Regional Economic Summary at April 2010

Every month an economic summary is distributed for the Denver Metro area, including Douglas County. CoCPN is just a tiny little part of this area, but our community does experience the same sorts of trends that the region faces. With the economy showing signs of stabilizing, now may be a good time to take a look at the most recent Metro Denver Economic Development Corporation summary, compiled by Development Research Partners of Littleton, Colorado. Their report is dated 4/6/10, and covers topics such as Economic and Demographic Research, Industry Studies, Fiscal and Economic Impact Analysis, and Real Estate Economics.

Douglas County's unemployment rate is 6.6%, far better than the national average of 10.4%. By comparison, in 2000 we were at 2.1% unemployment; in 2005 4.2%; and in 2009 6.4%. It's thought (and hoped) the unemployment situation bottomed in August, though improvement is painfully sluggish. Retail sales were off 5.9% in 2009. This compares with an 18.3% growth rate in 1999, and a 16.9% growth rate in 2004.

In the metro area, the number of homes sold was down 3.3 year over year, with single family home prices down 13.4%. Metro area building permits totaled 546 in 2009, compared with 20,879 in 2005. Apartment vacancy rates hover in the 8% range. The office space vacancy rate is 14.6%. Industrial vacancy rates are around 7%, with an average lease rates of $4.75 per square foot. Retail space vacancy rates are 8.8%, with average lease rates of $16.23 per square foot. There are 14.3 million square feet of vacant property out of 214 million existing square feet. Would it be hard to get new buildings built in CoCPN when there is already this much empty space in place?

Nationwide, 4th quarter GDP was 5.6%. A 2 to 3% rate is expected in the first quarter of 2010. There is no sign of higher interest rates at this time. It's thought the economy may be trending from recovery to expansion. The Consumer confidence rate is encouraging for the first time since the fall of 2007, and one in twelve companies are expected to add jobs over the next three months. CPI inflation rates are up 2.1% from a year ago, mainly on energy prices. Gasoline has risen twelve cents in the past month. Foreclosure rates are up 6% year over year, and that situation may worsen before it gets better. New homes sales are stifled by rising foreclosure rates, hesitant consumers, and limited credit. Another telling statistic is that even with the recent recovery in stock market prices , household net worth is still down 19% from 2007 levels!

If CoCPN is looking for economic growth to lift us into the future, will we be waiting for years to come? I remember how we thought the community could lift its way out of bankruptcy through economic development. That didn't work then either. This means it may be time to consider a property tax hike to pay for the ongoing operation of CoCPN. Once we get a good handful of box stores built on LaGae and at The Canyons, it may be possible to attract enough sales tax to help pay for CoCPN. At that time the extra property tax to run the CoCPN could go away. But until then, the cost of CoCPN will have to be borne by current residents. As usual, there is no free lunch.

I remember people grousing about a $1 a month hike in their water bill. We always want to spend other people's money thoughtfully. But if you think about it, $12 a year is unlikely to create the sort of impact that falling properly values or stock markets or rising unemployment and foreclosure rates have had on household finances the past three years. However, people feel out of control with some of the bigger picture issues, while it's easy to demonize local targets. Let's hope the folks who advocated for the creation of CoCPN will now stand up to resell the value proposition of CoCPN, and the reasons why citizens should vote for higher property taxes to support CoCPN.

Can CoCPN Council do anything about inflation or interest rates, or unemployment, or housing prices, or the stock market? Of course not. And until the broad economy turns around, we'll all be "pushing on a string" with economic development efforts here in CoCPN. If we have four or five years to wait, that means we have time to plan for the day we hire professionals to help us attract the type of future we truly want. Until then, we need to focus on how to hunker down, tighten our belt, and try to run CoCPN as best we can on the revenues already in place. Remember these facts the next time you start to complain about a pothole or snow removal. Until the economy recovers, do you believe anyone is going to vote for higher taxes to fund CoCPN?