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Oppressive government regulations are a very common complaint of Chamber members. I hear it with numbing regularity. In the name of safety or fairness government passes laws and regulations that place enormous burdens on businesses. The business costs of compliance have an aggregate cost to the national economy. On his blog, "Economics One," economist John B. Taylor recently wrote "While correlation does not prove causation, regulations, whatever their benefits, tend to raise the cost of doing business and thus discourage business expansion and economic growth." Taylor contrasts the economic policies enacted during the recessions of 1981-82 and 2007-09. During the former, the number of federal regulators declinesd while the number of regulators has grown dramatically during the latter. The results can be seen with a robust 5.7 percent recovery from the 1980s recession compared to a very anemic 2.2 percent recovery now. Taylor’s blog post is short and you can find it here.

When mid- to large-sized companies are looking to expand, they contract with professionals known as site locators who help them identify communities and sites suitable to meet the companies’ needs. It’s a sophisticated and number-driven process, but it’s also about relationships.

To foster more awareness of the Denver Metro area and strengthen relationships, the Denver Metro Economic Development Corporation annually hosts a group of site location professionals. They tour the region, meet civic and business leaders and are briefed on the economic prospects of the Denver area and Colorado. The culminating event is a breakfast at which the site locators shared some of their thoughts. The Northern Colorado Economic Development Corporation was a host of the Metro Denver Site Selection Conference this year, and I was a guest at their table for the breakfast. Eight site locators participated.

Among the trends and observations they shared:

• Less expansion and more consolidation. Companies are looking at their entire facility platform and rationalizing what they have. this is being done in the context of their entire operating footprint. That means that each location is being looked at in the context of the whole.
• There is no such thing as a ‘top 3 communities’ list for companies. It depends on the industry and is very company specific.
• Ten years ago companies shifted into smaller sized communities, but the trend is the now back to bigger cities due to the size of the available labor market.
• Globalization continues to be a big trend. American towns and cities are competing worldwide for capital investment and workforce requirements are much more sophisticated.
• For many companies, the cost of power is very important.
• In most cases community incentives are not THE deciding factor for where companies locate but they matter at the final point of decision. Access to an airport, community reputation, the quality of the workforce and a pipeline for the future workforce tend to matter more. Also important are tax burden and the ability of a company to get a facility up and running quickly. However, incentives have a big psychological impact. They are a signal of community support and intent.
• Many communities have established ‘deal closing funds.’ This is cash used to sweeten the deal. Some small Texas communities have as much as $20 million set aside in such funds. The incentives are performance based and have ‘claw back’ provisions if a company does not meet its end of the arrangement.

As Fort Collins is working with several existing companies that are looking to expand or consolidate, there are some salient points here to keep in mind.

According to research done by Tim Kane of the Hudson Institute, entrepreneurship in America is in decline.

Among some of his findings:

•  "The number of new establishments a year peaked in 2006 with 667,000.
• That number dropped to 505,000 in 2010.
• The number of jobs created by establishments less than one year old has decreased from 4.1 million in 1994 to 2.5 million in 2010.
• Between the 1980s and 1990s, there were 11 startup jobs per 1,000 people.
• The average rate for entrepreneurial job creation under the last three presidents was 11.3, 11.2, and 10.8, respectively.
• However, during the past four years the average rate dropped to 7.8.

Kane offers several possible explanations:

• An unfavorable climate for entrepreneurship exists due to high taxes and uncertainty.
• The passage of the Affordable Care Act creates a complex and uncertain regulatory environment for employers.
• The IRS crackdown on employers’ use of independent contractors is forcing startups to pay for benefits they can’t afford.
• The increase in mandated occupational licensing by local governments is hurting opportunities for poor and middle class Americans that want to create startups.

You can find his report here.

Until recently, the Sierra Club was in favor of hydraulic fracturing ("fracking") because natural gas reduces carbon emissions. Then it realized that fracking was actually working, and it undermined their agenda of promoting ‘renewable energy’ such as wind, solar and biofuels.

No wonder they’re alarmed. If the goal is to promote specific technologies instead of actually improving air quality and reducing carbon emissions, the success of fracking must be an unwelcome development.

Not long ago only 20 percent of America’s energy came from natural gas. Most came from coal. Now natural gas and coal each provide about 32 percent of the fuel for power generation. Because natural gas produces 45 percent less carbon than coal, America’s CO2 emissions are the lowest in 20 years.

Natural gas is a great bridge fuel as we transition from traditional fossil fuels to clean and renewable energy. The greater Fort Collins area is a center of research and development for clean and renewable energy technologies. But unless an unexpected technological break-through occurs, that transition will take decades. In the meantime, it happens that Northern Colorado is a major source of natural gas because of the Niobrara shale rock formation.

My point? As you read stories and hear alarming testimony from community activists and environmentalists about fracking think critically about what they are saying and what the real agenda might be. Is it really about protecting the public and environment or are there other agendas at play?

For more, there’s a great article by Bjørn Lomborg titled " A Fracking Good Story " at Project Syndicate.

Is hydraulic fracturing ("fracking") safe? Will Northern Colorado run out of water in the next 20 years? Will Colorado have the money to properly educate tomorrow’s workers?

These questions and others will be answered at the Northern Colorado Regional Issues Summit next Wednesday morning September 26.

Each issue in turn is important to the economy and livability of the region. For example, fracking has become an issue recently due to its use to extract oil and natural gas from the Niobrara shale rock formation that covers parts of northeast Colorado, northwest Kansas, southwest Nebraska and southeast Wyoming. The process to access the deposits is hydraulic fracturing or commonly called fracking. How does it work? What safeguards are in place? Why do some environmental groups oppose it while people like Governor Hickenlooper – a trained geologist – support it? Find out on the 26th.

Water wars are a part of Western lore. It’s just that guns have been replaced with laws, lawyers and activists. But the numbers don’t lie: Northern Colorado doesn’t have enough water to meet demand over the next 20 years. Some claim that there is plenty of water, if we just conserve more. Experienced water managers emphatically say otherwise. Where will our water come from if projects like the expansion of the Halligan Reservoir and the construction of Glade Reservoir are blocked by no-growth activists? Find out on the 26th.

Colorado is a net importer of talent from around the country, even the globe. That’s a good thing because due to constraints voters have built into the state constitution, it is increasingly difficult to affordably educate our own residents. Post-secondary education, in particular, has seen ever diminished financial support from state government. The irony is that so-called public universities and colleges will reach the point where they no longer receive tax support from Colorado taxpayers. How do they remain financially sustainable? Does it even matter? (Hint: it does). Find out on the 26th.

The Regional Issues Summit will be held on the morning of September 26, 7:30 – 11:00 AM at the Embassy Suites in Loveland. It is being held in conjunction with the Northern Colorado Business Report’s Bixpo. Hosts of the Summit include the Northern Colorado Legislative Alliance (the Fort Collins, Greeley and Loveland Chambers of Commerce and the Northern Colorado Economic Development Corporation) and Leadership Northern Colorado.

To find out more and register for the Northern Colorado Regional Issues Summit, go here.

With a neighborhood meeting on August 20 to discuss the development of the Link N Greens property on the northwest corner of Mulberry and Lemay, it became public that Woodward (www.woodward.com) would like to site their corporate headquarters there.

This is a great and rare opportunity for Fort Collins. Nationally, very few of these kinds of corporate decisions are made on an annual basis. It is not a stretch to say that for a community of the size of Fort Collins these opportunities come along about once in a generation. (Think Woodward 1950s, HP 1970s, Anheuser Busch 1980s)

From what I understand, the company is looking to make a decision this fall and there is at least one other very viable non-Fort Collins site under consideration.

The formal process of rezoning the land begins with a special hearing of the City Planning & Zoning Board on Thursday evening September 13. The meeting will be in the Council Chambers at City Hall, 300 LaPorte Avenue beginning at 6:00 PM.

If you want to show your support for retaining Woodward in Fort Collins, this would be a great time to do so. Simply show up and make a few comments in support of the project. You don’t need to make a long speech; 15-45 seconds would suffice.

Questions? Feel free to give me a call at 970 482-3751 x 102 or Ann Hutchison at extension 107.