Economic overview - Three local experts weigh in on La Plata County’s statistics

JOE KECK: Southwest Colorado Small Business Development Center

Get your ducks in a row and pull on the bootstraps

In the last year, the overall economic conditions in La Plata County seem to be improving.

Economic vitality in the county seems to be different depending upon the business sector you are in. Construction and real estate seem to be slowly improving. Oil and gas drilling appears to have dropped off considerably over the past few years. Some sectors appear to be doing fine, such as niche manufacturing and export businesses. Retail sales have seen a steady increase this year in Durango, which indicates that consumers are spending more. At the SBDC, we have seen quite an uptick in client requests, especially in the past six months. Our “Starting Your Business” workshops have been running consistently and attracting 15 to 20 people on average. My sense is that some of this demand is driven by people having an entrepreneurial idea, and some by people hedging their bets against being laid off.

Overall, our local economy does seem to be faring much better than the state and national economy, with lower unemployment rates, and increasing retail sales tax collections. Durango continues to be highly rated as a great place to live. This appears to be driven by a number of quality-of-life amenities, such as the mountains, rivers, climate, college town, and overall diversity – especially for a lower populated, rural area. One key element of this quality of life is the number of highly educated and skilled people living here. Fort Lewis College is a major contributor to this element of our community.

What does the future have in store for us? My sense is that we will continue to see slow but steady improvement in our county economy. Housing and construction will continue to make some improvements as foreclosures work their way through the process.

Solid business planning will continue to be extremely important in determining the success of local businesses. Thorough business planning can really take a lot of the risk out of doing a business expansion or start-up. That is where resources such as the La Plata County Economic Development Alliance, Region 9 Economic Development District, the local Chambers of Commerce (Durango, Bayfield, Ignacio) and the SBDC can make a difference. We also have some excellent collaborative relationships between these economic development and business development organizations. The level of collaboration and partnering we do is really a best practice in the state. These partnerships really can make a positive difference for our clients.

Overall, I think our economic future looks pretty good. I would just encourage folks to use the business and economic development resources available and bootstrap their way to success. Developing a good roadmap for their business can really make all the difference in the world.

At the Southwest Colorado Small Business Development Center, we have counseled about 400 small business clients in the last year. Over 1,300 people have attended workshops and seminars offered by the SBDC. Roughly half of our clients are start-ups, and they come to us for help in getting their arms around a business idea. This usually entails providing assistance in determining the feasibility of their business idea. We work folks through the business-planning process to help them prove or disprove an idea. I call it “getting your ducks in a row.”

The SBDC has some unique competitive advantages when it comes to providing technical assistance to small businesses. First, we have a 35-person Business Advisor Network that brings a lot of great expertise and experience to bear for our clients. Our advisors have expertise in a wide array of skills, from accessing venture capital to marketing, finance, social media and more.

The second advantage of SBDC is data mining to help determine market potential for a business start-up or expansion. We have some great databases that make it easier to find good market research. We also assist with the analysis of the data, which can be very helpful to a small business.

It can be a daunting task for many smaller businesses to find good market research data and also understand how to use it effectively. The SBDC provides Economic Gardening databases and consultants.

ROGER ZALNERAITIS: La Plata Economic Development Alliance Executive Director

County sees slow and steady improvement

The La Plata Economic Development Alliance has begun tracking key indicators through a monthly “dashboard” on its website (http://www.yeslpc.com/1962/featured-newslines/economic-development-alliance-economic-dashboard ). Through that, we believe the local economy is slowly and steadily improving, but that this improvement hasn’t translated into more jobs yet.

First, we’ve seen steady growth in new commercial electric accounts this year, as well as increasing energy demand from commercial users. The City of Durango has also been issuing more business licenses this year than last. Higher electricity use and more business licenses are indicative of better economic activity in the commercial sector, so this is generally a positive sign.

The natural gas sector has been flat through the first half of the year. This is actually not bad, considering that natural gas prices are near record lows. However, reports out of the field suggest that we are continuing to lose drilling rigs and that many gas companies are reducing their scope of activity locally. We may see a slowdown in natural gas activity as the year progresses.

Tourism is a little mixed. Airport enplanements have slowed, as have visits to key regional attractions such as the Durango & Silverton Narrow Gauge Railroad. However, lodging taxes and sales taxes remain strong, which is good for our retail businesses. Anecdotally, it appears that the summer is off to a solid start, so tourism numbers may strengthen as the year progresses, particularly with the Pro-Cycling Challenge coming on Aug. 20.

Another key component of the local company is construction. Building permits have been strong in the county, but weak in the City of Durango. But what Durango is lacking in quantity, it is making up for in size. One of the permits issued for the City is the new Holiday Inn, a multi-million dollar project that will provide much-needed lodging capacity for our region. Further, work is under way at the new Mercury Village immediately south of the Durango Mall. According to Jan Owen, Mercury Payment System’s senior marketing manager, the company is continuing to hire new employees while the building is under construction. There are currently 400 employees in Durango, and by the time Mercury Village opens the count is estimated at 600. This project and Holiday Inn represent some of the largest private commercial projects the region has seen in years.

The most important factor, however, is jobs, and it is here that the year has been the most disappointing. Job growth is flat so far this year, meaning that increased commercial activity is not yet translating into more employment for our residents. However, hiring tends to lag some of these other indicators, such as building permits issuances and new business starts. We therefore may see job growth as the year progresses.

In summary, the Alliance is cautiously optimistic about economic growth. There are significant risks such as soft gas prices, as well as national and international economic trends. At the same time, there is great opportunity for growth and jobs as reflected in new business activity, the new hotel, and the Mercury Village campus. Keep an eye on our Dashboard to see how the rest of the year turns out for our economy.

LAURA LEWIS MARCHINO: Region 9 Economic Development District of Southwest Colorado, Assistant Director

By the numbers, it’s a great place to live

It is not new news to say that La Plata County is a great place to live.

Region 9, which covers the five counties, ten municipalities and two Indian tribes in Southwest Colorado, reviews and compiles data, and the data shows that we compare favorably. La Plata County’s unemployment and foreclosure rates are the lowest in the region, and our per capita income the highest going from $36,500 last year to $39,769 this year. La Plata County has seen significant transportation construction work into the region, including the airport, trails and transit. Agriculture is also seeing renewed interest. Total employment has grown 14 percent since 2001, though the peak was in 2007, prior to the recession. Currently 32,446 persons are employed in the county.

The economy is grouped into 20 broad job sectors called NAICS (North American Industry Classification System). These job sectors allow us to measure the relative strength of an industry over time. La Plata has seen the most growth in the Mining and Utilities sector (includes oil and gas), as well as the Finance, Insurance and Real Estate sector, growing 110 percent and 29 percent respectively. Declines are currently seen in two sectors: Manufacturing and Information, which shows a 33 percent and 15 percent job loss. However, it is important to note that businesses classify themselves, and that too can vary over time.

Top employers in the county include a cross section of job sectors, including: the Southern Ute Indian Tribe (administration and casino), Mercy Regional Medical Center, City of Durango, La Plata County, Durango Mountain Resort, Mercury Payment Systems, Fort Lewis College, Wal-Mart, and San Juan Basin Health Department.

When viewed as a whole, the even better news is that La Plata County has a diverse economy and is not dependent on any one sector. This has served the county well during the recession, which dramatically impacted tourism and construction. When an economy is dependent on only one sector, economic ups and downs have a larger overall impact.

Areas where the county struggles include the number of uninsured, affordable rental housing for families, and the fact that the level of income necessary to support a given size and type of household is higher than the minimum wage. Livable wages vary by community, and Region 9’s most recent estimate is that a single person renting a one-bedroom apartment would need to make $10.65 an hour to “make it.”

The livable wage for the same person in Durango would be $11.57 and in Ignacio would be $11.87. These calculations take into account transportation, housing and basic expenditures such as food, clothing, and health care. When one earns less than a livable wage, and has a family, he or she is forced to make undesirable choices such as working more jobs, longer hours, longer commutes or giving up basic items such as telephone or insurance.

One area that requires economic planning is how to prepare for the growing aging population. Though La Plata County’s changing demographics are no different than the rest of the United States, La Plata County will need more senior-friendly housing, assisted living and nursing-care facilities in order to keep our population in the community as they age. Without them, the county is in danger of losing younger residents who, unable to move aging parents here, must relocate.

Region 9 works collaboratively with the private and public sectors to enhance the economic conditions in the area and improve the region’s prosperity. For more information, go to www.scan.org, call 970-247-9621 or email laura@scan.org.

An artist’s rendering shows the new Mercury Payment Systems building, which will be part of the Mercury Village site created by Russell Planning & Engineering. It emphasizes attention and care toward outdoor amenities and connectivity of the building and site to the natural environment, specifically the river corridor. The building will be respectful of the Animas River user as well as the Animas River Trail user.  The buildings can be viewed in the round (no back to the river). The building will include a lower walkout level, which integrates it to the natural grades rather than having it perched on a newly formed hill. The building will be sustainable in nature and sensitive to its use of resources. The project is pursuing LEED Silver certification. One of the most beneficial features for employees is the maximization of day lighting and views, which is also a sustainable feature. Gregg Andrulis of Russell Planning & Engineering said the estimated date for the completion of the Mercury Village site is December 2012, and completion of the Mercury building is October, 2013. Enlarge photo

An artist’s rendering shows the new Mercury Payment Systems building, which will be part of the Mercury Village site created by Russell Planning & Engineering. It emphasizes attention and care toward outdoor amenities and connectivity of the building and site to the natural environment, specifically the river corridor. The building will be respectful of the Animas River user as well as the Animas River Trail user. The buildings can be viewed in the round (no back to the river). The building will include a lower walkout level, which integrates it to the natural grades rather than having it perched on a newly formed hill. The building will be sustainable in nature and sensitive to its use of resources. The project is pursuing LEED Silver certification. One of the most beneficial features for employees is the maximization of day lighting and views, which is also a sustainable feature. Gregg Andrulis of Russell Planning & Engineering said the estimated date for the completion of the Mercury Village site is December 2012, and completion of the Mercury building is October, 2013.