Transwest, a Commerce City-based big rig sales and service company, plans to open a $4 million, 39,000-square-foot dealership in Fountain this November.
City leaders hope that will get Fountain’s economic wheels rolling again — but more importantly, growth in the trucking industry is a good signal that the economy is recovering.
Transwest bought the property near Interstate 25 and Exit 128 in 2005, but delayed building a new dealership because demand for trucks, buses and other commercial vehicles plummeted shortly after.
Transwest Chief Financial Officer Mark Stenseth said sales dropped 30 to 40 percent by 2008. But sales are coming back.
“2010 has been a rebound year for us,” he said. “Freight tonnage nationwide has steadily increased over the past few months and sales of trailers rose 165 percent over last year.”
According to WardsAuto.com, which tracks the trucking industry, national sales of heavy-duty trucks rose for the sixth straight month in June, and sales jumped 11 percent compared to the same time last year. Sales are also up 13 percent for the year.
Transit activity is up, too.
U.S. truck tonnage jumped 7.5 percent in March year-over-year, the highest monthly hike in more than five years and the fourth consecutive year-over-year increase, according to the American Trucking Association.
Numbers like that are important to note, Stenseth said, because the transportation industry is a leading economic indicator.
UC Colorado Springs economist Fred Crowley agrees.
“When the economy recovers, stores start ordering more and transportation picks up,” he said. “There is a strong bit of evidence that vehicle miles are increasing, which tends to support an expanding Gross Domestic Product.”
That’s all good news to Stenseth and Fountains economic developers.
“People say our industry numbers deteriorate before the general economy dips into a recession, but they also recover faster than the rest of the economy,” Stenseth said. “With the rise in (heavy-duty commercial) truck orders and freight tonnage, it’s encouraging not only for our industry, but for the economy as a whole.”
Fountain’s city leaders leaped at the opportunity about five years ago to attract Transwest and the 45 high-paying jobs that will come with completion of its six-acre, eight-bay service center, parts department and sales offices.
Fountain Economic Development Director Lisa Cochrun said the city formed a “quick response team” to make the transition as painless as possible for Transwest.
“Our city planning department expedited the arrival of Transwest to help them get through all the processes as fast as possible, like coordinating with external agencies like regional building and sanitation districts. We want those jobs as soon as we can get them. All hands are on deck,” she said.
The area where Transwest will build is in an urban renewal zone, and the city offered the company a 50-percent rebate on city sales and use tax for five years.
Though sales taxes on vehicles are paid in the county the vehicle is registered in, Fountain will still see revenue from the tax on sales of parts and service.
Transwest said it chose to set up shop in Fountain for several reasons: its location and access to I-25, its desire to serve the south and eastern parts of the state, such as Pueblo, Canon City and Trinidad and its vicinity to Fort Carson.
Its customers include distribution companies, contractors, construction related businesses, freight haulers and school districts.
Transwest will move its Colorado Springs parts store to the new dealership once it’s complete, and once that transition happens, Stenseth estimates the new dealership will generate $1.2 million in annual payroll.
Crowley said the city’s efforts to attract the business could go a long way toward creating more economic activity in the area.
“It will be interesting to see what pops up around that new business,” he said.
Fountain-based T-bone Construction has already broken ground on the facility.