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Flat-lining 

You don't have to read between the lines to see that our economy is in a rut. Just look where the lines are forming and where they're not.

• There's a line for jobs, as unemployment here hit a record-high of 10.7 percent in January, according to the Bureau of Labor Statistics. Translation: 31,000 to 32,000 people are without jobs here.

• But there's no line at the Pikes Peak Regional Building Department, where officials hope to issue 1,600 single-family building permits this year, a quarter of 2005's record-high.

• Lines are deep at the El Paso County Department of Human Services, where the numbers getting food stamps have nearly doubled in three years to almost 61,000.

• But there's no waiting for anyone buying a home. Home sales in January and February totalled only 908, the slowest since 2007, the Pikes Peak Association of Realtors says.

'A very sad trend'

A traditional measure of economic health is sales tax collections. The city forecasts this year's total at $146.8 million, virtually unchanged from last year's amount, and well behind the $153.2 million collected in 2006.

"It's shocking, how far we've dropped and how flat we've been. We're just not recovering," says Mike Kazmierski, CEO of the Greater Colorado Springs Economic Development Corp., and one of the region's biggest cheerleaders. "It's been a very sad trend. It could take another five years where we recover the number of jobs we've lost through this recession."

Though the Pikes Peak region's five military bases help buoy the local economy, Kazmierski says even if Fort Carson gets the Army's new Combat Aviation Brigade, "3,000 jobs in a 250,000-job market won't turn things around."

Nor will they immediately pick up the county's housing market, which has been flooded with 15,600 foreclosures since January 2008. El Paso County Public Trustee Tom Mowle says foreclosures in March are fewer than in past years, but two more batches are expected soon.

The first will come from the final interest-only loans made four or five years ago, when home prices soared. Those loans are due for refinancing, and it's unlikely homeowners will be able to get replacement loans.

"You have to refinance, and the value of the home has gone down, and you haven't paid any principal," Mowle explains. "That is likely to trigger a final wave of defaults caused by lending practices."

The other group comes from foreclosures held back for greater scrutiny after last year's controversy regarding banks' failure to complete some documents properly.

"A scary number is sitting at law firms, waiting to be sent out," Mowle says, adding he's heard that 1,500 foreclosures are waiting at one Colorado law firm alone. There's no way to know how many will be filed in the county when they're released in a month or two, he says.

"We're calling this a recovery, but unemployment is up in El Paso County whereas it's down nationwide," Mowle says. "You can't have a recovery from a foreclosure standpoint until people have jobs."

Kazmierski says reducing the inventory of existing homes could take up to five years. And Bob Croft of the Pikes Peak Regional Building Department says the era of speculative home-building has evaporated.

Last year the department predicted it would issue 1,450 single-family permits and wound up issuing 1,630. This year, the department is cautiously optimistic in projecting 1,600. As of Monday, only 255 permits had gone out the door.

Be your own boss

Kazmierski says that, unfortunately, there's no Intel waiting in the wings to hire 1,000 people. The new reality, he says, is that the Springs needs to attract a lot of small companies or build existing companies, adding 10 jobs here and 15 jobs there.

That 1,400 jobs were announced here in 2010, he says, was far better per capita than in places like Albuquerque and Austin. But it's still a small number, and companies have gotten used to relying on fewer employees. "If somebody is waiting for a job to come back," he says, "it's going to be a really long wait."

Those without jobs should retool their skills in technology or health care, Kazmierski says. Or, go to work for themselves.

"Talented people who lose their jobs can either go to work at Wal-Mart, or they can start their own company," he says. Or buy into an existing one, if they can swing it."

One such example involves former Greater Colorado Springs Chamber of Commerce executive Will Temby, former Colorado Springs Business Journal publisher Lon Matejczyk and Larry Hannappel, a former executive with Century Casinos, Inc. Last year, they bought Apprentice Personnel in January. With offices here and in Kansas, the company serves 12,000 temporary workers.

"You can get pretty good deals in this climate," Matejczyk says. "We would have had to pay twice as much for this company if we had bought it three years ago."

zubeck@csindy.com

  • Contrary to hopes, local economic indicators point more toward a tortoise-speed recovery.

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