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Restaurants, job training and low(er) home prices: A dive into why Colorado Springs’ economy is booming

The city leads the state for employment growth in 2018 and 2019, thanks to diversity in business, age, health care, cybersecurity.

Downtown Colorado Springs on Dec. 12, 2018. (Jesse Paul, The Colorado Sun)
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About five years ago, the CEO of automotive tech firm Altia considered moving the company’s headquarters out of Colorado Springs, where he co-founded the company in 1991.  

Engineering talent — more plentiful in places such as Silicon Valley and, increasingly, Denver — was hard to find in Colorado Springs, recalled CEO Mike Juran, a former software developer at Hewlett-Packard.

Then something changed.

A new mayor and a reinvigorated economic-development effort had something to do with it. The city started growing. But what was happening outside city limits also affected his decision.

“Denver started getting a bit overcrowded and expensive, (so) we felt we’d be losing if we moved,” said Juran, who previously kept his head down to focus on business but now finds himself so upbeat about Colorado Springs, he agreed to join the local chamber’s economic-development board at Mayor John Suthers’ request. “Right now, I’ve become active because I’m trying to build a town that our employees want to stay in and one that my kids want to move back to. They’re in college right now, so I have an ulterior motive.”

A jump in development, new residents and marketing activity — the city had the nation’s fastest growth rate of incoming millennials, according to a Brookings Institution report — is fueling optimism that has the city leading the state in employment growth this year and next, according to the University of Colorado Leeds School of Business economic forecast for 2019. The study predicts Colorado’s growth will start to slow next year, but economists expect “above-average economic growth” for Colorado Springs.

“We really have momentum,” said Tatiana Bailey, director of Colorado Springs Economic Forum, which is part of the business school at CU-Colorado Springs. “A lot of educated people have moved to Colorado Springs, and that has really helped us out. We have the fastest growth rate of millennials, we’re getting more restaurants, the Olympic Museum is going to open up in a year and there’s going to be a downtown stadium. We’ve been in Denver’s shadow, but now we have more activity going on.”

The under-construction U.S. Olympic Museum in downtown Colorado springs on Dec. 12, 2018. (Jesse Paul, The Colorado Sun)

The Leeds report describes the Colorado Springs region as “solidly in the group of cities around the nation that are outperforming the nation.” The city’s population, up 11.3 percent between 2010 to 2017, saw a 21 percent increase in residents aged 20 to 34 years old in that time. Homes are appreciating around 7 to 8 percent, which exceeds other Front Range markets. The city also had the fastest rate of employment growth, up 5 percent, compared to Denver’s 2.8 percent and 2.4 percent for the state overall.

The area is attracting new companies that are contributing to a budding startup community, like FoodMaven, which connects restaurants, hotels and universities to local produce and food.

“Until recently, Colorado Springs has been largely viewed in the shadows of Denver.  But the most useful perspective is the Springs as part of the broader Colorado startup community and Front Range corridor,” said Patrick Bultema, co-founder and CEO of the 3-year-old startup. “I’m pleased to see the Springs coming out of the Denver shadow and establishing itself as a true partner in the startup community, and putting behind some of the negative baggage of the past.”

Bailey credited the rise to an increase in business diversity, as well as the rapid growth of newer industries such as cybersecurity and health care.

In the city, three hospitals are under construction or expanding, along with two new sports stadiums, the U.S. Olympic Museum and several hotels. The National Cybersecurity Center, which Gov. John Hickenlooper kickstarted in 2016, opened in January.

The city also nabbed the state’s first In-N-Out Burger joint — along with a distribution and patty- production facility and offices — as well as a number of northern Colorado imports, including an Oskar Blues Grill & Brew, Denver Biscuit Co. and Atomic Cowboy restaurant, all of which opened downtown recently.

In-N-Out picked the city for its first distribution center in the state because it allows the California burger chain to expand in all directions, said In-N-Out president Lynsi Snyder. The first restaurant, scheduled to open in 2020, will be at InterQuest and Voyager parkways.

“For me, personally, this is a great move, and I’m looking forward to spending more time in Colorado,” Snyder said in an email. “I’ve always loved it there — the beautiful mountains and forests, the change of seasons, the incredible range of outdoor activities, the more relaxed pace and the focus on family. I’ve spent a lot of time there as a visitor because these are all things I value, so I’m excited and happy to now be a real part of the amazing family and business communities of the Centennial State.”

Michelle Ennis leaps from rock to rock while visiting Balanced Rock in Garden of the Gods in this undated photo. The city of Colorado Springs estimates that roughly 2 million people visit the park every year. (Mark Reis, Special to The Colorado Sun)

A growing heart of the city

Jill Gaebler remembers a time around 2010 when the city was taking drastic measures to save money after the recession. Street lights weren’t always on. Trash wasn’t always picked up. Roads weren’t maintained.

She found herself in the middle of a contentious local government after winning a seat on the City Council in 2013. Then-Mayor Steve Bach, who asked Gaebler to run, was the city’s first strong mayor — a description, not a judgment, of how much political power the mayor has in local government. But he and the council found it difficult to work together.

That changed when Suthers became mayor in 2015 and sought to unify the different parts of the city, from reaching out to
Dirk Draper, CEO of the recently renamed Colorado Springs Chamber & EDC, to Susan Edmondson, CEO of the Downtown Partnership, Gaebler said.

“Our previous mayor hired really well,” Gaebler said. “The new  mayor (Suthers) talked about resolving issues between mayor and council and building that relationship by working together. I do think businesses have followed. We’ve tried very hard to be pro-business and have aligned our strategy. When I say our stars aligned, we have a CEO for the Downtown Partnership who is trying to attract talent and young professionals who really want a strong heart of the city, which Denver has.”

Colorado Springs city skyline is shown in this undated photo. (Mark Reis, Special to The Colorado Sun)

An initiative by the Downtown Development Authority is using property tax incentives to help spur construction on new apartments and have 2,000 new residential units downtown by 2025. According to the 2018 State of Downtown report, more than 700 units have open or will start renting by 2021.

Several restaurants have also opened, including one from Longmont brewery Oskar Blues, which opened a Oskar Blues Grill & Brew in the city last year because it liked the new vibe.

“We chose Colorado Springs because of its budding economic growth and the people we know down there,” said Jason Rogers, who is with Oskar Blues Fooderies. “Colorado Springs feels like a Colorado mountain town still. Access to U.S. 24 and quick trips to the hills is something we love. Also, with a more affordable-housing structure, good help is easier to find and sustain.”

Gaebler is pushing for better public transportation, bike lanes and more cultural activities to help attract a younger crowd that will stick around the city for years.

Next up, she said, the City Council is considering Plan COS, a new effort to attract people to downtown by adding mixed-use developments, multimodal public transportation and adding safe bike lanes. There is pushback because changing things up downtown could mean raising taxes or taking away a lane of traffic to repurpose for cyclists.

“I’m definitely a minority on the council, but I feel I speak for the city,” she said. “I’m trying to attract workforce. … Downtown is thriving. People are coming down here. And it’s not Denver.”

The fastest growing workforce in Colorado

With a growing population comes a growing workforce. Colorado Springs had the fastest-growing workforce in the state’s seven metropolitan areas this year, according to the Leeds report. The city’s one-year growth rate was 5 percent, compared with Denver’s 2.8 percent.

But there’s this fact: “We have more job openings than we have people looking for work,” said Traci Marques, CEO and executive director of the Pikes Peak Workforce Center, a federally funded job-training agency.

In 2008, when county’s unemployment rate was at 6.7 percent, there were 10,102 jobs posted in the state job bank for El Paso and Teller counties. This year, with the unemployment rate at 3.6 percent, 61,514 jobs were posted in the two counties.

While the center trains the unemployed and provides them with resources, it has found that it can better assist the unemployed by helping employers, including Amazon, which came calling in August for help in finding 300 workers for a seasonal distribution center.

To help local employers, Marques said it’s about retraining companies to think differently about applicants, or update job descriptions and other hiring practices.

“Employers are having a difficult time finding people. We still have a skill mismatch,” Marques said. “We’re trying to change the mind-set of employers to look at skills or competency, as opposed to a degree, and if they can do the work because they’ve been in the military but don’t have the degree.”

Another group working closely with people leaving the military is the cybersecurity industry, which has found support and growth in the Colorado Springs community. A recent report by the Colorado Springs Chamber & EDC found that the city is home to more than 125 cybersecurity companies and 3,000 workers. When surveyed, the companies said they planned to more than double their hiring in the next few years.

“It represents about 3,000 employees, or 1.5 percent of our workforce, and it represents $1 billion of economic activity for the region,” said Draper, with the Chamber, which employs a full-time staffer dedicated to cybersecurity. Ten years ago, he added, the cybersecurity industry wasn’t “on the map.”

In an undated photo Gunner CPL Justin Williams, right, of Fort Carson’s 4th Brigade Combat Team covers his head as a 120mm mortar is fired during a live fire exercise downrange on Fort Carson. Colorado Springs employers are looking to scoop up those leaving the military, which has an outsized influence in the city.  (Mark Reis, Special to The Colorado Sun)

Vance Brown, interim CEO of the National Cybersecurity Center, said that workforce development is a key pillar. It partnered with Denver-based SecureSet Cybersecurity Academy to help workers gain those skills.  

“Somewhere between 300 to 500 military personal transition out of military service every month here (in Colorado Springs). That’s every month,” said Brown, who also founded Cherwell Software. “And not all have transferable skills. But quite a few have IT and technical backgrounds. A lot can come in and go to a SecureSet, which gives them the necessary training to move from an IT background to cyberspecific.”

Attracting homeowners with low prices

Draper, who became CEO of the Chamber in 2015, said there has been more collaboration between businesses and local government. The city is also growing because of the growth Denver and other northern neighbors have already experienced. When a company does well in Denver, it expands to Colorado Springs, he said.

“Do we compete with Denver? Not very often. The communities are different enough in industry sectors that we find employers are in both markets rather than one or the other. We share employers,” Draper said. “We’ve also seen the northern part of El Paso County grow. Anecdotally, I’ve heard 20 to 30 percent of residences are sold where one of the occupants works in the Denver metro area but lives in El Paso County.”

Lower housing prices have definitely attracted Denver buyers willing to brave the commute, said Donna Major, current chair of Pikes Peak Association of Realtors. On average, homes in the Colorado Springs region cost about a third less than houses in Denver.

In November, the median sales price for a single-family home in El Paso County was $301,500, a 7.2 increase from a year earlier, according to the Colorado Association of Realtors. In Denver, the price was at $465,588, up 7 percent.

A for sale sign sits outside a home in Colorado. While prices have risen in Denver, Colorado Springs has stayed more affordable. That’s attracted buyers to the city. (Jeremy Martinez, Special to The Colorado Sun)

Even condos and townhouses saw prices rise, pushing the El Paso County median sales price in November up 12.9 percent, to $211,675. In Denver County, the price of a condo or townhome in November jumped 18.5 percent, to $385,000.

“We see mostly people from Denver coming down because our prices still seem to be more affordable than Denver,” Major said.

And that has created some growing pains. First-time buyers aren’t finding homes they can afford. That’s also true for existing homeowners, who may be looking to downsize. They don’t want to sell their house unless they can find another one.

Sales started slowing in the summer because of “buyer’s fatigue,” she said. Potential buyers gave up and opted to renew apartment leases. Existing owners are hanging onto their homes longer. Inventory is shrinking. And prices have fallen. But it’s getting more difficult to find a house for less than $300,000.

“We’re not building any attainable housing for first-time buyers,” Majors said. “We have a Children’s Hospital being built and bringing in 800 jobs. We have a lot of great things happening here and bringing in great jobs. Our economy is strong and good. It’s just a struggle for lower-end buyers.”

And that, she added, is pushing buyers into other markets.

“But I do know I have clients who have a hard time finding something in Colorado Springs, so they, in turn, are going to Pueblo,” she said. “It’s moving down the Front Range.”

This story was updated at 9:23 a.m. on Dec. 19, 2018 with additional economic data and comments from FoodMaven’s CEO.  An update at 3:27 p.m. corrected when 2,000 new apartments would be built downtown to the year 2025.

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Coming soon to Colorado Springs

  • The U.S. Olympic Museum: The 1.7-acre site at 200 S. Sierra Madre St. will include a 60,000-square-foot museum. Expected completion in 2019.
  • The Colorado Sports and Event Center will offer indoor and outdoor sports stadiums. The Switchbacks FC soccer team will occupy the 10,000-seat outdoor stadium, while the indoor center will be used by Colorado College hockey players.
  • Three new downtown hotels are underway: 120-room Hyatt Place, 252-room Marriott Springhill Hotel and 167-room Hilton Garden Inn.
  • Three hospitals are under construction or expanding: St. Francis Medical Center, Children’s Hospital Colorado and UCHealth Memorial Hospital North.

Sources: Colorado Springs Downtown, The Gazette, KRDO


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