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 next Wednesday.
Author: Rob Larimer