Colorado Springs City Council president Scott Hente says that when it comes to attracting business to town, incentives are "just one of the tools we have." As he put it Wednesday morning, "We get things moving in a lot of different ways."
But incentives were front and center Tuesday, when Council unanimously approved a $6 million package for a Wal-Mart data center and a $4.4 million package for Agilent Technologies' data and technology centers. Both include city personal property tax exemptions and sales and use tax rebates; the state, El Paso County and Academy School District 20 also are expected to chip in with tax exemptions and rebates.
All of those parties are eyeing an estimated $1 billion in economic impact over 15 years.
Wal-Mart's 163,000-square-foot facility, on 24 acres at 10405 Federal Drive in northeast Colorado Springs, will represent its first corporate investment outside its Arkansas headquarters, says Mike Kazmierski, head of the Colorado Springs Regional Economic Development Corp. The data center, which will expand in five years to 208,000 square feet, will bring 40 permanent jobs paying up to $70,000 annually, and a capital investment of $100 million, along with up to $100 million in acquisition of equipment and machinery. The city will net $12.2 million in tax revenue over 15 years, city staff said Tuesday.
Agilent plans to add a 20,000-square-foot data center and a 35,000-square-foot technology center to its campus on Garden of the Gods Road, spending $121 million over 15 years in construction and equipment. It expects to hire another 131 employees. City staff estimated the city's net take from the Agilent expansion at more than $15 million over 15 years.
Construction on both would begin this summer. No jobs estimate was given for the construction phase.
Very little discussion, and no questions, came from Council prior to the vote. That's because its members have been in the loop for about two months on the Wal-Mart deal, and about a week on the Agilent arrangement, Hente said Wednesday. So sustainability advocate Dave Gardner was left to take on the role of counterpoint.
"If companies like Agilent and Wal-Mart want to be part of this community," he said, "then they should want to contribute fairly to the tax base."
Gardner cited an Upjohn Institute for Employment Research study that showed most new jobs created in a community are filled by outsiders, not existing residents. He also noted that the city won't net what they think, because some of the money will need to be spent providing services to the new businesses and their workers.
But Kazmierski said a different study found that 93 percent of jobs created locally are filled by people who are already here. He then praised local officials for supporting the incentives, saying, "We have government entities that can work together to make things better."
County Commissioner Sallie Clark told Councilors to look at the incentives as an investment. "Eight hundred thousand dollars for $175 million," she said, referring to the county's sales and use tax rebate and Wal-Mart's expected capital spending here. "That's a pretty good return on investment."
Among the few comments from Council was one from Tim Leigh, who said, "This city is now open for business."
Indeed, besides the Agilent and Wal-Mart deals, Fort Carson is getting funding for a new Combat Aviation Brigade, and technology company Entegris, with a 200-person payroll, announced last week it will add 100 jobs here in the next five years.
County commissioners will consider the proposals this week and next, as will District 20.