverthecountrytoFortCollins.
TheFortCollinsConvention&VisitorsBureaucompeteswithotherColoradocitiestohostmeetings,events,and
tournaments. Most recently the city competed to host the Triple Crown baseball tournament. However,
representativesoftheFortCollins’tourismindustryindicatethatthecityisunabletocompeteformanyevents
becauseofinsufficientmeetingspace.
OldTownFortCollinsHotelMarketStudyභ37
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LatentDemand
Latentdemandisdemandthatexistswithinthemarket,butiscurrentlyturnedawaybytheexistinglodging
facilities.
TurnawayDemand
Turnaway demand is demand that is currently not accommodated by the existing supply. Such demandmay
seekcomparablealternativelodgingfacilitiesoutsidethemarketareaorlessdesirablelodgingfacilitieswithin
the market area. Based on our interviews with competitive hotels and demand sources, lodging facilities in
LovelandaresometimesutilizedtoaccommodateFortCollinsbaseddemandduetothelackofsufficientsupply
inthemarketduringpeakperiods.Withthehighoccupanciesachievedbymanyofthecompetitivehotelsfrom
MaythroughSeptember,turnawaydemandlikelyexistsintheFortCollinsmarket.Itisimportanttonotethat
duetodemandseasonalitywithinthemarket,theexistenceofturnawaydemanddoesnotinitselfjustifythe
needfornewsupply.
Generally,whenmarketͲwideoccupancyexceeds70%,thereisahighlikelihoodofturnawaydemand.TheFort
Collinsmarkethassurpassedthe70%rangeonanannualbasistwiceinthepasteightyears,whichissignificant
given the large amount of new demand that has entered themarketinthatperiod. The Fort Collinsmarket
typicallysurpassesthe70%rangefromMaythroughSeptember,andoftenachievesoccupanciesinexcessof
80% from June through August. The extremely strong occupancies in the summer months are indications of
turnawaydemand.Turnawaydemandwillnotbeabsorbeduntilnewsupplyentersthemarkettosatisfythe
need.GiventhelargevolumeofroomnightsgeneratedbyCSUfromitsvariouscomponents(students,sports,
academics, research, etc.), and based on our discussions with local representatives regarding their lodging
needs,thereappearstobeampledemandbetweenMayandSeptember. Inmanycases,peopleutilizehotel
accommodationsoutsideofthemarketarea,includingfacilitiesinLovelandwhichislocated12milessouthof
FortCollins.
Itisalsoimportanttonotethenumberofselloutdaysinthemarket.Inatypicalyear,theFortCollinsmarket
has75to100dayswhenoccupanciessurpass95%.Theseperiodsaregenerallythesummerperiods,butalso
include commencement weekend in May and sporting events throughout the year. In the recent economic
downturn, the number of sellout days has declined to merely 20 to 30 days per year. During these sellout
periods,thereispresumablyasignificantamountofturnawaydemand.
OldTownFortCollinsHotelMarketStudyභ38
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MarketPerformanceForecast
Based upon our review of the market dynamics, including the rooms supply and room night demand
relationship,marketsegmentation,andseasonality,wehaveforecastdemandforthecompetitiveset.
ForecastofMarketOccupancy
Even though roomnightdemandhasincreased,aspreviouslydiscussed, thecompetitiveset’soccupancyhas
declined significantly over the past few years, primarily due to new supply issues and more recently the
economic recession. The chart below shows the historical range (high to low) of annual occupancies for the
competitive market from 2004 through 2009 along with our forecasted range of occupancies through 2017.
While market occupancy in 2009 was 48.2%, the chart shows that the various hotels had occupancies that
rangedfromthemidͲ40%rangetoalmost60%,avarianceofroughly15points.Asoccupanciesslowlyrecover
over the next few years and themarketstrengthens, the gap in occupancy performance among the primary
competitorswilleventuallynarrow.
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
OldTownFortCollinsHotelMarketStudyභ39
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ForecastofMarketAverageRate
Thechartbelowshowsthebandwidthofaveragerate(hightolow)amongthecompetitivehotelsinFortCollins,
withannualaverageratesforthecompetitivemarketvarying$15to$20overthepastsixyears.Thevariancein
2010isexpectedtowidenassomehotelscontinuetodiscountratesinhopesofmaintainingoccupancy.Over
theprojectionperiod,thegapbetweenthehighandlowaverageratesforthecompetitivemarketisanticipated
toremainrelativelystable.
$0
$20
$40
$60
$80
$100
$120
$140
$160
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
ThetablebelowshowsthemediangrowthestimatesforthecompetitivelodgingmarketinFortCollins.
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Occupancy 48.2% 50.6% 53.1% 56.3% 59.7% 62.7% 66.8% 67.5% 68.2% 70.9% 70.9%
ѐ (13.4%) 5.0% 5.0% 6.0% 6.0% 5.0% 6.5% 1.1% 1.0% 4.0% 0.0%
ADR 96.98 96.98 99.89 102.89 105.97 109.15 112.43 115.80 119.27 122.85 126.54
ѐ (9.2%) 0.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
RevPAR 46.74 49.08 53.08 57.95 63.28 68.43 75.07 78.16 81.29 87.08 89.69
ѐ (21.3%) 5.0% 8.2% 9.2% 9.2% 8.2% 9.7% 4.1% 4.0% 7.1% 3.0%
Supply 431,430 431,430 431,430 431,430 431,430 431,430 431,430 458,805 486,180 486,180 486,180
ѐ 5.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 6.3% 6.0% 0.0% 0.0%
Demand 207,950 218,348 229,265 243,021 257,602 270,482 288,063 309,668 331,345 344,599 344,599
ѐ (8.8%) 5.0% 5.0% 6.0% 6.0% 5.0% 6.5% 7.5% 7.0% 4.0% 0.0%
RoomRev 20,167,037 21,175,389 22,901,183 25,003,512 27,298,834 29,523,689 32,386,011 35,859,410 39,520,656 42,334,527 43,604,563
ѐ (17.1%) 5.0% 8.2% 9.2% 9.2% 8.2% 9.7% 10.7% 10.2% 7.1% 3.0%
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The table below compares the growth rates and average occupancy utilized in our projections to those of
previouseconomiccycles.
TroughͲPeak TroughͲPeak Forecast
1991Ͳ2000 2001Ͳ2007 2009Ͳ2019
AvgOcc 71.8% 68.3% 61.7%
ADRCAGR 4.1% 3.5% 2.7%
RevPARCAGR 5.0% 2.3% 6.7%
SupplyCAGR 5.0% 4.6% 1.2%
DemandCAGR 5.8% 3.4% 5.2%
Over the course of the next 10 years, market occupancy is estimated to average 61.7%. As the table above
illustrates,thisiswellbelowthehistoricaltrendsinpreviouseconomiccycles.Withmarketoccupancycurrently
below 50%, we estimate that it will take four to five years of strong demand growth to return to more
normalizedoccupancylevelsandabsorbthevolumeofnewsupplythatenteredtheFortCollinsmarketatthe
endofthepriorcycle.Althoughtheoverallmarketoccupancyandaveragerategrowthprojectionsfallbelow
previous thresholds, RevPAR growth between 2009 and 2019 is projected to be 6.7%,muchhigherthanthe
priorgrowthperiods.However,withthemarketoccupancycurrentlyatsuchadepthandnonewsupplyonthe
immediatehorizonduringtherecoveryyears,thestronggrowthinRevPARappearsreasonable.
Demandgrowthforthecompetitivemarketisprojectedtoaverage5.2%between2009and2019.Thisdemand
growthrateiswithintherangeofpriormarketgrowthperiods.Averagerateisexpectedtoremainstagnantin
2010, but rate growth is expected to follow inflation over the long term. Given the difficult financing
environment,wedonotanticipatenewsupplytoentertheFortCollinsmarketforatleastthreetofouryears.
WhiletherearecurrentlynospecifichotelprojectsplannedforFortCollins,itishighlyprobablythatwhenthe
marketstrengthens,therewillbenewdevelopment.Wehaveimputedanadditional150newroomstoenter
themarketbetween2016and2017toaccountfortheriskassociatedwiththispossibility.
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5.DevelopmentScenarios
InourassessmentofthefeasibilityofanewhotelinOldTownFortCollins,weanalyzednumerousdevelopment
scenarios based on facilities program (room count, meeting space, and amenities), market orientation, and
guest mix. Under each scenario, we also evaluated differences in construction costs, performance, and
economic impact.Basedonourextensiveanalyses,wedefinedthreedevelopmentoptionsthathavevarying
degrees of initial costs, performance, risk, and economic impact. These three scenarios include an upscale
boutique hotelwithconferencefacilities, a selectͲservice hotel, and a small boutique hotel. The table below
summarizestherecommendedfacilitiesprogramforeachscenario.
Scenario Rooms MtgSp(SF) Facilities Amenities
UpscaleBrandedBoutique 180 20,000 restaurant,lounge,businesscenter pool,fitnessroom
SelectͲService 150 2,500 restaurant,lounge,businesscenter pool,fitnessroom
SmallUpscaleBoutique 90 5,000 restaurant,lounge,businesscenter
UpscaleBoutiqueHotelwithConferenceFacilities
Based on our local interviews, it is clear that many people within the community, even some in the lodging
sector,wouldliketoseeadistinctivehotelinOldTownthatisuniquetoFortCollins.However,theabilityto
attractfinancingforauniqueindependenthotelisdifficult,particularlyinthecurrentenvironment.Generally,
suchhotelsaredevelopedbylongͲterminvestorswhoarelessfocusedonmaximizinginvestmentreturnsand
moreinterestedinthebettermentofthecommunityorpersonalachievement.SuchprojectsincludetheGrand
AmericaHotelinSaltLakeCity,Utah;St.JulienHotelinBoulder,Colorado;orDevil’sThumbRanchinTabernash,
Colorado.WhiletheabilitytofindaninvestorinFortCollinsispossible,theanalysisbecomeslessmarketdriven
thanthescopeofourassignment.
Anupscaleboutiquehotelwithconferencefacilitiesbestsatisfiesofthecollectivedesiresofthemarketplace.
TheconferencecentercomponentwouldattractmoregroupstotheOldTownareaandhaveapositiveimpact
ondowntownbusiness,particularlyretailshopsandrestaurants.Theconferencefacilitywouldalsoappealto
moregroupsthatpreviouslyhavenotconsideredFortCollinsasapotentiallocationfortheirmeetingorevent.
ThepropertywouldbeuniquetoOldTownthroughsimilardesignandarchitecture,yethaveastrongbrand
affiliationtofacilitateoccupancybuildͲup.
Based on our evaluation of the downtown Fort Collins market, we recommend that the property include
approximately 180 guest rooms, a restaurant, a lounge, a pool, an exercise facility, a business center, and
roundly15,000to20,000squarefeetoffunctionspace.WiththelargevolumeofsuccessfulrestaurantsinOld
Town, the hotel’s food and beverage concepts should be unique and/or locally inspired.Withitsdowntown
location,groundfloorretailshopsmayalsobeaviablecomponentofsuchadevelopment;however,wehave
notconsideredanysignificantretailcomponentinouranalysis.
Theproperty’slocationinOldTownisconsideredadisadvantageinattractingcorporatetransientdemandfrom
businessinthevicinityofHarmonyRoad,particularlythatwhichispricesensitive.Inordertocompensatefora
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presumably lower penetration in the corporate segment, an upscale property would require ample meeting
spacetoattractgroupbusinesstofillthemidͲweekvoid.AnupscalehotelwithmeetingspaceindowntownFort
Collinswouldbecapableofattractingalargenumberofweddingsandsocialgroupsduringtheweekendsand
holidayperiods.
SelectͲServiceHotel
A selectͲservice hotel with fewer ancillary facilities than a fullͲservice upscale product is less costly and
possesseslessrisktodevelopersandfinanciers.Therearealreadydevelopersinterestedindevelopingsucha
productinOldTownusingsomelevelofconventional(market)financing.WerecommendthatifaselectͲservice
hotelwastargetedfordevelopmentitshouldincluderoughly150guestrooms,arestaurantandlounge,apool,
an exercise room, a business center, and 2,500 to 4,000 square feet of meeting space. While selectͲservice
hotelsaretypicallyveryhomogenous,werecommendthattheproperty’sexteriordesignfeaturesblendwith
OldTown.Wealsorecommendthatitincludeauniqueleasedrestaurantconcept,similartotheKevinTaylor’s
Steakhouse at the aloft in Broomfield or Rialto Café at the Courtyard in downtown Denver to add to the
property’sappealanddifferentiateitmorefromotherselectͲservicehotelsinFortCollins.Aswiththeupscale
product,aretailcomponentisworthconsideration.
Givenitslocationandnewfacilities,aselectͲservicepropertyisanticipatedtocompetemostdirectlywiththe
Marriott andHiltoninthecorporateandleisuresectors.However, simplybasedonitsmarketorientation, it
wouldalsocompetewithotherselectͲservicepropertiestosomedegree.Withitslackoflargeeventfacilities,
thepropertywillnotcompetesignificantlyforbanquetandmeetingbusiness.
SmallBoutiqueHotel
AsmallboutiquesatisfiestheneedforauniquemodernhotelindowntownFortCollins.Becauseofitssmall
size,itwouldlikelybeindependent.Thecostshouldbewellbelowabrandedhotelandconferencefacility,and
itshouldofferahigherqualitythantheselectͲserviceproperty.However,therearefewerprivateownersthat
would be interested in such a project due to its smaller size and lack of economies of scale necessary to
generateanadequatereturnoninvestment.Generally,smallerboutiquehotelsofthisnaturearedevelopedby
owneroperatorsthathavepersonaltiestothecommunity.Withoutabrandaffiliation,thepropertywillnotbe
subjectedtobrandstandardsandprerequisiteamenities.Thus,someconcessionscanbemadetocutcosts.We
recommend that a small boutique hotel contain 90 guest rooms, a small signature restaurant and lounge, a
businesscenter,and5,000squarefeetofmeetingspace.
AsmallboutiquehotelwouldhaveasimilarmarketbasetotheselectͲserviceproduct,asitwouldfocusmore
onindividualtravelersandgroupsthatdonotrequirealargeamountofmeetingspace.Suchapropertywould
competedirectlywiththeArmstrongHotel,althoughthisproductwouldbemoremodernandlackthehistoric
appeal.Theproperty’sratestructurewouldlikelybemoresimilartotheupscalebrandedscenario,whichwould
also limit itspenetrationintothecorporatemarket.ForinͲhousegroups, thepropertyshouldfocusonsmall
executivelevelmeetingsandhighͲendsocialbusiness.
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Branding
In our evaluation of the Fort Collinsmarket,webelievethatadowntownhotelwouldlikelyrequireamajor
brandaffiliationinordertolowertheprojectriskprofileandinducemeetingdemandmosteffectively.Whilean
independent boutique property would be most cohesive with the Old Town neighborhood, the ability to
effectivelypenetratethemarketandbuildareputationamongcorporatetravelersandmeetingplannerwillbe
greatlyimprovedwithamajorbrand.
InFortCollinsandthesurroundingarea,manyofthelargerbrandsarealreadyrepresented,prohibitingmanyof
them frombeingutilizedbyahotelindowntownFortCollins.Thetablebelowcomparesmanyofthemajor
upscaleandselectͲservicebrandsby2008roomrevenueperformanceaswellasrankingsbyseveralconsumer
surveyorganizations.Thehighlightedbrandsarethosewhichalreadyexistedinthemarketplace.
JD Market Consumer
Brand Parent Properties Power Metrix Reports
Upscale,FullͲService
Westin Starwood 162 786 84.5 83
Hyatt Hyatt 162 776 81.9 80
InterContinental InterContinental 164 795 84.4 NA
Hilton Hilton 525 781 82.2 79
Marriott Marriott 492 792 84.1 82
EmbassySuites Hilton 200 809 84.0 83
Renaissance Marriott 76 792 87.0 84
Sheraton Starwood 409 763 82.3 78
Doubletree Hilton 217 771 82.8 80
Wyndham Wyndham 265 796 81.8 77
CrownePlaza InterContinental 133 763 82.0 77
HolidayInn InterContinental 780 739 81.3 75
Radisson Carlson 415 757 81.0 74
SelectͲService
ResidenceInn Marriott 555 812 84.5 84
HomewoodSuites Hilton 276 815 85.0 87
HiltonGardenInn Hilton 467 801 86.0 83
Courtyard Marriott 728 787 82.4 80
SpringHillSuites Marriott 207 806 86.4 87
HyattPlace Hyatt 130 790 90.5 NA
HamptonInn&Suites Hilton 1,197 804 85.0 83
aloft Starwood 17 NA NA NA
Indigo InterContinental 19 NA NA NA
FourPoints Starwood 134 744 80.6 NA
FairfieldInn Marriott 597 779 84.1 80
Wingate Wyndham 164 799 85.3 82
According to the respective franchise companies, of the upscale brands listed above, Westin, Hyatt and
InterContinental lead in terms of performance. Renaissance and Westin have the highest ratings by both
Consumer Reports andMarketMetrix. Of the available brands, InterContinental, Renaissance andWyndham
possess the highest JD Power rating. Wyndham, however, lags in performance. InterContinental has a high
ratingbyMarketMetrix,butisnotratedbyConsumerReports.
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Westin,Renaissance,WyndhamandSheratonhavesmalldevelopmentprototypesthatwouldfittheproduct
sizerecommendedforOldTownFortCollins.Inspeakingwithdevelopers,mostsuggestedWestin,Renaissance,
orSheratonforafullͲservicehotelinFortCollins.
OftheavailableselectͲservicebrands,SpringHillSuitesandHyattPlacehavethehighestratingsandthebest
topͲlineperformanceaccordingtothefranchisors.NewbrandssuchasaloftandIndigoarestillintheirinfancy,
butarealsoworthconsiderationgiventhelevelinterestfromthedevelopmentcommunity.Inourdiscussions
with developers, most of them suggested aloft or Hyatt Place as a preferred brand they would consider
developinginOldTown.
Anotherkeyfactortoconsideristheguestloyaltyprogramsthatthesebrandsoffer.StarwoodandHyattdonot
currently have any representation in the area. Thus, these brands could potentially attract more of their
frequentguestsandcorporateaccounts.Meanwhile,othercompaniessuchasMarriottandHiltonhaveseveral
productsinthemarketandanewproductundertheirumbrellasmightnotinducemuchofademandshifttoa
newproperty.
Basedonourevaluationofthepotentialbrands,aswellasourdiscussionswithdevelopers,werecommendthat
anupscalescenariobeaffiliatedwithWestinorRenaissanceandaselectͲserviceproductbebrandedwithHyatt
Placeoraloft.
PerformanceProjections
Aspreviouslystated,theonlyhotelinOldTownFortCollinsisthe43ͲroomArmstrongHotel.Becauseofthelack
ofextensivemarketdataspecifictoOldTown,weanalyzedtheperformanceofsimilarmarketsthroughoutthe
UnitedStatestounderstandthedynamicsandperformancevariancesofdowntownproperties.Basedonthe
trendsshowninothermarkets,weinterpolatedthepotentialperformanceofadowntownhotelproperty.We
also utilized the performance statistics of key competitors within the Fort Collins market to understand the
seasonalityandweeklyfluctuationsthatinfluenceoccupancyandaveragerateamongtheproperties.
Occupancy
The chartbelowillustratesthemonthlyrangesofmarketoccupancyinFortCollinsoverthepastsixyearsin
comparison to a most likely stabilized level for an upscale boutique hotel (yellow line) and a selectͲservice
product (orange line). We estimate that following absorption of the current supply base in Fort Collins, an
upscaledowntownhotelwouldachieveoccupanciesintheupperendofthehistoricrange,yetshyofthetypical
highoccupanciesachievedeachmonth.Overall,weestimatethatanupscalehotelaffiliatedwithamajorbrand
wouldachieveastabilizedoccupancyofapproximately70%.
Withalowerratestructurethantheupscaleboutiquescenario,weanticipatethataselectͲserviceproductin
OldTownFortCollinswouldachievehigheroccupanciesthananupscalefacility. Themarketperceptionofa
selectͲservice brand is anticipated to benefit the property in capturing midͲweek commercial demand. We
projectaselectͲservicehotelinOldTownFortCollinstostabilizeatanoccupancyof74%.
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Occupancy2004Ͳ2009 RangeofAvgOccupancy RangeofAbsoluteOccupancy
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
JFMAMJJASOND
AverageRate
Due to its new facilities and downtown location, an upscale product is expected to achieve an average rate
superior to the other hotels in the marketplace. A selectͲservice product downtown, with new facilities,
additional amenities (restaurant & lounge), and a more desirable location, is also expected to attain a high
averagerate,albeitcomparabletotheexistingfullservicehotelsinFortCollins.
Thechartbelowillustratesthepotentialmonthlyaveragerateperformanceofaboutiqueproduct(yellowline)
and a selectͲservicehotel(orange line)onastabilizedlevelcomparedtothehistoricalmonthlyaveragerate
rangeofthecompetitivehotelsinFortCollins.Theproposedpropertyisexpectedtoachievearatepremium
throughouttheyear,primarilydrivenbyoccupancycompressioninthehighseasonwithlessofapremiumin
thewintermonths.
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ADR2004Ͳ2009 RangeofAvgADR RangeofAbsoluteADR
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
JFMAMJJASOND
Thehighaveragerateprojectionshownaboveforanupscaleproductmayappearaggressive;however,inour
evaluationofsimilarmarkets,upscaledowntownhotelsperformatasignificantpremiumtotheoverallmarket.
Ineverycase,downtownhotelsachieveanADRandaRevPARpremiumtothemarket.Inthemajorityofcases,
theoccupancyofthesehotelsisalsosuperiortothemarket.
As a crosscheck of the reasonableness of our forecast, the chart below clearly illustrates the premium
penetration levels achieved by upscale downtown hotels in some of the markets we analyzed. Although we
cannot divulge which individual hotels achieved the penetration levels indicated below, the markets we
examined includeBoulder,Colorado;ColoradoSprings,Colorado;DesMoines, Iowa; IowaCity, Iowa;Lincoln,
Nebraska;andProvo,Utah.Thechartalsoshowsacomparisontohowapotentialupscaleboutiquepropertyin
OldTownisexpectedtoperformuponstabilization.
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0% 50% 100% 150% 200% 250% 300%
MarketF
MarketE
MarketD
MarketC
MarketB
MarketA
FortCollins
Occ
ADR
RevPAR
Source:SmithTravelResearch
EachofthemarketsanalyzedresembleFortCollinsindifferentways,butLincolnandBoulderhavethemost
similaritiesintermsofpopulation,distancefrommajorairport,andcollegeenrollment.Uponstabilization,we
projecttheproposedupscalehotelandsmallboutiquehoteltoachieveanoccupancypenetrationslightlyabove
thecompetitivemarketandanaverageratepremiuminexcessof150%.Withfewerroomstofill,theoccupancy
forthe90Ͳroomboutiquescenarioisanticipatedtoexceedthatofthelargerupscaleboutiquedevelopment.
Thetablebelowshowstheestimatedrangesofstabilizedroomrevenuestatisticsforeachscenario.
StabilizedPerformance(2010$s)
Scenario Occupancy ADR RevPAR
UpscaleBrandedBoutique High 70.0% $170.00 $119.00
Low 66.0% 140.00 92.40
SelectͲService High 76.0% 120.00 91.20
Low 72.0% 105.00 75.60
SmallUpscaleBoutique High 74.0% 170.00 125.80
Low 70.0% 140.00 98.00
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UtilizingourdatabaseofhoteloperatingstatisticsforpropertieswithintheFortCollinsmarketareaaswellas
similar asset types, we created pro forma projections for each scenario. The chart below shows a summary
comparisonoftheestimatedstabilizedperformancerangesofanOldTownhotelundereachscenario.
StabilizedPerformance(2010$s)
Scenario Rev GOP GOP%NOINOI%
UpscaleBrandedBoutique High $11,400,000 $4,300,000 37.7% $2,900,000 25.4%
Low $9,800,000 $3,700,000 37.8% $2,400,000 24.5%
SelectͲService High 6,500,000 2,800,000 43.1% 1,900,000 29.2%
Low 5,600,000 2,400,000 42.9% 1,600,000 28.6%
SmallUpscaleBoutique High 5,300,000 2,000,000 37.7% 1,400,000 26.4%
Low 4,600,000 1,700,000 37.0% 1,200,000 26.1%
It is important to note that for the upscale branded boutique hotel and the selectͲservice hotel, there is
potentialforadditionalrevenue(andrelatedexpenses)withtheinclusionofgroundfloorretailshops.
DevelopmentCosts
Basedoninterviewswithlocaldevelopers,investigationoflocalconstructionprojects,aswellasourknowledge
ofcomparabledevelopmentprojects,weestimateddevelopmentcostsforalodgingfacilityindowntownFort
Collins.
ThemostrecentconstructionprojectinOldTownFortCollinswastheMitchellBlock.The45,000ͲsquareͲfoot
buildingcostapproximately$12,000,000todevelop.Thisamountequatesto$266persquarefoot.Weexpected
that the quality of construction for a hotel in Old Town will be similar to or modestly less than that of the
MitchellBlock.Inaddition,weresearcheddevelopmentcostsforhotelsinColoradoandaroundthenation.A
typicalupscalehotelwithadequatemeetingspacecontainsapproximately1,000squarefeetperguestroom.
Utilizingarangeof$250to$260persquarefoot,thisequatesto$250,000to$260,000perguestroomforan
upscale hotel, or between $45,000,000 and $46,800,000 for a 180Ͳroom hotel or between $22,500,000 and
$23,400,000fora90Ͳunitproperty.AselectͲservicepropertysuchastheonepreviouslydescribedwouldhouse
approximately800squarefeetperguestroom.Again,using$250to$260persquarefootasabasis,a150Ͳroom
selectͲservicehotelyieldsacostestimatebetween$30,000,000and$31,200,000.
The table below delineates several recent and upcoming upscale and selectͲservice development projects
similarinsizeandscopetotheproposedscenariosdiscussedherein.
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Property Location Rooms YrBuilt MtgSp Cost Cost/Rm
Upscale
WestinMcKinney McKinney,TX 200 UC 35,000 $72,000,000 $360,000
RenaissanceColoradoSprings ColoradoSprings,CO 320 UC 50,000 70,000,000 218,750
WestinPortsmouth Portsmouth,NH 221 OctͲ11 20,000 75,000,000 339,367
HiltonRichmondShortPumpTownCenter Richmond,VA 251 DecͲ09 33,000 50,000,000 199,203
WestinLakeMary LakeMary,FL 253 NovͲ09 14,000 50,000,000 197,628
MarriottBloomington/Normal Normal,IL 229 NovͲ09 23,000 47,000,000 205,240
MarriottMaconCityCenter Macon,GA 220 SepͲ09 5,000 37,000,000 168,182
SheratonHerndonDullesStation Herndon,VA 184 MarͲ09 2,958 50,000,000 271,739
WestinTampaBay Tampa,FL 255 JanͲ09 7,000 68,000,000 266,667
RenaissanceRaleighNorthHills Raleigh,NC 228 JanͲ09 8,000 60,000,000 263,158
IHotel&ConferenceCenter Champaign,IL 126 AugͲ08 38,000 30,000,000 238,095
SheratonSt.Paul/Woodbury Woodbury,MN 150 JulͲ08 2,422 25,000,000 166,667
HiltonColumbus/Polaris Columbus,OH 252 JunͲ08 15,000 54,000,000 214,286
HiltonBellaHarbor Rockwall,TX 231 MayͲ08 25,000 48,000,000 207,792
WestinMountLaurel MountLaurel,NJ 180 AprͲ08 14,000 42,000,000 233,333
WestinHuntsville Huntsville,AL 200 AprͲ08 11,000 45,000,000 225,000
SheratonErieBayfront Erie,PA 200 AprͲ08 5,800 48,000,000 240,000
Average 218 18,187 $51,000,000 $235,405
SelectͲService
SpringHillSuitesAnschutzMedicalCampus Aurora,CO 153 JanͲ12 NA $25,000,000 $163,399
HyattPlace@GrandviewYard Grandview,OH 126 JanͲ11 NA 20,000,000 158,730
HyattPlaceMadisonDowntown Madison,WI 150 AprͲ10 2,500 20,000,000 133,333
HyattPlaceUCDavis Davis,CA 75 MarͲ10 1,200 13,200,000 176,000
aloftMilwaukeeDowntown Milwaukee,WI 160 DecͲ09 4,600 27,800,000 173,750
aloftatAristaBroomfield Broomfield,CO 139 MayͲ09 7,555 26,500,000 190,647
HiltonGardenInnMinneapolisDowntown Minneapolis,MN 210 FebͲ09 3,000 35,000,000 166,667
aloftDenverAirport Aurora,CO 144 DecͲ08 1,075 25,000,000 173,611
HolidayInnIPFW FortWayne,IN 151 NovͲ08 1,000 20,000,000 132,450
HiltonGardenInnDenverDowntown Denver,CO 221 JulͲ07 6,800 35,000,000 158,371
Average 153 3,466 $25,000,000 $161,871
Many of the upscale developments shown above are located in secondary markets, some of which have
universitiesadjacentornearby.Becauseoftheirsizeandfacilitiesprogram,theWestinMountLaurelandthe
MarriottBloomington/NormalarethemostcomparabletotherecommendedupscaleproductforFortCollins.
ThecostoftheRenaissanceColoradoSpringsisalsorelevantbecauseoftheproject’slocation.
MostoftheselectͲservicehoteldevelopmentsshownabovearesituatedindowntownlocations,andafeware
also situated at college campuses. The most comparable is the Hilton Garden Inn Denver Downtown. It is a
modern facility situated on a 0.5Ͳacre lot with brick exterior and underground parking. The aloft at Arista
BroomfieldisalsoanalogoustowhatisrecommendedforFortCollinsbecauseithasaspecialtyrestaurant.
It is importanttonotethelackofavailablespaceindowntownFortCollinstosupportaprojectwithsurface
parking. Consequently, the proposed development will likely require structured underground parking, unlike
manyofthepropertieslistedabove.Thisobviouslyresultsinhigherconstructioncosts.Basedoncurrentcosts,
weestimatedanundergroundparkinggaragetocostapproximately$4,000,000to$6,000,000.
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Basedonourmarketinvestigationthetablebelowshowsourestimateofdevelopmentcostrangesforeach
majorcomponentundereachproductscenario.
Scenario Hotel ConfCtr FF&E Parking Land Total
UpscaleBrandedBoutique High $31,000,000 $7,500,000 $3,000,000 $6,000,000 $2,500,000 $50,000,000
Low 30,000,000 5,500,000 2,500,000 5,500,000 1,500,000 45,000,000
SelectͲService High 23,000,000 0 2,000,000 5,500,000 2,500,000 33,000,000
Low 20,000,000 0 1,500,000 5,000,000 1,500,000 28,000,000
SmallUpscaleBoutique High 17,000,000 0 1,500,000 5,000,000 2,500,000 26,000,000
Low 15,500,000 0 1,200,000 4,000,000 1,500,000 22,200,000
We estimate that a 180Ͳroom upscale fullͲservice hotel will cost between $45,000,000 and $50,000,000 to
develop.Weestimatethata150ͲunitselectͲservicepropertywillcostbetween$28,000,000and$33,000,000to
construct.Asmall90Ͳroomboutiquepropertyisestimatedtocostbetween$22,200,000and$26,000,000.A
comparativesummaryoftheserangesisshownbelow.
TotalCost Cost/Rm
Scenario Rooms BldgSF Low High Low High
UpscaleBrandedBoutique 180 180,000 $45,000,000 Ͳ $50,000,000 $250,000 Ͳ $277,778
SelectͲService 150 120,000 $28,000,000 Ͳ $33,000,000 $186,667 Ͳ $220,000
SmallUpscaleBoutique 90 90,000 $22,200,000 Ͳ $26,000,000 $246,667 Ͳ $288,889
InvestmentReturns
Basedontheestimateddevelopmentcostsforeachscenario,aswellastherangesofprojectedperformance,
wecalculatedtheunleveragedreturnsforaninvestorinsuchprojects.Thetablebelowshowsthemostlikely
rangesofinvestmentreturnsandstabilizedcashͲonͲcashreturnsforeachscenariounleveraged.
Stabilized
Scenario IRR CashͲonͲCash
UpscaleBrandedBoutique High 4.5% 7.3%
Low 1.8% 6.3%
SelectͲService High 4.8% 7.6%
Low 2.1% 6.5%
SmallUpscaleBoutique High 3.2% 6.9%
Low 0.6% 5.9%
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Ineachcase,theoverallrateofreturnfallsbelowthethresholdoftypicalhotelinvestors.Itisalsobelowthe
currentinterestratesfordebtfinancingonsuchprojects,andwouldlikelyresultinnegativeleveragebasedona
typicalequityanddebtinvestmentstructure.
To attract a developer to a hotel project inOldTownFortCollins, incentiveswillberequiredintheformof
financialassistanceinordertoimprovetherateofreturnonsuchaproject.Theseincentivescouldbeinvarious
forms,andcanbeacombinationofthefollowing:
x Taxabatement
x Publicfinancing,fortheoverallprojectorcertaincomponents(parkinggarage,conferencefacility,etc.)
x Loanguarantees
x Landacquisition
x Beneficialleasebackagreementforlandand/orfacilities
EconomicImpact
AlthoughtheprojectedinternalinvestmentreturnsforapotentialhotelprojectinOldTownFortCollinsarenot
adequatetoattractatypicalhotelinvestoratthistime,thebroadereconomicimpacttotheCityofFortCollins
generated by such a hotel may validate public financial assistance to enhance investment returns. Industry
sectors such as retail, entertainment, and food and beverage receive large boosts in conjunction with
incrementalvisitationandspending.
Eachdollarcollectedbyahoteleventuallyrecycles,ormultipliesitself,creatingmanylevelsofeconomicactivity.
Asaservice,hotelandmotelsgenerateguestdemand,andtheseguestsinturnspendtheirmoneynotonlyat
the property itself but on support facilities in the local area. As employers, hotels pay wages; these wage
earners, in turn, make purchases from local businesses. As taxpaying entities, hotels add revenues to local
communitiesandasconsumers,hotelsbuygoodsandservicesfromareabusinesses.
Economic benefits are typically classified into three segments: direct, indirect and induced effects.These
segmentsaredefinedasfollows:
x Directeffectsarethedirectpurchasesmadebythedemandevent.InthecaseofanewconventionͲ
centerhotel,thedirecteffectconsistsofthemoneyspentdirectlybytheguestonaccommodations,
foodandbeverage,rentalcarsandancillarysupportservices.
x Indirect effects refer to the reͲspending of the initial direct effect dollars.In the case of a hotel, an
examplewouldincludethehotelrevenueearnedfromtheguestsbeingreͲspentonthepurchaseof
new supplies which enable the property to support its operation. This consists of a rippleͲlike effect
where the dollars are reͲspent over numerous permutations; logically, however, the dollar base
becomesdilutedasiteventuallyleavesthesamplingarea.Furthermore,someofthesedollarsarepaid
towardfederaltaxesorareputintosavings,whichessentiallystopstheflowoftheindirectspending.
x Induced effects consist of the positive changes in employment which is generated by the direct and
indirecteffects.Forexample,anewhotelmayinducenewemployeestothearea,whointurnspend
theirmoneyonlocalgoodsandservices.
OldTownFortCollinsHotelMarketStudyභ52
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
WeanalyzedtheotherindustrysectorsinFortCollinsthatareexpectedtoreceiveeconomicbenefitfromthe
constructionofanewlodgingfacilityinOldTown.Thisprocessincludesestimatingdirect,indirect,andinduced
economicinfluences.
We estimated the average spending for overnight visitors to Fort Collins based on the 2008 travel studies
producedbyLongwoodsInternationalfortheColoradoTourismOffice.Thedatabelowdelineatestheaverage
dailyspendingforovernightvisitorstoFortCollins.
AvgDaily
Category Spending
Recreation $17.50
Eating/Drinking 25.00
Retail 17.50
Transportation 25.00
Total $85.00
Aspreviouslystated,notalloftheoccupiedroomnightsforeachhotelscenariowillbenewtothemarket.In
thecasesoftheselectͲservicehotelsandthesmallboutiquehotel,onlyasmallportionofthedemandbasewill
benewtoFortCollins.However,somedemandwouldbenewtotheOldTownarea,shiftingfromotherlodging
facilitiesinFortCollins.Consequently,retailandrestaurantsaleswouldlikelyincrease.Inthecaseoftheupscale
brandedhotelwithconferencefacilities,weestimatethatapproximately30%ofitsstabilizeddemandbasewill
benewdemandinducedbythenewstructure.
Basedonthevolumeofnewvisitorsthateachproductscenariowouldproduce,thetablebelowillustratesthe
estimateddirectimpactthateachlodgingfacilitywouldhave.Therevenuesshownbelowareinadditiontothe
revenuesatthesubjecthotelitself.
IndustrySectors
Scenario Recreation FoodService Retail Transport Total
UpscaleBrandedBoutique High $300,000 $420,000 $210,000 $420,000 $1,340,000
Low 250,000 360,000 180,000 360,000 1,150,000
SelectͲService High 100,000 160,000 110,000 160,000 540,000
Low 90,000 140,000 90,000 140,000 460,000
SmallUpscaleBoutique High 100,000 160,000 110,000 160,000 540,000
Low 90,000 140,000 90,000 140,000 460,000
To calculate the indirect and induced spending from the direct impact,weutilizedIMPLANeconomicimpact
software. IMPLAN is an economic impact assessment modeling system that allows the user to estimate the
impactsofeconomicchangesintheirstates,counties,orcommunities.Inthecaseofthesubjectproperty,data
wasobtainedforLarimerCounty,whichthereforerepresentstheboundariesoftheprojectedeconomicimpact.
Once direct impacts are input into the system, IMPLAN uses its researched local economic base data and
multiplierstoestimatethechangesintheflowofincome(e.g. indirectandinducedeffects)causedbydirect
spendingresultingfromtheexistenceofthenewhotelproductinOldTownFortCollins.
OldTownFortCollinsHotelMarketStudyභ53
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
Inordertoestimatetherangeofindirectandinducedbenefit,weinputtheaboveͲcalculateddirecteffectsinto
theappropriateindustrycategoriesintheIMPLANsoftware,andusedtheLarimerCountydatatoextrapolate
totalsusinglocalmultipliers.
StabilizedEconomicImpact(2010$s)
Scenario Direct Indirect Induced Total
UpscaleBrandedBoutique High $1,340,000 $2,700,000 $2,580,000 $6,620,000
Low 1,150,000 2,310,000 2,510,000 5,970,000
SelectͲService High 540,000 1,500,000 1,420,000 3,460,000
Low 460,000 1,280,000 1,390,000 3,130,000
SmallUpscaleBoutique High 540,000 1,230,000 1,170,000 2,940,000
Low 460,000 1,050,000 1,140,000 2,650,000
Becauseofthelargernumberofnewvisitorsinducedbytheupscalebrandedhotel,theannualeconomicimpact
ismuchgreater, ranging from roughly $6,000,000 to $6,600,000. The selectͲservice product is anticipated to
generatebetween$3,100,000 and$3,500,000,whileasmallboutiqueassetisexpectedtoproducebetween
$2,600,000and$2,900,000.
EconomicImpactonOldTownFortCollins
Theothercomponentoftheimpactanalysisinvolvesunderstandingtheamountofneweconomicactivityin
downtown Fort Collins that was previously located in other areas. A new downtown hotel will also attract
capture business from the existing demand base in Fort Collins. Thus, there will be new economic activity
downtownthatwillshiftfromotherareassuchasHarmonyRoadortheFoothillsMallarea.Thechartbelow
illustratestheestimatedamountofeconomicactivitythatisexpectedtotransfertotheOldTownareaunder
eachscenario.
StabilizedEconomicActivityShiftedtoOldTown(2010$s)
Scenario Direct Indirect Induced Total
UpscaleBrandedBoutique High $890,000 $1,800,000 $1,720,000 $4,410,000
Low 770,000 1,540,000 1,670,000 3,980,000
SelectͲService High 430,000 1,200,000 1,140,000 2,770,000
Low 370,000 1,020,000 1,110,000 2,500,000
SmallUpscaleBoutique High 410,000 920,000 880,000 2,210,000
Low 350,000 790,000 860,000 2,000,000
Thetablebelowshowstheannualstabilizedrevenuerangesforeachhotelscenario,whichprovidesasignificant
impacttotheeconomyinitself.
OldTownFortCollinsHotelMarketStudyභ54
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
Stabilized
Scenario Revenue(2010$s)
UpscaleBrandedBoutique High $11,400,000
Low 9,800,000
SelectͲService High 6,500,000
Low 5,600,000
SmallUpscaleBoutique High 5,300,000
Low 4,600,000
The table below shows the total annual economic impact to Old Town Fort Collins by combining the hotel’s
revenuegenerationwiththeneweconomicactivityandtheeconomicactivityanticipatedtoshiftfromother
areasofthecity.
TotalStabilizedEconomicImpacttoOldTown(2010$s)
Scenario Hotel Direct Indirect Induced Total
UpscaleBrandedBoutique High $11,400,000 $2,230,000 $4,500,000 $4,300,000 $22,430,000
Low 9,800,000 1,920,000 3,850,000 4,180,000 19,750,000
SelectͲService High 6,500,000 970,000 2,700,000 2,560,000 12,730,000
Low 5,600,000 830,000 2,300,000 2,500,000 11,230,000
SmallUpscaleBoutique High 5,300,000 950,000 2,150,000 2,050,000 10,450,000
Low 4,600,000 810,000 1,840,000 2,000,000 9,250,000
JobCreation
Similar to the classificationoftheeconomicbenefitsofanewproperty,newjobsestimatesarecreatedina
similarmanner.Anewhotelwilldirectlycreatenewjobsitself.Theadditionaleconomicactivityspurredbythe
newhotelwillinturncreatejobsatotherbusinesses.Thetablebelowdelineatestheestimatednumberofnew
jobscreatedundereachscenario.Thenewjobsshowninthetableabovealsoincludethejobsatthenewhotel
itselfinthedirectcategory.
NewJobsCreated
Scenario Direct Indirect Induced Total
UpscaleBrandedBoutique 162 23 24 209
SelectͲService 90 13 13 116
SmallUpscaleBoutique 73 11 11 95
Aswiththeoveralleconomicbenefit,theupscalebrandedproductwouldgeneratemorethan200newjobsfor
the City. The select service and small boutique product are estimated to generate 166 jobs and 95 jobs,
respectively.
OldTownFortCollinsHotelMarketStudyභ55
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
TaxRevenue
Based upon increased revenue from community enterprises such as restaurants, retail shops, and related
entities,alongwiththetaxesfromthesubjecthotelitself,thetablebelowdelineatestheestimatedrangesof
newtaxrevenuecreatedundereachscenarioonanannualbasis.
StabilizedTaxImpact(2010$s)
Scenario Direct Indirect Induced Total
UpscaleBrandedBoutique $1,005,000 $90,000 $170,000 $1,265,000
SelectͲService 565,000 50,000 95,000 710,000
SmallUpscaleBoutique 460,000 40,000 75,000 575,000
The direct tax impact includes property taxes for the subject hotel, lodging tax, and sales tax related to the
increasedeconomicactivityfromanewhotel.Thetaximpactdoesnot,however,takeintoaccountpotential
increasesinpropertytaxesresultingfromhigherassessedvaluesthatmayoccurintheOldTownneighborhood
asaresultofthepotentialenhancementtothearea.
CostandBenefits
The charts on the following page illustrate the ranges of public incentives necessary under each scenario in
comparisontotheeconomicimpacttoFortCollins(excludingthehotel)andtheadditionaltaxrevenueoverthe
firsttenyearsofhoteloperations.Thedataisshownincurrentdollars.Thesechartsshowthepotentialcostto
themunicipalitytoincentivizeadeveloperaswellthebenefitstothelocaleconomyandthecity.
For an upscale branded boutique property, a typical developerwouldrequire$15,000,000 to $18,000,000 in
order to generate an adequate return. However, the upscale product would also have the most economic
impactandgeneratethemosttaxdollars.AselectͲservicehotelorasmallboutiqueproductwouldonlyrequire
$9,500,000to$12,000,000inincentives,buttheeconomicimpactwouldbelessthanhalftheamountproduced
bythelargerdevelopment.
OldTownFortCollinsHotelMarketStudyභ56
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
UpscaleBoutiqueHotelwithConferenceFacilities
PublicIncentive
$0 $10 $20 $30 $40 $50 $60 $70 $80
Millions
Taxes(10 yrs)
EconomicImpact (10yrs)
SelectͲServiceHotel
PublicIncentive
$0 $10 $20 $30 $40 $50 $60 $70 $80
Millions
Taxes(10 yrs)
EconomicImpact (10yrs)
SmallUpscaleBoutiqueHotel
PublicIncentive
$0 $10 $20 $30 $40 $50 $60 $70 $80
Millions
Taxes(10 yrs)
EconomicImpact (10yrs)
OldTownFortCollinsHotelMarketStudyභ57
RRCAssociatesභ4940PearlEastCircle,Suite103භBoulder,CO80301භ303.449.6558
Conclusion
The development of a hotel in Old Town Fort Collins would not deliver adequate returns to be considered
feasibleunderaprivatedevelopmentscenario,particularlygiventhecurrentfinancingenvironment.Evenwith
morefavorablefinancingtermsthanarecurrentlyavailable,andassumingthenewroomsbuiltalongHarmony
Roadareabsorbed,aprivatehotelprojectinOldTownwouldstillnotlikelygeneratethereturnsnecessaryto
attractatypicaldeveloper.ThecostofdevelopmentinOldTownisprohibitiveduetothehighercostofland,
the higher cost of vertical construction, the need for an underground parking facility, and the higher design
standardsforthelocation.Moreover,thehighestroomratesachievedbythehotelsintheFortCollinsmarket
demonstrate that there is a clear rateceilingwhichwouldnotlikelygenerateadequatereturnsforaprivate
developer.
Downtownhotelfacilitiesareproventooutperformthegeneralmarketandcreateahubforeconomicactivity
and often spur additional development. The economic impact of such a facility, particularly to theOldTown
neighborhood,isprojectedtobesignificantoverthelongterm.AhotelprojectinOldTownhasconsiderable
appealtothelocalcommunityandappearstointeresthoteldevelopmentfirms.
WerecommendthattheCityofFortCollinsandtheDowntownDevelopmentAuthorityweighthevariouscosts
andbenefitsassociatedwithahoteldevelopmentinOldTowntodeterminewhetherprovidingpublicfinancial
assistancetosuchaprojectisjustified.Inthecurrentfinancialenvironment,theCityisinastrongnegotiating
positiontodictatetermsandthelevelofproductbecausetraditionaldevelopmentfinancingisdifficultforhotel
companiestoobtain.Aslodgingfundamentalsimproveanddebtmarketsbecomemorefluid,aprivatehotel
projectinFortCollinsmaybecomemorefeasible,butaddedcostsinthefuturemayequallydeterdevelopers
fromconsideringadowntownprojectwithoutpublicincentives.
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DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 62
APPENDICES
APPENDIX A: ASSESSMENT
To provide a common framework for our recommendations, TIP began by
compiling demographic and economic data on Fort Collins and the Front
Range. This analysis focused on Fort Collins and Larimer County in the
context of the state of Colorado and the nation where appropriate. The
purpose is to understand WKHFLW\¶V relative economic position and highlight its
competitive advantages and disadvantages.
About the data
We based our findings on the following elements:
A review of relevant studies, plans, and other material provided by the
City of Fort Collins;;
A review of economic and demographic data from primary and
secondary sources, including the US Census Bureau, the Internal
Revenue Service, the US Bureau of Labor Statistics, and Economic
Modeling Specialists Inc. (EMSI).
The data and analysis is organized within five categories: demographics,
migration and mobility, income and housing, economy, and workforce.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 63
APPENDICES
Summary of Data Findings
DEMOGRAPHICS
/DULPHU&RXQW\·s population is becoming increasingly urbanized. Fort Collins and the other incorporated areas of Larimer County have been growing
at a rapid pace over the last 10 years. Population in unincorporated areas has been flat. On the other hand, Fort Collins is growing more
slowly than
Loveland, Windsor, and Wellington and this trend is expected to continue.
The aging of the population is a demographic challenging facing the nation. While the Fort Collins MSA is expected to follow this trend, the impact
will
be far less dramatic compared to the rest of the nation.
MIGRATION & MOBILITY
Domestic migration accounts for most of the growth in Fort Collins. The largest number of residents that move to the Fort Collins MSA are from
Boulder County, and Weld County receives the largest number of outbound migrants from the MSA. Though the in-migration of residents to the
Fort Collins
MSA slowed from 2003 to 2005, it has since recovered and remained stable over the last 4 years.
Since 1998, immigration (international) varied between 400 and 600. From 1990 to 1998, on the other hand, the number of foreign nationals migrating
to the Fort Collins MSA ranged between 1,200 and 1,600.
The daily commuter flow reveals that the City of Fort Collins is a net importer of labor. Inbound commuters come from Windsor, Loveland,
Wellington, and Laporte while outbound commuters go to Denver, Boulder, Westminster, and Longmont. Education Services, Healthcare, and Professional
Services are the three sectors that draw commuters into Fort Collins. Construction, Wholesale Trade, and Transportation are the three sectors
that draw the
most commuters out of Fort Collins.
INCOME & HOUSING
Income and housing in Fort Collins follows the trends expected for a college town. The median household income is lower than the state as well
as
Larimer County but is comparable to the national average. In addition, the average household size is smaller.
Of note is that the housing market is tight. Fort Collins has a vacancy rate of only 6% and the median home value is almost $250,000,
which is more than
30% higher than the national average. As a result, Fort Collins and Larimer County are less affordable than both the state and the nation.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 64
APPENDICES
ECONOMY
)RUW&ROOLQV¶XQHPSOR\PHQWLVFXUUHQWO\KLJKHUWKDQWKHFRXQW\DVDZKROHEXWVLJQLILFDQWO\ORZHUWKDQWKHVWDWHDQGQDWLRQDl unemployment rates. Since
WKHFLW\·VXQHPSOR\PHQWUROOVKDYHGRXEOHGDQGUHPDLQHOHYDWHG
The primary source of revenue for the city is sales and use tax. The receipts from sales and use tax outweigh property tax receipts 4 to 1. However,
the sales and use tax base per-resident has been relatively stable over the past 10 years. Meanwhile, the property tax base, on a per-resident basis,
has increased 60% over the past 10 years.
The government sector, which includes public education, is the largest employment sector in the Fort Collins MSA. The retail trade and healthcare
sectors
are the next largest sectors. Since 2003, the healthcare, professional services, and finance sectors have been the most rapidly growing.
In terms of relative concentration of employment versus the nation, )RUW&ROOLQV¶VWURQJHVWVHFWRUVDUHLQPDQXIDFWXULQJ± breweries, engine equipment,
and
analytical laboratory instruments.
WORKFORCE
$OWKRXJKWKH)RUW&ROOLQV06$¶VZRUNIRUFHLVKLJKO\HGXFDWHGthe available jobs do not necessarily meet the skill level of the residents. Forty-one
percent of the population in the MSA has earned a bachelor degree or higher. However, 65% of the jobs in the MSA require only on-the-job
training or
previous experience;; only 25% of the jobs require a 4-year degree or higher.
The largest occupation groups are sales, office and administrative support, and management. Business and financial operations, healthcare, and
management are the fastest growing occupational groups.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 65
APPENDICES
SWOT
TIP conducted an economic
development SWOT analysis
(strengths, weaknesses, opportunities,
and threats) for the City of Fort Collins,
based on a review of economic,
demographic, and workforce
characteristics, interviews with local and
regional business and community
leaders, and our experience working
with communities and regions across
the country.
The graphic illustrates the results of the
analysis conducted as part of the
assessment.
The size of the bubble is intended to
FRQYH\ WKH FRQVXOWLQJ WHDP¶V YLHZ RI
the relative importance of the topic, and
in some cases, the likelihood of impact
in the region.
Items closer to the center of the graph
tend to be more local in nature. Those
at the outer corners are influenced by
state, national, or global trends, placing
them to some degree outside of local or
regional control.
WEAKNESSES STRENGTHS
THREATS OPPORTUNITIES
growing
clean
energy &
bioscience
clusters
state/regional
economy
ability to
attract
executives
I-25
Corridor
federal export
initiative may open
new opportunities
for local producers
R&D at
federal labs
& CSU
open labor
networks
growing global
demand for US
products and
services
favorable
exchange rate for
US$ benefits
exporters
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 66
APPENDICES
Larimer County's population
A decade of change
118,652
City of Fort
Collins
143,986
64,023
Other
incorporated
areas
89,784
68,819
Unincorporated
areas
65,860
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
2000 2005 2010
DEMOGRAPHICS
FIGURE1:
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 67
APPENDICES
Larimer County's population outlook
No changes expected in recent growth pattern
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
1970 1980 1990 2000 2010 2020 2030 2040
History Forecast
DEMOGRAPHICS
FIGURE 2:
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 68
APPENDICES
DEMOGRAPHICS
FIGURE 3: COMPARATIVE POPULATION DISTRIBUTION BY AGE
The demographic characteristics of college towns always
deviate from the national average and Fort Collins is no
different in this respect. About 34% of the city's residents are
in their 20s or early 30s. Across the US, this age cohort is
only 20% of the population.
The bulge of 20-34 year-olds in Fort Collins means that other
age cohorts are less represented in relative terms, including
seniors, children, and older adults of working age.
Source: U.S. Census Bureau (American Community Survey, 2009).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 69
APPENDICES
DEMOGRAPHICS
FIGURE 4: LARIMER COUNTY POPULATION DISTRIBUTION BY AGE
Nationwide, the age composition of the country is
changing rapidly as the first baby boomers are just
now beginning to retire. Over the next two decades
the ranks of seniors will grow enormously.
This pattern is expected to occur in the Fort Collins
MSA as well, but the overall trend is minor
compared to the rest of the country. The ranks of
seniors will increase, but these changes in
demographic composition will not be noticed as
much here as in the rest of the country.
Source: US Census Bureau;; Moody's Analytics.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 70
APPENDICES
DEMOGRAPHICS
FIGURE 5: CURRENT ENROLLMENT STATUS OF THE POPULATION
Nationwide, about 26% of
the population is enrolled in
an educational program at
some level -- anything from
pre-school to graduate
school. Colorado looks a lot
like the national average, but
in Fort Collins the presence
of Colorado State skews the
enrollment rate for the city's
population as well as the
MSA. Nearly 4 of every 10
residents in the City of Fort
Collins is enrolled in an
educational program of
some kind.
Source: U.S. Census Bureau (American Community Survey, 2005-2009 average)
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 71
APPENDICES
Demographic comparison
Ancestry, homeownership, military service, language, & citizenship
Family origins
Germany ŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
Latin America ŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰ
Africa ŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰ Ű Ű
Ireland ŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
England ŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰŰŰ
Asia ŰŰŰŰ ŰŰŰ ŰŰ ŰŰŰ
Scandinavia ŰŰŰ ŰŰŰŰŰ ŰŰŰŰŰŰŰŰŰ ŰŰŰŰŰŰŰŰ
Home
Owner
Renter
Military service
Civilian veteran
Currently in uniform
Primary language
English
Spanish
Other
Citizenship
US-born
Naturalized citizen
Not yet a citizen
87% 90% 95% 94%
5% 3% 2% 2%
7% 6% 3% 4%
12% 12% 7% 6%
8% 5% 3% 5%
1% 1% <1% <1%
80% 83% 90% 89%
34% 33% 34% 47%
9% 11% 10% 8%
3% 6% 10% 9%
66% 67% 66% 53%
9% 12% 14% 12%
5% 3% 2% 4%
2%
12% 13% 16% 16%
USA Colorado Larimer County Fort Collins
17% 23% 31% 29%
16% 20% 10% 10%
13% 5% 1%
DEMOGRAPHICS
FIGURE 6: DEMOGRAPHIC COMPARISON
Ancestry, homeownership, military service, language, & citizenship
A large base of rental housing
is needed to accommodate
student populations. In the
City of Fort Collins, about 47%
of occupied housing units are
rentals. This trend, however,
doesn't translate to the rest of
the MSA. Larimer County
itself has an overall
homeownership rate that
looks more like the state and
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 72
APPENDICES
MIGRATION & MOBILITY
FIGURE 7: LARIMER COUNTY MIGRATION PATTERNS
Gross numbers of inbound and outbound movers since 1989
The IRS provides county-level tabulations of
exemptions for annual tax return filings.
When the home address of a tax return filer
crosses a county line from one year to the
next, the aggregated IRS files capture this
as an inbound or an outbound move for a
given county.
These records show that inbound moves
into the Fort Collins MSA grew from about
13,000 in 1989 to 18,000 in 2001. Inbound
migration peaked during the tech boom, and
then aligned more closely with outbound
migration. Recent IRS data show that net
migration into the county is still positive, but
the margin hasn't regained its 1990s-era
levels.
Source: US Internal Revenue Service, county-to-county migration flows;; Moodys Analytics.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 73
APPENDICES
+0
+1,000
+2,000
+3,000
+4,000
+5,000
+6,000
+7,000
+8,000
+9,000
+10,000
1990 1995 2000 2005 2010
domestic migration
immigration
natural increase (births minus deaths)
detail in next
exhibit
MIGRATION & MOBILITY
FIGURE 8: COMPONENTS OF GROWTH IN FORT COLLINS MSA
Natural increase and
immigration have proven stable,
steady contributors to the MSA's
population growth, but the more
volatile component of net
domestic in-migration tends to
be the biggest driver of
population growth in most years.
The Census Bureau's annual
estimates of net domestic in-
migration align closely with the
trends seen in IRS records. A
dip in net migration occurred
after the tech boom of the
1990s, and the MSA has only
recent begun to resume more
typical growth patterns.
Source: U.S. Bureau of the Census;; Moody's Analytics.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 74
APPENDICES
MIGRATION & MOBILITY
FIGURE 9: MOBILITY RATES IN THE CITY OF FORT COLLINS BY AGE, 2006-‐2009 AVERAGES
% of Fort Collins population that moved during an average year in each age cohort
TIP analyzed city-level data from the
American Community Survey for the four
years from 2006-2009. This analysis
documents mobility patterns by age, but it
yields few surprises. In-migration into the
city is heaviest among 18-19 year-olds
transitioning from high school to college.
Mobility is very high among those in their
20s.
The analysis also shows that as adults in
the City of Fort Collins grow older, their
annual mobility rates generally decline.
Young families with children are likely to
scramble to new nests before their kids
start kindergarten, but the mobility rate
among school-age children then drops by
half.
Source: U.S. Census Bureau (American Community Surveys, 2006, 2007, 2008, & 2009).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 75
APPENDICES
inbound (net moving into Larimer County)
outbound (net leaving Larimer County)
+1000 +1000
+800 +800
+600 +600
+400 +400
+200 +200
0 0
-200 -200
-400 -400
-600 -600
-800 -800
-1000 -1000
-1200 -1200
-1400 -1400
-1600 -1600
-1800 -1800
Boulder Jefferson Los Angeles El Paso Arapahoe Denver Weld
County County County County County County County
San Diego
County
Colorado Colorado California Colorado California Colorado Colorado Colorado
1989
2008
1989
2008
1989
2008
1989
2008
1989
2008
1989
2008
1989
2008
1989
2008
MIGRATION & MOBILITY
FIGURE 10: COUNTIES WITH HISTORICALLY HIGH MIGRATION PATTERNS WITH LARIMER COUNTY
Annual net migration into (out of) Larimer County from the selected counties
Looking back once more at IRS
tabulations, we are able to answer
some basic "where" questions
about mobility.
Larimer County nets most of its
new residents from Boulder
County and picks up a relatively
steady trickle of in-migrants from
urban Southern California
counties.
Larimer loses more residents on a
net basis to Weld County than
anywhere else. Denver County is
a distant second, but it too has
recently been peeling away as
many as 200-300 Larimer
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 76
APPENDICES
MIGRATION & MOBILITY
FIGURE 11: NET DAILY COMMUTER FLOW TO AND FROM CITY OF FORT COLLINS
Four inbound commuters to city for every three who commute out
Net inbound commuting into the City of Fort Collins narrowed during
the recession that followed the tech boom (about 2003), but
inbound commuting growth has since resumed.
The city nets about 10,000 inbound commuters. What these means
in real terms is that the city's job base exceeds the number of
employed residents by about 10,000.
Source: US Internal Revenue Service, county-to-county migration flows;; Moodys Analytics.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 77
APPENDICES
inbound (net commuting into Fort Collins)
outbound (net commuting out of Fort Collins)
+1,200 +1,200
+1,000 +1,000
+800 +800
+600 +600
+400 +400
+200 +200
0 0
-200 -200
-400 -400
-600 -600
-800 -800
-1,000 -1,000
-1,200 -1,200
-1,400 -1,400
-1,600 -1,600
-1,800 -1,800
-2,000 -2,000
City of City of City of City of City of City of City of
Denver Boulder Westminster Longmont Laporte Wellington
City of
Colorado
Loveland Windsor
Colorado Colorado Colorado Colorado Colorado Colorado Colorado
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
MIGRATION & MOBILITY
FIGURE 12: NET DAILY COMMUTER FLOW BETWEEN CITY OF FORT COLLINS AND OTHER CITIES
Net outbound flows from Fort Collins to cities further south; most net inbound traffic is local
Commuters who reside in the City of
Fort Collins but work elsewhere are
most likely headed to work in
Denver, Boulder, or other cities to
the south.
Fort Collins pulls in its inbound
commuters mostly from surrounding
cities within the MSA.
Source: U.S. Bureau of the Census, Local Employment Dynamics (LED) database, 2002-2009.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 78
APPENDICES
inbound (net commuting into the City of Fort Collins)
outbound (net commuting out of the City of Fort Collins)
+8000 +8000 +8000 +8000
+7500 +7500 +7500 +7500
+7000 +7000 +7000 +7000
+6500 +6500 +6500 +6500
+6000 +6000 +6000 +6000
+5500 +5500 +5500 +5500
+5000 +5000 +5000 +5000
+4500 +4500 +4500 +4500
+4000 +4000 +4000 +4000
+3500 +3500 +3500 +3500
+3000 +3000 +3000 +3000
+2500 +2500 +2500 +2500
+2000 +2000 +2000 +2000
+1500 +1500 +1500 +1500
+1000 +1000 +1000 +1000
+500 +500 +500 +500
0 0 0 0
-500 -500 -500 -500
-1000 -1000 -1000 -1000
-1500 -1500 -1500 -1500
-2000 -2000 -2000 -2000
by age cohort by annual earnings
Under 30 30 to 54 55 or older <$15,000 $15k to $40k >$40,000
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
2002
2009
MIGRATION & MOBILITY
FIGURE 13: FORT COLLINS COMMUTING PATTERNS BY SOCIODEMOGRAPHIC CHARACTERISTICS
Variation by age, but less variation by earnings
Commuting patterns by
earnings show surprisingly little
variation in pattern over the past
several years.
Commuting patterns by age,
however, show one key trend:
the recession following the tech
boom appears to have impacted
younger workers more than
others. Those under the age of
30 were more likely to commute
out of the city for work in the first
half of the decade. This trend
has since reversed;; since 2006,
the city has pulled in more
workers under the age of 30
than it has lost. Still, this net
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 79
APPENDICES
MIGRATION & MOBILITY
FIGURE 14: NET DAILY COMMUTER FLOW TO/FROM CITY OF FORT COLLINS BY ECONOMIC SECTOR
City residents who work in
construction, wholesale trade,
transportation/warehousing,
and information/media sectors
are more likely to leave the city
limits for work than those who
work in other sectors of the
economy.
The city's education,
healthcare, and professional
services sectors draw
considerable inbound traffic, as
does the government sector.
The city's manufacturing sector
once attracted heavy inbound
commuting, but as recently as
2009, this inbound flow had
reversed.
Source: U.S. Bureau of the Census, Local Employment Dynamics (LED) database, 2002-2009.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 80
APPENDICES
INCOME & HOUSING
FIGURE 15:HOUSEHOLD SNAPSHOTS
Top 3 household segments in Fort Collins
#1 COLLEGE TOWNS #2 UP AND COMING FAMILIES #3 METROPOLITANS
Demographic
With a median age of 24.4 years, College Towns is
the third youngest of all the Tapestry segments. Most
residents are aged between 18 and 34 years and live
in single-person or shared households. One-fourth of
households are occupied by married-couple families.
The race profile of this market is somewhat similar to
the US profile. Approximately three-fourths of the
residents are white.
Up and Coming Families represents Tapestry
6HJPHQWDWLRQ¶V VHFRQG KLJKHVW KRXVHKROG JURZWK
market. Residents of these neighborhoods are young,
affluent families with younger children. Most of the
residents are white;; however, diversity is increasing
as the segment grows.
Residents of Metropolitans communities prefer to live
in older city neighborhoods. Approximately half of
these households are singles who live alone or with
others;; 40 percent are married-couple families. One in
four of the residents is aged 20±34 years. Diversity is
low;; most of the population is white.
Socioeconomic
College Town residents are focused on education.
Many residents are enrolled in the university and
others stay in the community to teach or do research.
Because many students only work part-time, the
median household income is low. Most of the
employed residents work in the service industry,
holding on- and off-campus jobs in educational
services, health care, and food preparation. In
addition, the median net worth is very low.
Residents of Up and Coming Families are earning
above-average incomes. The median household
income is $76,135, higher than the national median.
The median net worth is $175,142. Residents of this
segment are highly educated. Labor force
participation is high and unemployment is low.
The labor force participation rate is well above
average. Half of the residents who are employed work
in professional or managerial positions and they are
highly educated. The median household income is
$60,191;; the median net worth is $102,460.
Residential
Students in off-campus housing live in low-income
apartment rentals. Most of the owner-occupied
dwellings are single family. The median home value is
$137,707. One-third of the housing is single-family
structures.
Most residents live in new single-family housing;; more
than half the housing units were built in the last 10
years. Home ownership is at 83 percent. The median
home value is $175,637.
Residents of Metropolitans neighborhoods live in an
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 81
APPENDICES
#1 COLLEGE TOWNS #2 UP AND COMING FAMILIES #3 METROPOLITANS
Preferences
Convenience dictates food choices;; they usually buy ready-
made, easy-to-prepare, or frozen meals, frozen pasta, pizza
crusts, and peanut butter and jelly at the closest grocery
store. With their busy lifestyles, they frequently eat out or
order in from fast-IRRGUHVWDXUDQWVSDUWLFXODUO\0F'RQDOG¶V
:HQG\¶VDQGSL]]DRXWOHWVGXULQJWKHZHHN KRZHYHUPDQ\
cook at home over the weekend. They buy books online and
in stores. They have student loans and bank online or by
ATM. These computer-savvy students own laptop computers
or expensive desktop personal computers and the
peripherals to match. Connecting to the Internet is essential;;
they go online to research assignments, look for jobs, check
e-mail, and download music. Keeping in touch is also
important;; they buy and use cell phones and accessories.
New to living on their own, many College Towns residents
purchase bedding, bath, and cooking products. They own
few appliances but, at a minimum, have a microwave oven, a
toaster, and an upright vacuum cleaner. Their lifestyle is very
casual. They rank high for participating in nearly every
outdoor sport and athletic activity.
College Towns residents attend country music and rock
concerts and college basketball and football games, play
pool, and go to movies and bars. They also participate in
public activities including fund-raising and volunteer work.
They usually listen to alternative music on their MP3 players,
tune in to public radio, and watch MTV and Comedy Central
on cable TV. They shop at discount stores but prefer to buy
branded clothes from Old Navy, Gap, and Target.
Family and home dictate the products these residents
buy. Many are beginning or expanding their families, so
baby equipmHQW FKLOGUHQ¶V FORWKLQJ DQG WR\V DUH
essential purchases. Because many are first-time
homeowners, basic household furniture and lawn
fertilizer, weed control, and insecticide products are
important. Car loans and mortgage payments are major
household budget items. They are most likely to own or
lease an SUV or a minivan. They eat out at family
restaurants, especially on the weekends, and buy fast
food at the drive-through or for takeout.
They play softball, take the kids to the zoo, and visit
theme parks (generally Sea World or Disney World)
where they make good use of their digital camera or
camcorder. They rent comedy, family, and
action/adventure DVDs. Cable station favorites include
Country Music Channel, ESPN news, The Learning
Channel, and the Disney Channel. They listen to
country, soft rock, and contemporary hit radio.
Metropolitans residents are no different from other
owners of older homes who incur costs for maintenance
and remodeling. They will contract for lawn maintenance
and professional housecleaning services. Many will own
or lease a station wagon. Planning for the future,
residents own shares in investment funds, contribute to
IRA savings accounts, and hold large life insurance
policies.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 82
APPENDICES
INCOME & HOUSING
FIGURE 16: HOUSEHOLD COMPARISON
Household size, income, and housing stock
In Fort Collins, the
average household
size is below the
national average.
Housing demand
(reflected in
occupancy rates) is
relatively high, which
may put some
pressure on prices and
affordability. Six of
every 10 housing units
in the city has been
constructed since
1980. Barely 1 in 10
housing units in the
city predates the
1960s.
Note: The affordability ratio is the median home value divided by the median household income. The "ratio" equates the home price to raw
earning potential
(expressed in years of gross income needed to pay for the home) The lower the number, the more affordable the housing. Median household
income for the 9-
county region is an average of the counties weighted by the number of households. Median home prices in each county are weighted by the
number of occupied
housing units to estimate the 9-county median.
Source: U.S. Census Bureau (American Community Survey, 2009).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 83
APPENDICES
INCOME & HOUSING
FIGURE 17: DISTRIBUTION OF HOUSEHOLD INCOME
Share of total households by income level
Income distribution in the
City of Fort Collins closely
parallels the national
average. The main
difference is that Fort
Collins has a bulge of
households in the
$15,000-$25,000 range.
This bulge is likely to be
attributable to a high rate
of part-time employment
associated with the
college-age population.
Source: U.S. Census Bureau (American Community Survey, 2009).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 84
APPENDICES
INCOME & HOUSING
FIGURE 18: HOUSING AFFORDABILITY RATIOS
The easy rule-of-thumb for measuring
housing affordability is the ratio of median
home price to median household income.
This ratio is essentially the number of years
a typical household would need to pay for a
median-priced housing unit if, in theory,
100% of income were applied to the
principal until it was paid off. The lower the
ratio, the more affordable the housing.
Fort Collins' affordability index (4.9) exceeds
the national average by a wider margin than
either the state or the county. A large
student population keeps the city's median
income relatively low so this drives up the
affordability ratio, at least on paper. It's
important to note that most students in this
city are renters, so real affordability for
permanent residents may actually be better
than the data seem to suggest.
Note: Bubble sizes reflect relative affordability: Fort Collins (4.9), Larimer County (4.5), Colorado (4.3), US average (3.7).
Source: U.S. Census Bureau.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 85
APPENDICES
INCOME & HOUSING
FIGURE 19: CONSUMER SPENDING IN FORT COLLINS RELATIVE TO THE US
Extremes reflect age demographics of a college town
US average = 100 for each spending
category
ESRI developed metrics based on Census
Bureau data to estimate consumer spending
rates for various types of household
consumption.
In the City of Fort Collins, the patterns are
straightforward. The presence of CSU drives up
household spending rates for education and
computer equipment.
The city's young student population tends to be
healthy and not yet thinking about retirement, a
professional wardrobe, or furnishing a new
home, so consumer spending is relatively low in
these categories.
Source: ESRI;; US Bureau of Labor Statistics, Consumer Expenditure Surveys.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 86
APPENDICES
ECONOMY
FIGURE 20: AVERAGE ANNUAL UNEMPLOYMENT RATE, 1990-‐2011 (%)
Latest 2011 unemployment rate relative to the historical 2-‐decade range
Unemployment rates nationwide
rose to record highs during the
recent recession and have since
inched along toward gradual
improvement.
In the city of Fort Collins, the overall
historical range of unemployment as
well as the current rate tend to be
slightly higher than Larimer County
overall. Some of this is inevitable
due to the transient dynamics of a
college-age population. Whatever
the nuances may be between the
city and the county, the city is
nevertheless in slightly better shape
than either the US or the Colorado
state average.
Note: Because seasonal adjustment is not available for all jurisdictions, none of the rates shown (including comparables) are seasonally adjusted.
Source: U.S. Bureau of Labor Statistics, CPS (US rate) and LAUS (state & county rates).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 87
APPENDICES
ECONOMY
FIGURE 21: UNEMPLOYMENT RATES COMPARED
City's business cycle has converged more with the US since the tech bust
12-‐month moving average of the
seasonally unadjusted jobless rates
To put the city's unemployment rate in context, we
look back over the past 20 years.
The city's unemployment rate hit record lows during
the 1990s and never quite regained that edge
during the next decade.
Source: U.S. Bureau of Labor Statistics, LAUS (state & county rates).
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 88
APPENDICES
ECONOMY
FIGURE 22: THE UNEMPLOYMENT ROLLS
Unemployment trends of Fort Collins residents over the past three years
Monthly unemployment
numbers are not seasonally
adjusted, so they can only be
compared to the same month in
the previous year.
The recent recession has been one of
the most severe in recent memory. This
is true in the US as well as in the City of
Fort Collins.
From mid-2008 to mid-2009, the city's
unemployment rolls doubled. Since
then, total unemployment has floated
seasonally between 6,500 and 8,000.
On a rolling 12-month basis, one is able
to tease out incremental improvements
in the monthly data, but this positive
trend is weak and is still hard to see in
the raw monthly numbers.
Note: LAUS survey data reflect local household employment, i.e., the job status of employed residents. This is not the same as the local
job base.
Source: U.S. Bureau of Labor Statistics, LAUS program.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 89
APPENDICES
ECONOMY
FIGURE 23: ALLOCATION OF THE LOCAL PROPERTY TAX IN RECENT YEARS
Millage rates of overlapping governments; total rate applicable to most properties within the city
Millage rates
expressed in one-‐
thousandths. The
total mill levy of
86.488 in 2010 equals
about 86 cents per
$100 valuation.
The city's mill levy of 9.797
has remained steady for
more than a decade, even
as the tax rates applied by
other governmental units
have fluctuated.
Source: City of Fort Collins, 2011-2012 Biennial Budget;; Larimer County Assessor's Office.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 90
APPENDICES
ECONOMY
FIGURE 24: MUNICIPAL PROPERTY TAX BASE
Growing much faster than population on a per-‐resident basis
Despite a steady mill levy, the
city's rising property values
have raised the size of the tax
base in total as well as on a
per-resident basis.
The growth of the tax base on
a per-resident basis is
particularly important. Over
the decade, the property tax
base, as measured on a per-
resident basis, grew twice as
fast as the city's population.
Source: Colorado Division of Local Government, Colorado State Data Center (population);; City of Fort Collins, 2011-2012 Biennial Budget;; Larimer
County
Assessor's Office (property data).
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
$7.47
$8.97
$9.32
$12.57
$13.60
$62,928
$72,152
$73,345
$85,387
$86,200
$92,297
$13.91
City's estimated taxable property value
Total in US$ billions
City's estimated taxable property value
On a per-resident basis
$14.35
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 91
APPENDICES
ECONOMY
FIGURE 25: THE MAJOR
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 92
APPENDICES
ECONOMY
FIGURE 26: ALLOCATION OF THE LOCAL SALES AND USE TAX IN RECENT YEARS
While the city's mill levy rate
has held steady, the city's
sales and use rate rose by
0.85% beginning January 1,
2011.
The increase was approved
by voters in a November
2010 election. The 0.85%
incremental increase will
sunset at the end of 2020
unless it is reauthorized by
voters.
Source: City of Fort Collins, 2011-2012 Biennial Budget.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 93
APPENDICES
ECONOMY
FIGURE 27: MUNICIPAL SALES AND USE TAX BASE
Not keeping up with population on a per resident basis
While the bulk of the city's
revenues come from the sales
& use tax, this tax base has
grown much more slowly than
the property tax base over the
past decade. While taxable
sales increased in total terms
between 2000 and 2010, this
base barely grew when
measured on a per-resident
basis.
For every 100 residents in
2000, the city added an
additional 20 newcomers over
the course of the decade,
which puts an obvious strain
on service delivery. For every
$100 of taxable sales per
resident in 2000, the city had
$101 by 2010.
Source: Colorado Division of Local Government, Colorado State Data Center (population);; City of Fort Collins, 2011-2012 Biennial Budget (sales
& use tax data).
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
City's estimated sales & use tax base
On a per-resident basis
City's estimated sales & use tax base
Total in US$ billions
$1.80
$1.98
$1.97
$1.97
$2.02
$2.07
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 94
APPENDICES
ECONOMY
FIGURE 28: MUNICIPAL DEBT BURDEN Ȃ SIGNIFICANT IMPROVEMENTS ON A PER RESIDENT BASIS
For a fast-growing city, Fort
Collins enjoys a surprisingly
lighter debt burden today than
it did a decade ago. The city's
debt peaked at $213 million in
2004.
In 2010, the city's overall debt
was lower than in 2000. On a
per-resident basis, the debt
burden fell even faster from
$1584 per resident in 2000 to
just $1243 per resident in
2010.
Source: Colorado Division of Local Government, Colorado State Data Center (population);; City of Fort Collins, 2011-2012 Biennial Budget (outstanding
debt).
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2000 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2001 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2002 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2003 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2004 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2005 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2006 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2007 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2008 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2009 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
2010 ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ
City's outstanding debt
On a per-resident basis
City's outstanding debt
Total in US$ millions
$188
$187
$185
$172
$213
$198
$183
$167
$164
$172
$179
$1,584
$1,505
$1,456
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 95
APPENDICES
ECONOMY
FIGURE 29: VENTURE CAPITAL INVESTMENTS IN COLORADO
Quarterly VC investment volumes for the state of Colorado by industry, 1995Q1 to 2011Q1
Source: ThomsonReuters;; PricewaterhouseCoopers Moneytree.
Bubbles sizes reflect the relative dollar value of investments by industry and by quarter
The tech boom of the late 1990s brought a wave of venture capital investment into Colorado, especially in telecom, media, network hardware,
and software. A decade
later, investments in telecom, media, and network hardware are few and far between, but software has continued to pull in a steady stream
of capital from one quarter
to the next, through both recessions and booms.
In recent years, Colorado's energy and biotech activities have caught the attention of investors. Venture capital now flows into these sectors
as well.
Industrial/Energy
Biotech
Software
Financial Services
IT Services
Electronics/Instrumentation
Retailing/Distribution
Medical Devices & Equipment
Computers & Peripherals
Netw orking & Equipment
Media & Enertainment
Semiconductors
Consumer Products & Services
Business Products & Services
Telecommunication
Healthcare Services
4« «4
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 96
APPENDICES
ECONOMY
FIGURE 30: START-‐UP & EARLY STAGE VC INVESTMENTS IN COLORADO
Start-‐ups and early stage firms a share (%) of total VC investment volume and total VC deals
As the tech boom of the late 1990s
unraveled, venture capital investors
funneled less capital into risky start-ups and
early stage companies, preferring instead to
focus on more mature investments with
better risk/return profiles.
By 2006, Colorado's venture capital
investments began to shift once again
toward start-ups and early-stage
companies. Even during the recent
recession, capital has continued to flow into
young companies at a higher rate than in
the first half of the 2000s. Over the past
year, at least half of the VC deals completed
in Colorado have involved start-up or early-
stage companies.
Source: ThomsonReuters;; PricewaterhouseCoopers Moneytree.
0%
10%
20%
30%
40%
50%
60%
1995 Q4
1996 Q4
1997 Q4
1998 Q4
1999 Q4
2000 Q4
2001 Q4
2002 Q4
2003 Q4
2004 Q4
2005 Q4
2006 Q4
2007 Q4
2008 Q4
2009 Q4
2010 Q4
Share of total $ volume Share of total completed deals
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 97
APPENDICES
ECONOMY
FIGURE 31: THE JOB BASE IN THE FORT COLLINS MSA
Two years of setback but stronger growth in the decade ahead
Job losses in the current recession have pushed the MSA's employment base
in 2010 back down to the levels last seen in mid-2006.
EMSI's most recent forecast for the MSA shows employment growth re-igniting
in 2012 and then resuming a strong upward trajectory once again
Source: EMSI Complete Employment - 2011.2.
.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 98
APPENDICES
ECONOMY
FIGURE 32: JOB BASE BY INDUSTRY SECTOR IN THE FORT COLLINS MSA, 2010
In most urban economies, three sectors typically lead
the job market in overall terms²retail trade,
healthcare, and government. Because the government
sector as measured by EMSI encompasses all public
education, including CSU, it leads the MSA's economy
as the largest employer.
It is the next tier of sectors (after these first three) that
often tells us much about a local economy. In some
MSAs, it is manufacturing or transportation/
warehousing that ranks high. In boom years, it is
sometimes construction. In Fort Collins today, the
driver here is professional services.
Source: EMSI Complete Employment - 2011.2.
DRAFT ± City of Fort Collins, CO
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APPENDICES
ECONOMY
FIGURE 33: JOB GROWTH BY INDUSTRY SECTOR IN THE FORT COLLINS MSA
This chart compares the MSA's four years of job
growth (2003 through 2006) with the subsequent four
years when growth was slower or falling (2007
through 2010).
On a sector-by-sector basis, it was professional
services that drove the economy forward before the
recession hit. Since 2007, this sector has held
relatively flat.
Healthcare has proven highly resilient through the
downturn, and a few smaller sectors, including
finance/insurance.
The brunt of job losses have been absorbed in the
manufacturing and construction sectors. Retail trade
has also taken a hit.
DRAFT ± City of Fort Collins, CO
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APPENDICES
Source: EMSI Complete Employment - 2011.2.
ECONOMY
FIGURE 34: FORT COLLINS MSA INDUSTRY STRENGTHS RELATIVE TO THE US
Location quotient (LQ) analysis
US average for each industry = 1.00
Regional strength > 1.25
Regional weakness <0.75
The property and leasing sector has a high location quotient
but this may be due to the presence of CSU which has the
potential to generate above-average rental unit turnover.
More interesting among the LQs is the high rank of the
professional services sector.
Source: EMSI Complete Employment - 2011.2.
DRAFT ± City of Fort Collins, CO
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APPENDICES
ECONOMY
FIGURE 35: INDUSTRY SECTOR STRENGTHS RELATIVE TO THE US
Location quotients for the Fort Collins MSA at the 5-‐digit NAICS level. Based on industries that employed at least 400 workers in the
MSA (Larimer County) in 2010.
Note: NAICS code 334119 (Other Computer Peripheral Equipment Manufacturing) did not employ 400 in 2010, but because its losses since 2001 have
been so severe, it was added back into\ the analysis for
reference purposes.
Source: EMSI Complete Employment - 2011.2.
Locaton quotitent descriptions: extremely high (> 3.00)
above average (>1.25)
average (between 0.75 and 1.25)
below average (<0.75)
Net Chg
Since 2001
Broad sector 3-digit code & description LQ Jobs Avg.
Earnings
No. of
Estabs.
Net Job
Gain (Loss)
Manufacturing 312120 Breweries 32.65 921 $71,574 5 +265
Manufacturing 333618 Other Engine Equipment Manufacturing 27.68 1,208 $61,184 2 +307
Manufacturing 334516 Analytical Laboratory Instrument Manufacturing 20.88 721 $66,132 5 +175
Manufacturing 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals 15.26 702 $137,805 10 -1,924
Manufacturing 334111 Electronic Computer Manufacturing 9.52 938 n/a n/a -409
Manufacturing 334418 Printed Circuit Assembly (Electronic Assembly) Manufacturing 9.10 494 $82,852 5 -497
Construction 238122 Nonresidential structural steel and precast concrete contractors 7.65 554 $53,801 8 +201
Administrative services 561422 Telemarketing Bureaus and Other Contact Centers 4.42 1,919 $19,755 17 +1,811
Information & media 511120 Periodical Publishers 4.01 712 $45,177 21 -17
Professional & technical services 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) 3.50 1,752 $121,444 32 +1,488
Professional & technical services 541620 Environmental Consulting Services 2.76 406 $44,241 50 +141
Healthcare & social assistance 622310 Specialty (except Psychiatric and Substance Abuse) Hospitals 2.64 580 $80,892 1 +580
Property sales & leasing 531190 Lessors of Other Real Estate Property 2.63 575 $41,696 18 +168
Finance & insurance 523910 Miscellaneous Intermediation 2.51 1,007 $24,464 16 +746
Healthcare & social assistance 621399 Offices of All Other Miscellaneous Health Practitioners 2.49 851 $22,151 58 +417
Manufacturing 334413 Semiconductor and Related Device Manufacturing 2.42 481 $91,981 5 +188
Professional & technical services 541940 Veterinary Services 2.38 830 $25,925 75 +156
Property sales & leasing 531130 Lessors of Miniw arehouses and Self-Storage Units 2.34 870 $28,001 23 +446
Construction 238312 Nonresidential drywall contractors 2.18 464 $38,175 9 -70
Retail trade 451110 Sporting Goods Stores 2.09 635 $17,687 62 +56
Government (incl. public ed.) 920000 State government 2.01 11,613 $38,864 21 +438
Professional & technical services 541330 Engineering Services 1.86 2,017 $61,728 202 +28
Arts, entertainment, & recreation 713990 All Other Amusement and Recreation Industries 1.85 481 $13,836 35 +15
Construction 238321 Residential painting contractors 1.81 522 $20,714 68 -70
Retail trade 453310 Used Merchandise Stores 1.81 499 $14,936 26 +114
Construction 238991 All other residential trade contractors 1.80 579 $16,943 45 -1
Retail trade 452910 Warehouse Clubs and Supercenters 1.76 2,206 $22,523 7 +1,639
Retail trade 454390 Other Direct Selling Establishments 1.76 2,042 $5,616 23 +195
Construction 238222 Nonresidential plumbing and HVAC contractors 1.76 1,008 $53,251 36 +70
Professional & technical services 541990 All Other Professional, Scientific, and Technical Services 1.74 2,055 $32,411 90 -422
Administrative services 561990 All Other Support Services 1.69 511 $45,357 39 -245
Property sales & leasing 531311 Residential Property Managers 1.67 1,037 $17,811 69 +440
Property sales & leasing 531120 Lessors of Nonresidential Buildings (except Miniw arehouses) 1.65 1,192 $30,894 32 +431
Arts, entertainment, & recreation 711510 Independent Artists, Writers, and Performers 1.63 1,928 $13,029 47 +347
Oil, gas, & mining 211111 Crude Petroleum and Natural Gas Extraction 1.63 1,370 $60,141 10 +840
Arts, entertainment, & recreation 713940 Fitness and Recreational Sports Centers 1.59 1,158 $9,420 44 +444
Retail trade 453220 Gift, Novelty, and Souvenir Stores 1.55 487 $15,003 67 -184
DRAFT ± City of Fort Collins, CO
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APPENDICES
WORKFORCE
FIGURE 36: TWO SCENARIOS OF JOB PERFORMANCE: NATIONAL TRENDS VS. LOCAL TRENDS
Employment growth history (2002-‐2010) and forecast (2011-‐2021)
Dark shading represents
the local median; yellow
bar represents the national
range between the 10th
and 90th percentiles.
Job growth in the MSA over the
past decade outperformed the
national average in most years.
The MSA's recovery is a little slow,
but EMSI forecasts job
performance here to pull ahead of
the US average in 2012, then
regress back toward national
trends.
Source: EMSI Complete Employment - 2011.2.
-5%
-4%
-3%
-2%
-1%
+0%
+1%
+2%
+3%
+4%
+5%
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
MSA US
forecast
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 103
APPENDICES
WORKFORCE
FIGURE 37: MEDIAN HOURLY WAGE RATE BY OCCUPATIONAL GROUP
MSA median wage presented in the context of the national wage range
Circle represents the county median; line
represents the national range between the 10th
and 90th percentiles
Skilled workers in the Fort Collins MSA draw higher salaries
than other occupational groups. Engineers, computer
scientists, healthcare professionals, attorneys, educators,
scientists, and managers command the MSA's highest
median wages.
At the other end of the spectrum, support workers in food
services and property maintenance earn median wages that
skirt just above the minimum wage.
(QJLQHHULQJ SURIHVVLRQDOV DUH E\ IDU WKH 06$¶V EHVW SDLG
occupational group.
Source: EMSI Complete Employment - 2011.2.
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 104
APPENDICES
WORKFORCE
FIGURE 38: FORT COLLINS MSA'S 2010 JOB BASE BY OCCUPATIONAL GROUP
More than one-quarter of the MSA's workers are employed in
occupations that involve sales or office administration. This is
not an unusual occupational pattern in an urban county.
Even though the MSA has a high LQ for professional services,
it's notable that the occupational groups that contribute to this
sector -- computer specialists, engineers, scientists -- each
provide only about 4,000 to 5,000 jobs in the MSA. These are
relatively small numbers compared to, say, food service
workers who number 13,000.
Source: EMSI Complete Employment - 2011.2.
DRAFT ± City of Fort Collins, CO
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APPENDICES
WORKFORCE
FIGURE 39: FORT COLLINS MSA'S OCCUPATIONAL GROUP CONCENTRATIONS
Industries by row; occupations in columns
Location quotient (LQ) analysis
US average for each industry = 1.00
Regional strength > 1.25
Regional weakness <0.75
Even though the MSA supports fewer than
4,000 science-related jobs and 5,000
engineering-related jobs, these occupational
groups are large enough to generate relatively
high location quotients.
Source: EMSI Complete Employment - 2011.2.
DRAFT ± City of Fort Collins, CO
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APPENDICES
WORKFORCE
FIGURE 40: FORT COLLINS MSA'S OCCUPATIONAL JOB TRENDS, 2007 THROUGH 2010
A wide gap in the types of jobs gained and lost
The MSA's job performance over
the past four years has differed
sharply across occupational groups.
Blue-collar jobs in construction,
production, and transportation have
suffered relatively heavy losses.
Other occupations have held up well
during tough times. Jobs in
business, healthcare, management,
education, and computers have
turned in gains over at least three of
the past four years (if not all four).
Source: EMSI Complete Employment - 2011.2.
3-year
Net
Change
+1,771
+1,484
+1,019
+885
+757
+604
+588
+548
+505
+391
+317
+309
+265
+115
+82
+76
+2
-67
-274
-277
-686
-1,176
-2,877
Source: EMSI Complete Employment - 2011.2
-3,000
-2,500
-2,000
-1,500
-1,000
-500
+0
+500
+1,000
+1,500
+2,000
Construction & extraction
Production
Transportation & material moving
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 107
APPENDICES
WORKFORCE
FIGURE 41: EDUCATIONAL ATTAINMENT INDICATES STRONG LOCAL SKILLS AVAILABILITY
Highest level of education achieved by the population age 25 or older
Educational attainment
levels in the Fort Collins
MSA are well beyond the
state and national
averages. Some 41% of
the MSA's adult residence
have a 4-year degree or
higher. In the City of Fort
Collins itself the
attainment rate is 49%.
Source: U.S. Census Bureau (American Community Survey, 2009).
no high school diploma
high school diploma or GED
some college but less than a 4-year degree
bachelor's degree or higher
USA Colorado Fort Collins City of
MSA Fort Collins
15%
28%
29%
28%
11%
23%
31%
36%
7%
20%
32%
41%
6%
15%
30%
49%
compare to next
exhibit
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 108
APPENDICES
On-the-job training or previous experience
Vocational or 2-year degree
4-year degree or higher
2001 2011 2021
25%
65% 9%
27%
62% 11%
28%
12%
60%
WORKFORCE
FIGURE 42: ǥ
DRAFT ± City of Fort Collins, CO
TIP Strategies, Inc. Theory Into Practice 109
APPENDICES
WORKFORCE
FIGURE 43: ǥTHOUGH SOME EMPLOYERS STRUGGLE TO FIND THE SKILLS THEY NEED-‐
147 H1B applications were filed in the City of Fort Collins in FY 2010
Source: US Department of Labor, Office of Foreign Labor Certification.
Yet even if Fort Collins suffers from underemployment of existing residents, a few employers still struggle to find the skills they need.
In FY 2010, employers seeking to
fill vacancies within the City of Fort Collins filed 147 applications for H1B visas for their employees. About 4 of every 5 applications
were approved. Most were in fields
relating to computers, science, or education. CSU filed the most applications (which includes things like post-doc work) but many of these
H1B applications came from
high tech companies looking to fill local jobs.
Colorado State University
Advanced Energy Industries
Certified Avago Technologies US
Denied certification Advanced Micro Devices; Centers for Disease Control & Prevention DHHS;
Withdrawn before certification Larsen & Toubro; Palladius
Certified but later withdrawn USDA Agricultural Research Service; Wipro
Cherokee Services Group; LSI Corp; New Century Software; Pacesetter
International
Apolent Corp; Fujitsu America; HP Enterprise Services; Intellectual
Business Resolutions; International Technology Solutions; JSMN
International; Object Technology Solutions; One Tribe Creative; Otterbox
FCDC; Pelco; Poudre School District; Rocky Mountain Bird Observatory;
SRM Technologies
Acnovate Corp; AT&T; Ayres Associates; Beckman Coulter; Broadcom
Corp; Cambridge Healthcare; Columbus Technologies & Services; Cyber
Sphere; DGN Technologies; ESC Engineering; Front Range Community
Computer & mathematical science ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ College; Hew lett Packard Company; Mindlance; New Belgium Brewing
Life, physical, & social science ŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰŰ Company; Nexlink Systems; Punatar; Software Specialists; Sogeti USA
Architecture & engineering ŰŰŰŰŰŰŰŰŰŰŰŰ ESAB Group; Tollmar; Turning Point Center for Youth & Family Development;
Education, training, & library ŰŰŰŰŰ Vedi Technologies; V-Soft Consulting Group; Zeninfotech
Management ŰŰŰ
Business & financial operations ŰŰŰ
Arts, design, & media ŰŰ
Healthcare (technical) Ű
Community & social services Ű
Sales
5
3
2
1
4
38
7
6
H1B applications by occupational group
56
32
25
10
7
6
5
3
2
1
H1B applications by approval status H1B applications by employer
81%
10%
7% 3%
THE MSA IMPLIES WEAK DEMAND FOR SKILLSǥ
The threshold skill level required of the MSA's existing job base
While the MSA's educational attainment rates are outstanding, the
job base is a bit perplexing. According to the American
Community Survey, 41% of the MSA's adults age 25 or older hold
a 4-year degree or more. Yet an occupational analysis of all the
current jobs in the entire MSA in 2011 shows that only 27% require
a 4-year degree.
Part of this discrepancy can be explained by the mismatched data
sources themselves. Educational attainment includes residents of
the MSA age 25 or older, regardless of place of employment. The
graph above represents the MSA's total job base (including part-
time work and work held by those under the age of 25 or those
living outside the MSA). This helps explain part of the data
discrepancy, but certainly not all.
Source: EMSI Complete Employment - 2011.2.
On-the-job training or previous experience
Vocational or 2-year degree
4-year degree or higher
2001 2011 2021
25%
65% 9%
27%
62% 11%
28%
12%
60%
Architecture & engineering
Installation, maintenance, & repair
Science
Farming, fishing, & forestry
Food preparation & serving
Legal
Military
Property maintenance
Protective service
Community & social services
Arts, design, & media
Computer & mathematical science
Healthcare (support)
Education, training, & library
Office & administrative support
Personal care & service
Sales
Management
Healthcare (technical)
Business & financial operations
2007 2008 2009 2010
Construction 238911 Residential site preparation contractors 1.53 420 $25,965 43 -81
Information & media 518210 Data Processing, Hosting, and Related Services 1.52 526 $40,529 17 +334
Finance & insurance 522292 Real Estate Credit 1.41 403 $61,713 17 +252
Property sales & leasing 531390 Other Activities Related to Real Estate 1.38 1,792 $11,884 10 +686
Professional & technical services 541690 Other Scientific and Technical Consulting Services 1.35 471 $39,855 54 +277
Personal & other services 811490 Other Personal and Household Goods Repair and Maintenance 1.32 418 $20,464 14 +27
Manufacturing 334119 Other Computer Peripheral Equipment Manufacturing* 1.32 55 n/a n/a -3,292
Restaurants, bars, & hotels 722410 Drinking Places (Alcoholic Beverages) 1.30 585 $15,319 44 -170
Restaurants, bars, & hotels 722110 Full-Service Restaurants 1.29 6,423 $15,442 243 +579
Property sales & leasing 531210 Offices of Real Estate Agents and Brokers 1.29 2,942 $11,746 187 +888
Transportation & warehousing 493110 General Warehousing and Storage 1.28 855 $35,211 8 -117
Professional & technical services 541219 Other Accounting Services 1.27 761 $16,874 72 +174
Restaurants, bars, & hotels 721110 Hotels (except Casino Hotels) and Motels 1.26 2,029 $20,756 88 +293
Restaurants, bars, & hotels 722213 Snack and Nonalcoholic Beverage Bars 1.26 672 $11,928 67 +68
Administrative services 561730 Landscaping Services 1.25 1,477 $21,203 148 +352
Professional & technical services 541511 Custom Computer Programming Services 1.25 1,132 $69,565 158 +357
Construction 236220 Commercial and Institutional Building Construction 1.25 833 $60,252 71 -137
Professional & technical services 541512 Computer Systems Design Services 1.24 1,137 $59,985 199 +346
Healthcare & social assistance 623312 Homes for the Elderly 1.24 518 $18,622 22 +157
Personal & other services 812112 Beauty Salons 1.23 867 $24,486 89 +233
Retail trade 443112 Radio, Television, and Other Electronics Stores 1.22 452 $26,357 33 +49
Construction 238221 Residential plumbing and HVAC contractors 1.17 619 $36,957 126 -470
Healthcare & social assistance 621340 Offices of Physical, Occupational and Speech Therapists, and Audiologists 1.16 475 $27,706 45 +218
Finance & insurance 523930 Investment Advice 1.14 1,289 $17,190 38 +689
Retail trade 444110 Home Centers 1.12 778 $27,132 10 +175
Healthcare & social assistance 621210 Offices of Dentists 1.11 1,073 $42,506 173 +252
Finance & insurance 523920 Portfolio Management 1.11 1,053 $26,232 14 +595
Restaurants, bars, & hotels 722211 Limited-Service Restaurants 1.08 4,150 $12,175 238 +755
Property sales & leasing 531110 Lessors of Residential Buildings and Dw ellings 1.06 1,460 $20,950 57 +108
Finance & insurance 523120 Securities Brokerage 1.06 531 $69,599 54 +186
Construction 236118 Residential Remodelers 1.05 608 $52,797 104 +147
Personal & other services 811111 General Automotive Repair 1.05 514 $36,012 83 +36
Construction 238912 Nonresidential site preparation contractors 1.04 459 $31,109 19 -71
Personal & other services 812990 All Other Personal Services 1.03 499 $28,472 16 +42
Healthcare & social assistance 621111 Offices of Physicians (except Mental Health Specialists) 1.02 2,795 $70,454 161 +633
Finance & insurance 524210 Insurance Agencies and Brokerages 1.01 1,252 $30,444 160 +266
Professional & technical services 541611 Administrative Management and General Management Consulting Services 1.00 850 $35,232 101 +431
Retail trade 441110 New Car Dealers 0.98 959 $46,539 12 -110
Construction 236115 New Single-Family Housing Construction (except Operative Builders) 0.97 573 $57,065 129 -910
Finance & insurance 522110 Commercial Banking 0.96 1,388 $45,516 91 +231
Healthcare & social assistance 624120 Services for the Elderly and Persons w ith Disabilities 0.96 781 $17,957 17 +457
Administrative services 561720 Janitorial Services 0.94 1,867 $9,982 87 +249
NAICS Classification Level in 2010
Locaton quotitent descriptions: extremely high (> 3.00)
above average (>1.25)
average (between 0.75 and 1.25)
below average (<0.75)
Net Chg
Since 2001
Broad sector 3-digit code & description LQ Jobs Avg.
Earnings
No. of
Estabs.
Net Job
Gain (Loss)
Manufacturing 312120 Breweries 32.65 921 $71,574 5 +265
Manufacturing 333618 Other Engine Equipment Manufacturing 27.68 1,208 $61,184 2 +307
Manufacturing 334516 Analytical Laboratory Instrument Manufacturing 20.88 721 $66,132 5 +175
Manufacturing 334515 Instrument Manufacturing for Measuring and Testing Electricity and Electrical Signals 15.26 702 $137,805 10 -1,924
Manufacturing 334111 Electronic Computer Manufacturing 9.52 938 n/a n/a -409
Manufacturing 334418 Printed Circuit Assembly (Electronic Assembly) Manufacturing 9.10 494 $82,852 5 -497
Construction 238122 Nonresidential structural steel and precast concrete contractors 7.65 554 $53,801 8 +201
Administrative services 561422 Telemarketing Bureaus and Other Contact Centers 4.42 1,919 $19,755 17 +1,811
Information & media 511120 Periodical Publishers 4.01 712 $45,177 21 -17
Professional & technical services 541712 Research and Development in the Physical, Engineering, and Life Sciences (except Biotechnology) 3.50 1,752 $121,444 32 +1,488
Professional & technical services 541620 Environmental Consulting Services 2.76 406 $44,241 50 +141
Healthcare & social assistance 622310 Specialty (except Psychiatric and Substance Abuse) Hospitals 2.64 580 $80,892 1 +580
Property sales & leasing 531190 Lessors of Other Real Estate Property 2.63 575 $41,696 18 +168
Finance & insurance 523910 Miscellaneous Intermediation 2.51 1,007 $24,464 16 +746
Healthcare & social assistance 621399 Offices of All Other Miscellaneous Health Practitioners 2.49 851 $22,151 58 +417
Manufacturing 334413 Semiconductor and Related Device Manufacturing 2.42 481 $91,981 5 +188
Professional & technical services 541940 Veterinary Services 2.38 830 $25,925 75 +156
Property sales & leasing 531130 Lessors of Miniw arehouses and Self-Storage Units 2.34 870 $28,001 23 +446
Construction 238312 Nonresidential drywall contractors 2.18 464 $38,175 9 -70
Retail trade 451110 Sporting Goods Stores 2.09 635 $17,687 62 +56
Government (incl. public ed.) 920000 State government 2.01 11,613 $38,864 21 +438
Professional & technical services 541330 Engineering Services 1.86 2,017 $61,728 202 +28
Arts, entertainment, & recreation 713990 All Other Amusement and Recreation Industries 1.85 481 $13,836 35 +15
Construction 238321 Residential painting contractors 1.81 522 $20,714 68 -70
Retail trade 453310 Used Merchandise Stores 1.81 499 $14,936 26 +114
Construction 238991 All other residential trade contractors 1.80 579 $16,943 45 -1
Retail trade 452910 Warehouse Clubs and Supercenters 1.76 2,206 $22,523 7 +1,639
Retail trade 454390 Other Direct Selling Establishments 1.76 2,042 $5,616 23 +195
Construction 238222 Nonresidential plumbing and HVAC contractors 1.76 1,008 $53,251 36 +70
Professional & technical services 541990 All Other Professional, Scientific, and Technical Services 1.74 2,055 $32,411 90 -422
Administrative services 561990 All Other Support Services 1.69 511 $45,357 39 -245
Property sales & leasing 531311 Residential Property Managers 1.67 1,037 $17,811 69 +440
Property sales & leasing 531120 Lessors of Nonresidential Buildings (except Miniw arehouses) 1.65 1,192 $30,894 32 +431
Arts, entertainment, & recreation 711510 Independent Artists, Writers, and Performers 1.63 1,928 $13,029 47 +347
Oil, gas, & mining 211111 Crude Petroleum and Natural Gas Extraction 1.63 1,370 $60,141 10 +840
Arts, entertainment, & recreation 713940 Fitness and Recreational Sports Centers 1.59 1,158 $9,420 44 +444
Retail trade 453220 Gift, Novelty, and Souvenir Stores 1.55 487 $15,003 67 -184
Construction 238911 Residential site preparation contractors 1.53 420 $25,965 43 -81
Information & media 518210 Data Processing, Hosting, and Related Services 1.52 526 $40,529 17 +334
Finance & insurance 522292 Real Estate Credit 1.41 403 $61,713 17 +252
Property sales & leasing 531390 Other Activities Related to Real Estate 1.38 1,792 $11,884 10 +686
Professional & technical services 541690 Other Scientific and Technical Consulting Services 1.35 471 $39,855 54 +277
Personal & other services 811490 Other Personal and Household Goods Repair and Maintenance 1.32 418 $20,464 14 +27
Manufacturing 334119 Other Computer Peripheral Equipment Manufacturing* 1.32 55 n/a n/a -3,292
Restaurants, bars, & hotels 722410 Drinking Places (Alcoholic Beverages) 1.30 585 $15,319 44 -170
Restaurants, bars, & hotels 722110 Full-Service Restaurants 1.29 6,423 $15,442 243 +579
Property sales & leasing 531210 Offices of Real Estate Agents and Brokers 1.29 2,942 $11,746 187 +888
Transportation & warehousing 493110 General Warehousing and Storage 1.28 855 $35,211 8 -117
Professional & technical services 541219 Other Accounting Services 1.27 761 $16,874 72 +174
Restaurants, bars, & hotels 721110 Hotels (except Casino Hotels) and Motels 1.26 2,029 $20,756 88 +293
Restaurants, bars, & hotels 722213 Snack and Nonalcoholic Beverage Bars 1.26 672 $11,928 67 +68
Administrative services 561730 Landscaping Services 1.25 1,477 $21,203 148 +352
Professional & technical services 541511 Custom Computer Programming Services 1.25 1,132 $69,565 158 +357
Construction 236220 Commercial and Institutional Building Construction 1.25 833 $60,252 71 -137
Professional & technical services 541512 Computer Systems Design Services 1.24 1,137 $59,985 199 +346
Healthcare & social assistance 623312 Homes for the Elderly 1.24 518 $18,622 22 +157
Personal & other services 812112 Beauty Salons 1.23 867 $24,486 89 +233
Retail trade 443112 Radio, Television, and Other Electronics Stores 1.22 452 $26,357 33 +49
Construction 238221 Residential plumbing and HVAC contractors 1.17 619 $36,957 126 -470
Healthcare & social assistance 621340 Offices of Physical, Occupational and Speech Therapists, and Audiologists 1.16 475 $27,706 45 +218
Finance & insurance 523930 Investment Advice 1.14 1,289 $17,190 38 +689
Retail trade 444110 Home Centers 1.12 778 $27,132 10 +175
Healthcare & social assistance 621210 Offices of Dentists 1.11 1,073 $42,506 173 +252
Finance & insurance 523920 Portfolio Management 1.11 1,053 $26,232 14 +595
Restaurants, bars, & hotels 722211 Limited-Service Restaurants 1.08 4,150 $12,175 238 +755
Property sales & leasing 531110 Lessors of Residential Buildings and Dw ellings 1.06 1,460 $20,950 57 +108
Finance & insurance 523120 Securities Brokerage 1.06 531 $69,599 54 +186
Construction 236118 Residential Remodelers 1.05 608 $52,797 104 +147
Personal & other services 811111 General Automotive Repair 1.05 514 $36,012 83 +36
Construction 238912 Nonresidential site preparation contractors 1.04 459 $31,109 19 -71
Personal & other services 812990 All Other Personal Services 1.03 499 $28,472 16 +42
Healthcare & social assistance 621111 Offices of Physicians (except Mental Health Specialists) 1.02 2,795 $70,454 161 +633
Finance & insurance 524210 Insurance Agencies and Brokerages 1.01 1,252 $30,444 160 +266
Professional & technical services 541611 Administrative Management and General Management Consulting Services 1.00 850 $35,232 101 +431
Retail trade 441110 New Car Dealers 0.98 959 $46,539 12 -110
Construction 236115 New Single-Family Housing Construction (except Operative Builders) 0.97 573 $57,065 129 -910
Finance & insurance 522110 Commercial Banking 0.96 1,388 $45,516 91 +231
Healthcare & social assistance 624120 Services for the Elderly and Persons w ith Disabilities 0.96 781 $17,957 17 +457
Administrative services 561720 Janitorial Services 0.94 1,867 $9,982 87 +249
0.92
NAICS Classification Level in 2010
$1,338
$1,620
$1,495
$1,243
$1,355
$1,215
$1,171
$1,204
19.6%
-20.3%
-30%
-25%
-20%
-15%
-10%
-5%
0%
5%
10%
15%
20%
Cumulative annual
growth rates of the
city's population,
2001-2010
Cumulative annual
growth rates of the
city's outstanding
debt on a per-
resident basis,
2001-2010
$2.21
$2.25
$2.24
$2.13
$2.19
$15,151
$15,925
$15,475
$15,323
$15,403
$15,656
$15,228
$16,338
$16,355
$15,963
$14,897
19.6%
1.1%
-2%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Cumulative annual
growth rates of the
city's population,
2001-2010
Cumulative annual
growth rates of the
city's sales & use
tax base on a per-
resident basis,
2001-2010
ǯS REVENUE
Combined sales and use taxes far outweigh property taxes as a revenue source)
Total annual levies and
collections since 1999
(US$ millions)
The revenue gains the city
enjoyed from rising property
values were only a small part
of the overall revenue stream.
The city actually draws much
more of its revenues from
sales and use taxes.
Source: City of Fort Collins, 2011-2012 Biennial Budget;; Larimer County Assessor's Office.
$14.52
$10.97
$11.33
$12.23
$93,078
$98,949
$99,306
$100,429
$100,845
0%
10%
20%
30%
40%
50%
60%
Cumulative
annual growth
rates of the city's
population, 2001-
2010
Cumulative
annual growth
rates of the city's
sales & use tax
base on a per-
resident basis,
2001-2010
These residents pursue an active, urbane lifestyle. They
travel frequently for business and pleasure. They listen
to jazz, classical, public, and alternative music radio.
They go to rock concerts, watch foreign films on DVD,
UHDG ZRPHQ¶V IDVKLRQ PDJD]LQHV DQG SOD\ D PXVLFDO
instrument. They also practice yoga and go kayaking,
hiking/backpacking, and water and snow skiing.
Active members of their communities, Metropolitans
residents join civic clubs, volunteer for environmental
causes, address public meetings, and work for a political
party or candidate. They also belong to business clubs
and contribute to PBS. They prefer to own and use a
laptop computer, preferably an Apple. They go online
daily to download music and buy books, airline tickets,
CDs, and clothes. They also order merchandise by mail
or over the phone.
Note: ESRI defines the US population into 65 market or "tapestry" segments. According to ESRI, these are the three segments that most closely
fit Fort Collins residents (text verbatim from ESRI).
Source: ESRI.
eclectic mix of single-family homes and multiunit
buildings. Sixty percent of the housing units were built
before 1960. The home ownership rate is 60 percent,
and the median home value is $192,372.
margin is slim compared to
other age groups.
Source: U.S. Bureau of the Census, Local Employment Dynamics (LED) database, 2002-2009.
residents a year on a net
basis.exceeds the number of jobs
in the city by more than 2,000.
Source : US Internal Revenue Service, county-to-county migration flows;; Moodys Analytics.
US averages.
Note: "Family origins" is calculated from Census tabulations across multiple categories, including ancestry, race, & ethnicity;; "Military service"
is calculated
on the population age 18 or older.
Source: U.S. Census Bureau (American Community Survey, 2005-2009 average).
ǯPOPULATION OUTLOOK
No changes Expected in recent growth pattern
The Colorado State Data Center's
most recent population forecast
shows the Fort Collins MSA on
track to reach 500,000 in 30 years.
As of the 2010 Census, the MSA
population was approaching
300,000, growing almost 19%
since the 2000 census.
The Colorado State Data Center's
forecast represents a net increase
of about 200,000 residents over the
next 3 decades, a 66% increase.
Source: Moody's Analytics;; U.S. Census Bureau (1970-1999);; Colorado Division of Local Government, Colorado State Data Center (2000-2040).
ǯULATION OUTLOOK
A Decade Of Change
The population of Fort Collins pushed close to 144,000 residents
in the 2010 Census.
The Fort Collins MSA added about 48,000 new residents over
the decade. Half of these were added in the City of Fort Collins
with the remainder mostly in other incorporated areas of the
county.
The unincorporated areas of the county held relatively steady in
population during the decade.
Source: Colorado Division of Local Government, Colorado State Data Center.
collaborate
more closely with
CSU
natural assets /
outdoor
playground
top 5 states to
do business
(CNBC)
fiscal
sustainability
educated
workforce
proximity to
Denver
regional ED
collaboration with
Denver, Boulder,
climateSprings Colorado
change
unstable
commodity markets immigration
restrictions
political
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progressive
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marketed
healthcare
system &
PVHS strong
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economic
health
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national / international
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commercial
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aging commercial
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access to
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innovation
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CSU
retention of
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Old
Town
federal deficit &
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higher
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arts
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