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News & Press: Colorado Technology Industry

OEDIT pushing harder to attract companies to Colorado

Friday, March 29, 2013   (0 Comments)
Posted by: Selina Sandoval
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OEDIT pushing harder to attract companies to Colorado

A dramatic shift is going on at the Colorado Office of Economic Development and International Trade (OEDIT): the eco-devo agency is aggressively pursuing companies to expand or relocate into Colorado rather than waiting for the companies to seek help from the state.

This increased aggressiveness originated with "The Blueprint,” the statewide economic-development plan that Gov. John Hickenlooper and Ken Lund, OEDIT executive director, released in August 2011. It emphasized that the state must work closer with business and local eco-devo organizations to respond to company needs.

Lund and Hickenlooper realized that while states such as Texas and Utah throw more money and incentives at potentially relocating companies, Colorado can become more aggressive and more efficient with its incentives to compete for precious jobs.

Business-development teams from OEDIT now identify companies that have a presence in Colorado, and ask them how easy or difficult it is to do business in this state and how it can serve the companies’ future needs.

Also, every two weeks, select members of Gov. John Hickenlooper’s Cabinet meet to talk solely about economic development and to coordinate strategies across departments. And some leaders of other departments join OEDIT on economic-development missions to other parts of the country.

The result: Hickenlooper and Lund have announced a number of companies that have committed to expanding in the state in the past six months — including Visa Inc., Redwood Trust Inc. and On Deck Capital Inc.

And the new strategy could mean there are more on the way.

Jeff Kraft is director of the office’s business funding and incentives division. He predicted, during a recent Colorado Economic Development Commission (EDC) meeting, that a trip OEDIT officials made with Hickenlooper to Canada planned March 26-29 and an upcoming visit to Seattle could lead to the state committing another $3.2 million in job-creation incentives to expanding companies.

"Our view is [to offer] modest incentives with better execution than any other state in the country,” Lund said. "The point is simply that we are trying to build a team that can out-execute other states. We pride ourselves on moving at the speed of business.”

In 2011, OEDIT began redeveloping its website (advancecolorado.com), reconfigured its social-media strategies and built a team to chase deals, Lund said.

Late that year, Lund also started meeting every other week with about a dozen leaders from state departments such as transportation, labor and employment, revenue and regulatory affairs to determine how they could work together to quickly send information about Colorado to any company considering growing in the state. Hickenlooper comes to every other meeting.

Two weeks ago, attendees each identified a single point of contact in their agencies to answer questions from any prospect looking at Colorado.

OEDIT team members work with CEOs throughout Colorado and ask them to identify companies in their supply chains that seek to expand, said Michelle Hadwiger, a business-development manager who will become the office’s business-development director on April 1. State officials will travel out of state to visit with those companies, and will ask how Colorado can improve its business atmosphere and help them to grow in this state, she said.

On the April trip to Seattle, for example, officials from OEDIT and the state’s Office of Information Technology (OIT) will meet with IT companies, site selectors and real estate developers, Hadwiger said. She couldn’t name a company that such efforts have drawn to Colorado, but said she expects the results to be more obvious in the coming years.

OIT, in particular, has been key to the cross-departmental economic-development efforts. Director Kristin Russell, a former vice president of Oracle Corp., has been able to join in Silicon Valley trips and explain how private companies can work with the state to grow, several people said.

Monica Coughlin is OIT’s IT economic development and broadband strategy director, also coming from Oracle to the state two years ago. She said when On Deck Capital was considering expanding in Colorado, she and Russell helped to connect company officials with local tech resources such as the Colorado Technology Association (CTA).

Steve Foster, a CTA board member who has worked with OEDIT for a long time, said state officials have gotten "extremely aggressive” in recent years. He said that’s attracted company expansions and caused venture-capital firms to notice the state and fund the growth of local companies.

"Colorado had a PR problem. We had a lot of great things going on but the rest of the world didn’t know about it,” Foster said. "Now there are well-organized activities to get that word out.”

All of this has happened while public focus has been on some more visible changes to OEDIT, such as the addition of the state’s first chief marketing officer last year and the launching of the controversial Regional Tourism Act, which allows major tourism projects to apply to keep most of the state sales-tax revenues they generate.

But the end product of these aggressive recruiting efforts — the commitment of state tax funds for job-creation incentives — has caught the attention of legislators.

The EDC has agreed since 2009 to spend as much as $68 million on job-specific tax breaks and pledged another $14.6 million on more general strategic-fund incentives, given only after promised jobs are created. This year, Lund asked the Legislature’s Joint Budget Committee (JBC) for an annual $5 million allocation for the strategic fund — a five-fold increase from two years ago. The JBC allocated $4.9 million in the budget that was introduced on March 25.

"I think that’s important from a strategic perspective,” Lund said. "That gives us tools to be more competitive.”

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