El Paso County residents are highly educated, younger than many expect and paid lower wages than peers in competitive regions throughout the state.
Those were a few of the takeaways during Vectra Bank’s annual Pikes Peak Economic Forecast Breakfast, which took place April 18 at the Cheyenne Mountain Resort.
Despite some hurdles, local data continues to point to strong economic growth in the Pikes Peak region, and particularly in Colorado Springs, according to presentations by Mayor John Suthers and Tatiana Bailey, director of the UCCS Economic Forum [see By the Numbers, page 22].
“I bet you didn’t know this, but we’re really young,” Bailey said. “The [national] median age is about 38 and in El Paso County, it’s about 34.” Teller County has a median age of nearly 50 years old, she said.
Regarding El Paso County, Bailey said prime working-age demographics are growing, “which bodes very well for our future workforce and our current workforce. So that’s good news.”
As for higher education, those with a bachelor’s degree or higher make up about 32 percent of Teller County and 36 percent of El Paso County. Colorado’s advanced education rate hovers around 39 percent and the national average is 31 percent.
“We’re quite educated and that also bodes well for us moving forward,” she said.
But, according to Bailey, the region still grapples with “structural issues,” including a low employment-to-population ratio and lower average salaries.
In 2015, per capita personal income by MSA placed Colorado Springs below many of its state counterparts. Average local income was just below $45,000, compared with just more than $45,000 in Fort Collins, more than $55,000 in Denver and $60,000 in Boulder. The national average in 2015 was about $50,000.
Bailey also discussed housing and provided data indicating that in the fourth quarter of 2016, Colorado Springs had a median home price of $257,000, an 8.5 percent increase from the fourth quarter of 2015. Compared with the rest of the state, Denver saw a 7.9 percent increase during the same time, and the median price of a home in or near the state capital was $381,600.
Boulder was up 5.3 percent and the median home price there is nearly a half-million dollars. Of 180 measured MSAs, Boulder boasts the seventh-most-expensive home prices nationally, while Denver is ranked 14th. Colorado Springs comes in at 31st. Homes are selling at 99.4 percent of the listing price and homes are on the market for about 40 days.
When it comes to single- and multi-family residential building permits, Bailey said the area was likely overbuilt in the 2000s prior to the recession, and then permits took a dive.
“Now we’re at about the equilibrium [of 4,500 permits], and that’s something to watch because you don’t want to overbuild,” she said. “That’s where you get bubbles.” Through the first quarter of 2017, Colorado Springs witnessed far lower commercial rental rates than Denver. The average rental cost of retail space in Colorado Springs to start the year was about $12.55 per square foot, compared to more than $20 in Denver. Office space in Colorado Springs averages nearly $16 per square foot and Denver reported rates of more than $29 per square foot. Industrial space is more comparative at $6.45 per square foot in Colorado Springs compared to $6.82 in Denver.
The mayor’s perspective
Suthers reiterated three things he thought needed to be done in the city when he was elected mayor nearly two years ago, “to get our city moving from an economic perspective.”
The first step was creating a more stable political environment.
“[The city needed] a much more collaborative relationship between the mayor and city council,” Suthers said. “Because, as many of you may know, if you have a fractious relationship that’s in the [newspapers] all the time, it’s simply not conducive to economic and community development.”
Suthers said his second focus was dealing with long-neglected infrastructure problems, to include roadways and stormwater systems.
“Roadways because they were terrible and stormwater because we’ve had some pretty serious legal problems developing as a result of voter action in 2009 doing away with a stormwater enterprise,” he said.
Thirdly, there has been an increased focus on what government can do to facilitate job growth in the region.
“We’ve done things at the [Colorado Springs Airport] like [implement] the Commercial Aeronautic Zone to encourage business investment in Colorado Springs.
“We’ve come a long way and we have much more stable growth … in the last two years. I give credit to city council in that regard,” the mayor said. “We are swearing in three new city [councilors] today and I hope that will continue the stability. We need to remain focused on infrastructure, economic development and hopefully avoiding major distractions from moving forward in that regard.”
Suthers said infrastructure improvements have made “an incredible amount of progress.
“A couple years ago, 60 percent of our roads — as a result of inadequate investment in roads during the recession and frankly since 2000 — were in poor condition on an objective basis. … The voters stepped up with [Ballot] Issue 2C and we’ll see about $250 million in the five years to deal with major arterials in Colorado Springs,” he said. “We made a lot of progress last summer and the paving will ramp up here in the next couple of weeks. We hope to do another 250 lane miles this summer.”
Issues such as recreational marijuana sales and the city’s public transportation network were also discussed during a question-and-answer period with the audience.
Suthers said he expects the public transportation network to grow.
“To park downtown, it will cost you about $30 a month. Do you know what it costs to park in downtown Denver for a month? About $300 to $350,” Suthers said. “That’s the incentive to get on a bus. Right now, virtually all our bus usage is by necessity versus choice. About 60 percent of our riders use it to get to work and 40 percent use it to get to school. … As we urbanize and it becomes more costly to drive and park, I think we’ll get more choice riders. But right now our big emphasis is taking care of those necessity riders in terms of frequency. That’s where we’ve spent additional resources over the last couple years.”
And as for recreational marijuana, an audience member asked whether the city planned to capitalize on sales tax revenues made available through the legalization and sale of the product. Neighboring Manitou Springs has two recreational marijuana retailers, but recreational marijuana sales are currently illegal in Colorado Springs under city law.
“So far, the city council had decided not to embrace recreational marijuana,” Suthers said. “We’ll see if this [council] has a different attitude. I am personally opposed to it because of the economic situation in Colorado. I think it’s contrary to the message we want to send in terms of our military-friendly defense community,” he said. “The military definitely does not want a message of a city getting high for fun. … It’s contrary to the branding of Olympic City USA, which is health and fitness, not getting high for fun. We think there are other reasons we should not embrace it. Whether that will change or not we’ll see in the new political environment.”