“When Dan Gallagher took over from Mark Earle [as airport director] he looked through a stack of business cards in Earle’s desk drawer,” said Mayor Steve Bach last week. “One of the cards was from Sierra Nevada Corporation, so Dan called them.”

That was the beginning of a long, complex process that culminated last week with Sierra Nevada’s announcement that a division of the multi-billion-dollar company, Sierra Completions, would be located in Colorado Springs.

Sierra Completions makes custom aircraft interiors for private and government clients, recreating interiors, avionics, security systems and communications to fit client needs. It’s big business — one that will eventually employ 2,100 skilled workers at an $88 million hangar facility to be constructed at the airport.

Why here? Why not Denver, Seattle, Albuquerque or Omaha? How did we finally manage to attract a major manufacturer after so many years of angry stagnation? And who deserves the credit?

In cheerful, upbeat press releases and public statements, the Bach administration, City Council, the County Commission and the Regional Business Alliance praised each other, calling it a collaborative and cooperative effort that involved many local and regional players.

That’s true as far as it goes, but the real story is that of Gallagher’s dogged perseverance and of the administration’s willingness to expend an enormous amount of effort on a long shot.

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Sierra’s interest in Colorado Springs was driven by the airport’s unusual characteristics. COS combines a 13,500-foot runway capable of handling any aircraft, with available sites suitable for large-scale aircraft maintenance facilities. Moreover, the airport is not overburdened with passenger or other commercial traffic, and the city it serves is a pleasant and delightful place.

But that wasn’t enough. Sierra was offering an economic development bonanza that would delight dozens of cities and states. How could our quarrelsome politicos and divided business community put together a winning proposal?

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Mayor Bach will leave his successor a great big present, an economic shot in the arm.

[/pullquote]For starters, the city would have to move forward with the creation of a Commercial Aeronautical Zone at the airport, which would exempt manufacturers in the zone from most city sales, use and property taxes.

First suggested by Bach in 2012, the proposal had languished, but by mid-2014 its passage was crucial. The Mayor/Council wars were in full swing, and business leaders who realized how critical the CAZ might be to the city’s future took the lead, presenting it to Council President Keith King as an independent initiative.

King agreed to sponsor it. The measure passed Council in April 2014 by a 7-2 vote, with Joel Miller and Helen Collins in opposition. In August, the County Commissioners passed a similar measure, followed in December by a decision by the board of the Pikes Peak Rural Transportation Authority to exempt 1,024 acres on the airport’s west side and in its adjacent business park from PPRTA’s 1 percent sales tax.

Meanwhile, the Colorado Office of Economic Development and International Trade approved the airport in September as an Aviation Development Zone where new aerospace/aviation companies can qualify for state income tax credits.

While the CAZ was going forward, the city was scrambling to put together a Foreign Trade Zone at the airport. Such zones, according to the city’s website, offer “duty-free treatment to items that are processed and then re-exported, and duty payment is deferred on items until they are brought out of the FTZ for sale in the U.S. market.”

Such a zone had been created around the airport in 1984, but had rarely been used. After decades of inactivity, the administration had to ensure that the designation(s) were still valid, and that the zone included the area on the west side of the airport that interested Sierra Completions.

As Gallagher and the administration moved quietly to put the deal together, it was crucial to maintain secrecy. Any leak would imperil the project both by putting at risk certain state tax incentives and by poisoning the relationship between Sierra and city government. An RBA official almost let the cat out of the bag, but the damage was contained — and the deal went through.

We learned three things. First, our city, county and state governments can work together harmoniously and efficiently for the public good. Second, Bach will leave his successor a great big present, an economic shot in the arm that may enable him/her to preside over a new era of prosperity.

And third, look through the rest of those business cards that are tucked away in your desk drawer! Thanks, Dan!

4 COMMENTS

  1. Hopefully someone else can answer this question, but I thought the airport already had a Foreign Trade Zone. I thought this was put in place in the late 1980’s.

    I agree with CP above, Dan Gallagher is a keeper. He quietly gets the job done, as opposed to the business alliance which likes to talk about stuff but nothing ever happens.

  2. Chris,
    If you read the article it mentions the Foreign Trade Zone from the 1980’s in paragraph 14.
    Do you see that?

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