Angelou Economics study: great views but future looks bleak

Angelou Economics’ market assessment of the Pikes Peak region says that Colorado Springs is a beautiful place to live, but it paints a less than pretty picture overall.

The region scores high on many “quality of life” issues such as natural beauty, recreational opportunities and climate.

The study also gives the region high marks for a “highly educated work force” and a relatively strong K-12 educational system, but notes that there is “uneven performance among school districts” and “the percentage of the population made of young professionals (25-44) is declining.”

While the aging of the regional population mirrors national trends, the Colorado Springs MSA has experienced an exceptional percentage decline in young professionals when compared to peer cities.

During 2000, the Springs had the second highest percentage of young professionals among seven selected MSAs at 32.4 percent, trailing only Austin’s 35.19 percent. Seven years later, having dropped more than 15 percent, the Springs had the second lowest percentage, 27.7.

The business climate is marred, according to Angelou, by two factors. The Springs has “very competitive” lease rates, but its commercial real estate inventory is aging, “with most activity around remodeling and retrofitting rather than new construction.”

More importantly, “Tax structure has weakened the state’s and region’s ability to attract or encourage growth through abatements, incentives, or infrastructure investments. This, combined with limited modern real estate options creates major challenges in presenting the region and state as a business-friendly environment.”

The region also lags peer cities in other indices.

During 2006, only two local institutions (the University of Colorado at Colorado Springs and the Air Force Academy) reported spending $15 million of local, state or federal research money.

That figure is dwarfed by Albuquerque’s $182.6 million, by Fort Collins’ $256 million and by Austin’s $438 million. Among peer cities, only Boise, at $7.8 million, reported spending less.
Venture capital investment in the region also is substantially lower.

According to the report, during 2007, the Springs attracted less than $300,000 in V.C. money, compared with $650 million for Austin, $230 million for Portland, $80 million for Fort Collins, and $100 million for Albuquerque.

Local V.C. investment increased to $7.4 million during 2008, which Angelou called “especially positive in light of national V.C. funding stagnating over the same period.”

After 30 pages of often-dismal statistics, Angelou offered a report about strengths, weaknesses, opportunities and threats in the community.

Strengths include a “high quality of life, superior location and climate, military presence, the presence of the USOC (U.S. Olympic Committee) and other NGBs (national governing bodies), a highly educated work force, and close proximity to Denver.”

Weaknesses include a “lack of diversity, perception of public and private leadership challenges, limited number of direct flights to Colorado Springs, and limited collaboration and engagement (between different segments of the community).”

Opportunities include “UCCS-Colorado Springs collaboration, Intel site re-use, downtown revitalization, capitalize on USOC, creation of a common vision, create a recognizable brand and creation of a collaborative support structure for economic development.”

Many of the threats arise from the strictures imposed by the Taxpayer’s Bill of Rights, which has a “significant impact on the city, county, and State of Colorado’s ability to support local programs.”

With “limited incentives for new and existing businesses,” the region is at the mercy of its competitors.

“Civic and economic development leaders are using tax incentives and other inducements to an ever greater extent,” the report states. And while the region’s underlying characteristics might appeal to company decision makers, “the competitiveness of an incentive package will often be the decisive factor.”

The assessment is the first of three reports from Angelou. The second, a Target Industry Report, will prioritize “industry clusters” that should be the focus of the region’s economic development activities.

The third, the economic development strategic plan, will provide a “roadmap for the region’s economic development activities over the next 5 to 10 years.”
For now, Angelou has three broad recommendations.

  • Build the Pikes Peak region’s position as a “globally competitive region.”
  • Give attention and money to innovative economic opportunities “beyond the scope of the traditional economy.”
  • Focus on recruiting and training a young, talented work force.

The report will be formally released during an Economic Development Corp. press conference on April 14.

  • Green Flash

    Passing 1A would have helped with the financial side of our shortcoming. But what I’ve heard on the street is that the core of our problem is a general distrust of local governement’s ability to manage an economic fund. Until we solve this crisis of confidence, we will remain at a competitive disadvantage… no matter how great our quality of life may be.

  • Heidi

    Well said Green Flash. Looks like COlorado Springs glory days of winning Top City for Living, dogs lovers, beer drinkers, healthest, etc are coming to end.

  • John Whitten

    Greenflash is right…..and distrust isn’t a strong enough word.

    But even if we trusted city management, who would ultimately get the funds.?….EDC? The Chamber?..or some expanded bureaucratic department in the city? Probably some new superagency with an out of work developer as the Executive Director………….

    One could argue,with some credibility I think, that the tax disbursements to the EDC, or the Chamber, or any other City Bureaucracy or other agency, would have been nothing more than a meal ticket to stay in business.

    And asking the general public to pay more taxes gets even harder to justify when the EDC spends significant money on ‘studies’, like the one above, that tell us what, exactly?

    Example: We need to give ‘attention and money to innovative economic opportunties beyond the scope of the traditional economy’. Oh Yea? Just what does that mean? I’m sure the key word in that recommendation is; ‘Money’, as in: spend some more with us and we’ll tell you……….but it sounds like a bunch of buzz words, invented by some slick feasability study types, to impress the people signing their checks……and to get those folks to spend more money on more studies.

    Example 1(a): Is there anywhere in this the country that doesn’t want to be a ‘globally competitive region’? This is some kind of revelation? You can believe even Pumpkin Junction ,North Dakota wants to be globally competitive……..

    Example 1(a)(1) ‘Focus on a young and talented workforce’. Kind of sounds like recruiting tool for the hotels in Las Vegas……whats wrong with an older, much more talented and experienced workforce? Again, who in this country doesn’t want a talented workforce?

    And what’s wrong with trying to save the experienced work force we have now? There must be something wrong with it….we should ask HP and the 200 families they moved out of here after the USOC deal was announced. I’ll bet HP didn’t need a study to tell THEM what was wrong around here……

    If EDC paid for this kind of incomprehensible, buzz phrase laden, headache inducing, printed horsehockey then they should just give the study to the local print media, and save the ‘lunch’ money…. I sure wouldn’t be bragging about it, especially in front of folks who have just eaten………………..

    One can’t help but remember the definition of a consultant: An out of work expert, with an empty briefcase, who’ll charge to tell you what you already know……

  • Dave Gardner

    When you hire a site consultant to do the study, what do you expect? I keep hoping, but so far the focus appears to be on attracting business from elsewhere. Where is the leakage study? Where is the look at opportunities for local businesses to better meet each others’ needs?

    The fact that we have empty commercial space and we’re not building new space is a negative? For who, the construction companies? I’m guessing most businesses today would welcome less expensive, existing space.

    This appears to be totally focused on last century’s growth-centric economic development paradigm. I’d love to see more innovative, modern thinking that looks at ways to make what we have more efficient. I don’t think the future lies in the zero-sum game of competing with other cities to import our prosperity. But that’s just me. This study probably exactly meets the needs of most EDC investors (other than the public).