Beginning with its first issue on April 1, 1989, the Colorado Springs Business Journal often featured bad news. That wasn’t because editor Chuck Shelden was a sour misanthrope looking for tales of woe, but because the city was experiencing a deep and prolonged downturn. In business, politics and citizen engagement, times were tough.
On Feb. 15, 1990, CSBJ reported that El Paso County’s unemployment rate had risen to 6.8 percent in December, after briefly falling to 6.1 percent in July.
“Minor job growth in manufacturing, services and retailing was experienced for the county in July 1989 when employment was up 2.78 percent for 1988,” the newspaper noted. “However, the boost soon deteriorated when plants such as Ampex laid off hundreds of employees. Declines in real estate employment and construction also contributed to the slowed growth.”
In a front-page story, CSBJ took a skeptical look at the city’s claim that job growth in the county had averaged 2.4 percent in 1989, the highest since 3 percent growth in 1986.
Those calculations, touted by Mike Anderson of the city’s Budget and Management Analysis Office, were based on reports by employers.
Yet, as CSBJ emphasized, the December numbers for job losses were based on a household survey.
“According to Nancy McCallin, chief economist for the Colorado Legislative Council,” CSBJ continued, “the household reports tend to respond more quickly to changes in the economy than those submitted by employers. The household survey indicated that employment only grew by 0.3 percent from 1988 to 1989, or an average of about 500. If McCallin’s premise is true, employers will need to revise their estimates of employment down to about 1 percent.”
Other news stories in the issue spoke to the depth and persistence of the local downturn. A three-paragraph brief concerned a Nebraska couple who were considering bidding on “one or more of the failed local thrifts that the Resolution Trust Corp. has recently put on the market.” The canny couple, Donald and Susan Sturm, had already bought and spent $4.6 million to recapitalize Western National Bank in December and had purchased and recapitalized two bankrupt thrifts in Grand Junction.
It wasn’t the Sturms’ first rodeo. They moved to Denver in 1991 and formed the Sturm Financial Group. Western National Bank became American National, and then ANB Bank. Now featuring 31 banking centers and $2.6 billion in assets, ANB is in the top 6 percent of all American banks. It’s safe to say that the Sturms made a wise investment in 1990.
“Their current business interests span a number of sectors: banking operations in three states, investment management, real estate activities including land development, commercial ownerships, leasing, management and oil and gas investments,” according to a brief profile on ANB Bank’s website. “Don is chairman and CEO of Sturm Financial Group and Sue serves as vice-chair and chief financial officer.”
With the benefit of hindsight, it’s clear that the Sturms’ purchase of Western National was the biggest business story of the week, but that honor went to Brandon Birtcher’s plan for Liberty Park, a proposed 240-acre “World Class Destination Resort” to be located in northern Colorado Springs. The design team was to be led by George G. Rester, “the man who was primarily responsible for designing Walt Disney World.” Slated to open in June 1993, Liberty Park “will employ 2,500 direct employees and another 5,600 in secondary jobs.”
Liberty Park wasn’t the only pie-in-the-sky proposal discussed in the Feb. 15 issue. In an indignant editorial, Shelden criticized the USOC for negotiating with the RTC to acquire title to the property on the foreclosed Banning-Lewis Ranch that developer Frank Aries had earmarked for a proposed Olympic Museum and Hall of Fame.
“There is no doubt,” Shelden wrote, “that the 62,500-square-foot Hall of Fame will be truly world class … a new (central) location will result in the Hall being located in Colorado Springs.”
Shelden was right, but his timing was about 30 years off.
The city and the business community nevertheless remained focused on economic development. U.S. Memories, a billion-dollar chipmaker consortium planned to build a vast plant that would compete with Japanese companies for the world market in 4-megabit dynamic random access memory chips. Colorado Springs was one of four finalists for the plant. It seemed too good to be true — a wholly credible joint venture formed in June 1989 by Advanced Micro Devices, Digital Equipment, Hewlett Packard, IBM, Intel, LSI Logic and National Semiconductor.
“Vowing not to get outgunned by the other finalists,” CSBJ reported, “Colorado Springs moved to up their initial ante with future tax abatements, a free land parcel from Ford properties and other financial incentives.”
But then the deal collapsed of its own weight, the consortium disbanded and the plant was never built.
And in what passed for good news, a CBS story on Colorado Springs highlighting foreclosures from the savings and loan crisis was shelved. The story would have focused on the Springs as an overbuilt market driven by reckless developers, with a disproportionate number of foreclosures.
While many high-profile developers and entrepreneurs lost everything during the recession, prudent business people such as David Jenkins and the Case family were happy to acquire RTC properties at bargain basement prices. Judging by multiple CSBJ stories, by mid-1990 much of the business community was convinced that the economy was in recovery.
But as the 1991 council elections would demonstrate, Colorado Springs voters weren’t happy. Douglas Bruce, an anti-tax activist who had moved to Colorado Springs from California in the mid-1980s, had repeatedly called for city council to refer tax limitation to the voters. Council refused, so Bruce petitioned two charter amendments on to the April ballot. One required that a half-cent capital improvements tax that council had instituted in 1985 be phased out in five years, while the other was a tax and revenue measure that required any tax increase to be approved by the voters and limited revenue growth from existing taxes.
Bruce’s campaign was marked by aggressive misstatements and exaggerations that formerly had no place in the city’s decorous nonpartisan elections. He claimed that the city was hiding tens of millions from the taxpayers, while ignoring the fact that those millions were in sequestered Utility bond accounts. His message: The overstaffed city was wasting taxpayer money, city employees were overpaid and city council was asleep at the wheel.
Five incumbents ran for office. Incumbent councilor Mary Ellen McNally ran for mayor against incumbent Bob Isaac, while councilors Wayne Fisher, Frank Parisi and Randy Purvis sought re-election.
During the campaign only Larry Small (who was one of four candidates for McNally’s district seat) appeared to support Bruce’s measures, saying, “I support tax and spending limitations.” The others (six for Mayor, 14 for at-large city council and three for the district seat) took positions ranging from outright opposition (Parisi, Fisher, Isaac) to conceptual support.
Responding to a questionnaire sent to all candidates by Pikes Peak Attractions, Mary Ellen McNally said that she supported putting a tax limitation proposal drafted by Randy Purvis on the ballot, but said, “I have strong reservations about the [Bruce] tax limitation proposals.”
On April 2, 1991, Isaac and Purvis were re-elected, while McNally, Fisher and Parisi were defeated. Larry Small was overwhelmingly elected to McNally’s former seat, while three political novices won at-large seats.
But the real winner was the bombastic Mr. Bruce. His tax and spending limitation measure passed by a 60-40 margin, and its approval jump-started his successful statewide TABOR campaign in 1992. Voters also approved phasing out the capital improvements tax, albeit by a much smaller margin.
Opponents predicted fiscal ruin for the city, as obscure provisions in the measures slowly reduced its tax take. They were right, just as Chuck Shelden was right about the Olympic Museum. The city that was once derided as the “foreclosure capital of America” became famous two decades later as the city that turned off streetlights and stopped watering parks during the Great Recession.
Yet 2009 wasn’t even a blip on the radar screen in 1991. Just as the Sturm, Jenkins and Case families had foreseen, the boom of the 1990s would replace the local recession. Four years later, Mayor Bob and all four council incumbents easily won re-election, and local taxpayers even agreed to grant all nine elected officials an annual stipend of $6,250.
It didn’t seem like much, but it would have paid the rent — at least in December 1989. Griffis-Blessing’s CSBJ advertisement invited readers to live in “turn of the century elegance in many available units at Cascade Park Apartments,” starting at $260.
The bad news: You’d have to pay utilities…