Energy boom gone bust overshadows efforts to restart Denver economy
Still rising grandly in front of the majestic Rocky Mountains, downtown Denver gleams a little less brightly these days. With the energy boom a memory, the city finds itself overbuilt. Prime office space goes begging. ``Things,'' as one local economist put it, ``have certainly slowed down here.''
But if the Mile-High City has been cut down to size of late, it has not given up on growth.
Denver voters will turn out for a special election today to decide whether to build a new $137 million convention center. Although the city is struggling with the nation's third-highest office vacancy rate, even opponents of this particular plan say the city needs a bigger convention center. The debate, says an opponent, City Councilwoman Cathy Reynolds, is where to put it.
``We're not seeing the numbers of new jobs [created],'' says Bill Kendall, chief economist for the Center for Research and Economic Forecasting. ``On the other hand, you'd be hard pressed to call Denver's economy depressed.
``It's almost a matter of saying the glass is half-empty or half-full.''
Much of the decline has come since the end of the energy boom. Now, energy and mining companies, which created one-quarter of the new jobs in the '70s, are depressed. Agriculture and some electronics firms have been hurt. Denver was also pinched by the nation's deep recession in the early '80s.
``Colorado has been slow bouncing back from this recession,'' says Tucker Adams, an economist with United Banks of Colorado, the largest bank holding company in the state. ``And that's not the usual pattern.''
Despite this, some of Denver's shine remains.
``I think it's still an economy that's growing,'' Ms. Adams says. Job growth, which raced along at a 5.4 percent annual clip during the '70s, will still post a respectable 3.7 percent this year and 3.3 percent next year, she estimates. These rates are close to the pattern set before the '70s boom.
And, like a good portion of the nation, Denver's current growth is coming from service and defense companies, such as Martin Marietta Corporation. The city also has been helped because of its position as financial, transportation, and tourist center of the Rocky Mountain region, Professor Kendall says.
``Being two hours from three-quarters of the US, Denver came out a winner,'' says Jim Hertzel, market support director for Data General's Technical Products Division.
After exploring a variety of cities, including Atlanta, Dallas, Los Angeles, and Portland, Ore., the Boston-based division moved to Denver -- partly because of location, Mr. Hertzel says. The decision also rested with the city's good work force and its ability to attract recruits from other parts of the country.
Tourism, meanwhile, remains a big industry in Colorado. It has helped Denver, pumping in $1.5 billion annually into the economy. ``We know it's growing,'' says Roger Smith, president of the Denver and Colorado Convention and Visitors Bureau.
To serve the region's growing business and vacation needs, the city plans in the short-term to expand Stapleton International Airport. More than $100 million has been slated for improvements and terminal additions.
In the 1990s, though, the city is planning to replace Stapleton with a new airport, designed to handle three times the number of passengers.
Three major airlines use Stapleton as a hub already. And ``American Airlines wants to come in with a major hub,'' says Dolores Wilson, manager for new business and industry at the Denver Chamber of Commerce. ``There isn't room.''
For the future, economists are optimistic. Denver, which accounts for the lion's share of the state's business activity, isn't having to make the transition away from manufacturing as other areas are, Ms. Adams says. ``Colorado is what many other states in the nation are becoming.''