For the first time in decades, the City of Colorado Springs will enter the new year without a dedicated economic development team.
The team had played an important role in helping the privately funded Colorado Springs Regional Economic Development Corp. in attracting new companies and retaining existing businesses, a mission that became increasingly urgent in the down economy.
But budget cuts forced the city to do away with the team and its functions have now been relegated to the city’s Budget Division. That unit focuses primarily on preparing the city’s budget and is too thinly staffed to fill the gaps left by the economic development team.
“We went from a decent-sized (economic development) division with six individuals down to basically one,” said city Budget Manager Lisa Bigelow. “I assist the best I can, but working the budget is a full-time job.”
Bob Cope, a senior financial analyst for the city, is the one person left on the job. But he also works on the budget and manages the city’s Retail Enhancement Program.
In justifying the team in the 2010 budget, city officials noted having an integrated team of business development, housing, comprehensive planning and real estate experts in the Economic Development Department “maximizes resources and increases efficiency to achieve City Council’s Strategic Plan goal of economic vitality.”
The charter for the Economic Development Department has been lifted almost verbatim from the 2010 budget and stuffed into the charter for the Budget Division in 2011. Bigelow said her division has been successful in picking up some of the department’s responsibilities, but that a lot of what it did has completely vanished from the city’s repertoire.
“(Former Economic Development Director) Elena Nunez engaged with every single (corporate relocation) prospect in town and attended every meeting. There was a dedicated manager there all the time,” she said. “She was also a representative for the Convention and Visitors Bureau, but based on my schedule, I can’t attend all of those things. We get calls and there’s probably a delay in responding that wouldn’t be there if we had a dedicated staff.”
Bigelow said her team now concentrates more on the administrative side of economic development for projects like Copper Ridge and the South Academy Boulevard revitalization. She also attends EDC and Chamber of Commerce meetings, and is active in Operation 6035, the effort aimed at re-energizing the local economy.
The EDC, she said, has picked up some of the slack but not entirely.
“We contract with them for business retention, but they’re still primarily doing deals with prospects, not picking up the city’s other duties,” Bigelow said. “We’re just not doing a lot of what we used to do. We had to pick up what another department was doing, but we can’t pick up everything.”
There are some areas where the EDC has filled in.
“The EDC now has the lead on primary job-retention, a task that was done mostly by the city in the past,” said EDC President Mike Kazmierski.
Having the EDC as a backstop might have played a role in the decision to eliminate the city’s Economic Development Department.
“No doubt the fact that the EDC existed made the reduction of the economic development team at the city easier when they had to decide between economic development and public safety,” Kazmierski said.
Kevin Bommer, the legislative advocacy manager for the Colorado Municipal League, said this kind of cost-cutting is not unique to Colorado Springs, as cities have had to find new ways to achieve old initiatives in a rocky economic environment.
“Fiscal realities being what they are, this is just another example of creative staffing,” he said. “Long-term you would want a full-time director in that position to maximize economic development efforts. But Colorado Springs has had to deal with some severe economic conditions and the council has had to make some difficult decisions because of that.
“I’m sure everyone is hopeful that economic conditions improve so that it’s not permanent, but right now everything has to be on the table when it comes to balancing the budget.”
One developing trend among cities is to merge economic development councils and corporations with the municipal chamber of commerce. Manitou Springs is working on such a consolidation, and discussions between the EDC and Chamber of Commerce have occasionally materialized since the two split in 1991.
But Kazmierski said discussions between the two have not been held for years, and nothing is in the works. “The boards decided after much research that the two organizations were very different with little overlap,” he said.
Mayoral candidate and former councilman Richard Skorman likes the idea of a combined entity. “I think it would be a real benefit to have the two of them together,” he said. “It makes sense to have them under one roof.”
Whether that shakes out, Bigelow is in favor of reinstating the Economic Development Department, and the general consensus among city officials and business people interviewed this week is that a strong economic development team is vital to the city’s growth.
“The city needs to work with the EDC to facilitate the fast-tracking of new companies coming in,” Skorman said. “I would push to grow our own (economic development department) that applies the same principles (as the EDC). If I get elected, that’s something I want to promote. Having your own economic development department that works with the EDC enables you to work with all the different business groups more efficiently.”
“Most cities have a dedicated, and in some cases robust, economic development team with resources to grow their economy through the use of taxpayer funds,” he said. “Nothing impacts a city’s revenues more than job creation and retention, but many in our community don’t seem to look favorably on the use of taxpayer funds for economic development.”
Councilman Tom Gallagher said that in the interim, the city will continue to work “very collaboratively” with the EDC.
Kazmierski said greater coordination makes sense.
“(Chamber of Commerce President) Dave Csintyan and I have put considerable effort toward that goal and we coordinate on everything now,” Kazmierski said. “The relationship between the two organizations has not been better in my opinion.”
National League of Cities Director for Economic Development Christiana McFarland said it would be in the city’s best interests to re-establish the team.
“Larger cities have their own economic development divisions because it’s such a large part of what the local government is involved in. Smaller communities don’t always have that option,” she said.
Whether the Springs falls under the category of “larger city” or “smaller community” will be up to the next city council and mayor.
Where mayoral candidates stand on a city-led economic development team:
Steve Bach — Believes public safety is the first job of the local government, but getting the economy going is a close second. Said if it’s economically feasible, growing the city’s economic development team is a discussion that can be expedited and a process that can be implemented swiftly.
Brian Bahr — Said priorities are public safety, followed by maintaining and improving infrastructure like roads, bridges, parks and medians. Until those services are restored, everything else is up for grabs.
Buddy Gilmore — Said the importance of a dedicated economic development team is undeniable, but the city council has had to make some difficult allocation decisions and restoring protective services has had to take priority over economic development. If the city’s 2011 revenues make it feasible, Gilmore would keep this on the front-burner.
Dave Munger — Believes the primary charge for the new mayor will be to create new jobs, and having a dedicated economic development team within the city is the key to that. Munger would make the development of an economic development team a top priority.
Richard Skorman — Favors the establishment of full-blown economic development team to work with the EDC.