Fort Collins’s top private sector employer, Woodward, is on the City Council agenda this week. After months of negotiations between Woodward and city government, a proposal is on the table said to be worth $23 million. It will be used to secure the company’s proposed corporate headquarters on the Link-N-Greens property at the northwest corner of Mulberry and Lemay.
This is good news for the community, assuming the City Council adopts the proposal and the company decides to actually move ahead. Council action is scheduled for tonight (Tuesday evening March 26) with Second Reading set for April 2.
Unfortunately, the so-called ‘business assistance plan’ (Shouldn’t it actually be called a ‘community economic investment plan?’) has been characterized in the press as an incentive. I want to take a moment to correct that.
Incentives are a common job-creating practice and can include cash, free land, free utility installation and hook-ups, training incentives, tax abatement, infrastructure improvements and an expedited development review process to name some of the more common incentives. While some places are so bad they are forced to pay copious amounts of incentive money to keep or lure companies that is not the case here.
In contrast to most places, Fort Collins’ “incentive” program is more, shall we say, frugal. It has three modest elements: we’ll consider tax rebates, if you hit certain performance criteria; we’ll consider using specialized financing tools like the Downtown Development Authority; and we’re nice people. That’s it. Keep that in mind as the Woodward package is discussed.
Calling the Woodward proposal a $23 million incentive package implies that city government is reaching into its vault and handing over bales of cash. That is absolutely not the case. In fact, the proposal is primarily about reducing self-imposed government barriers that shouldn’t be there in the first place. Over the past 20 years or so, city government, one decision at a time, has built a wall of taxes, fees and regulations that serve as an ever-higher barricade to capital investment by companies like Woodward. It would be more accurate to call the Woodward proposal a ‘disincentive mitigation plan.’ The proposal now on the table amounts to leveling the playing field with other communities by partially dismantling a huge self-created financial obstacle
Over the years it has been a challenge to get some to understand how important primary employers are to our quality of life. Successful primary employers are wealth creation devices. They take ideas and raw materials and mix in a dose of courage to create products that bring income into the local economy. That money helps create retail, professional and service jobs. It is in the community’s enlightened self-interest to encourage this type of behavior at every opportunity. (For more on how all this works visit www.FortCollinsWorks.com)
Since it works so well, it is easy to take this moneymaking magic for granted. That would be a mistake in general, but particularly as relates to Woodward. Woodward is a major global player in engine control systems. To have a publicly traded company of their stature in a community of our size is a big coup.
Regarding the so-called ‘incentive package,’ you need to realize that the money doesn’t come from city government; it actually comes from Woodward itself. Woodward’s capital investment and economic activity creates the $23 million, so if there is no expansion, the $23 million won’t even exist to be rebated. Basically, all of the public expenditures included in the Woodward agreement will be paid for by the direct and indirect financial return on Woodward’s capital investments, large payroll and local spending. Effectively, this ‘incentive’ doesn’t cost Fort Collins taxpayers anything. Fort Collins residents receive all the benefits of the project including retaining the existing jobs and 31 acres of improved natural area along the Poudre River at no cost. That doesn’t even include the potential for many future new high-paying jobs with great benefits.
Fort Collins residents understand how important Woodward is to the community. According to public opinion polling commissioned by the Chamber they support mitigating taxes and fees and eighty-five percent think retaining Woodward should be a priority at City Hall.
This doesn’t mean there isn’t some grumbling. One argument is that city government doesn’t need to do anything because, they claim, the company is going to expand here anyway. That would be a very, very unwise assumption. As established above, primary employers like Woodward are highly desirable. Communities all over the world would love to have a company like this in their town and would be willing to do everything in the city’s proposal, plus much, much more. Fort Collins may be Woodward’s current first choice, but it is by no means their only choice. They have viable options.
Another argument is that Woodward is in a community with a great quality of life and should be willing to pay for it. Well, actually, they have helped underwrite the community’s great quality of life for 57 years. The good schools, bike paths, open spaces, parks, planters in the downtown area and hundreds of other examples of quality of life amenities are made possible because Woodward came here in 1955 and subsequently has been joined by Hewlett Packard, WaterPik, Intel, Anheuser-Busch, Odell Brewing, Tolmar and other primary employers. We can have great community amenities in large part because of the community economic prosperity private companies make possible.
Anyway, at the end of a long process, I believe the City Council will approve this proposal to mitigate the disincentives to retaining Woodward. It’s a partnership that has worked to the mutual benefit of the citizens, the overall community and Woodward for nearly six decades. With a wise decision by the City Council and a bit of luck, we’ll enjoy this partnership for another 60 years.
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You can help by
• Attending the City Council Meeting.to show support
Tuesday, March 26, 2013, 6pm
City Hall, 300 LaPorte Ave
• Speaking at the City Council Meeting
Tuesday, March 26, 2013, 6pm
City Hall, 300 LaPorte Ave