BY JULIE KAILUS
Published: 2019.10.01 08:36 AM
For companies with outdoor products or services, Colorado has emerged as one of the trendiest places to set up shop. Now that Denver hosts Outdoor Retailer three times a year, the state has growing cachet with the industry’s biggest and brightest businesses. Some are relocating, starting up or at least considering a satellite office in Colorado.
With leadership from the Office of Economic Development’s nascent Outdoor Industry Recreation Office under new Deputy Director Nathan Fey, as well as an innovative investment play known as Opportunity Zones, Colorado is now squarely on the radar. Companies are recognizing the public land-rich state as prime testing grounds for outdoor sports and adventure products, not to mention a healthy, active lifestyle that could help attract and retain employees.
“Colorado really sells itself,” Fey says. “Our conversations explore the full depth and breadth of the industry we have in the state — beyond manufacturing a product or service. It’s more about an entire industry that values taking care of our public lands and waters, improving public health and safety, and creating new opportunities to grow a talented workforce.”
Outdoor Companies in ‘Opportunity Zones’
A new federal Opportunity Zone (OZ) initiative is further supporting the cause in Colorado. Part of the 2017 Tax Cuts and Jobs Act, OZ addresses uneven economic recovery in low-income urban and rural communities. These overlooked tracts, 126 in Colorado, qualify for favorable treatment of reinvested capital gains and tax forgiveness on new capital gains, giving investors fresh incentive to buy in.
The 160-acre Outdoors Colorado project in Montrose is one example. Six years ago, the Dragoos, a father-son team with vast real estate, investment and outdoor product knowledge, started transforming a fly fisher’s riverfront dream into a state-of-the-art business park along the Uncompahgre River outside Montrose (pop. 19,300). It’s anchored by son David Dragoo’s Mayfly Outdoors, an umbrella company for Abel and Ross Reels, which manufactures some of the best-selling precision-machined fly-fishing products in the world right in Colorado.
“It’s all been rezoned with new utilities and infrastructure,” dad Doug Dragoo says. “It’s all teed up or ‘shovel ready,’ if you will, with one gig of fiber to each lot, eco-friendly power off the lake and solar on some buildings.”
He says the move from California to Colorado was meant to be. “The light went on when we got Outdoor Retailer, with all of the companies in the world that come to Denver. Everyone wants to be in Colorado. Why not build a park oriented around the industry?”
Community leaders thought the same thing in Grand Junction. The Las Colonias riverside development is taking advantage of a natural landscape in a newly designated OZ to entice investors, businesses, residents and visitors to the Western Slope town. Like Outdoors Colorado, outdoor-oriented Bonsai Design anchors Las Colonias. The Grand Junction-headquartered adventure park developer recently built a 500-foot-long, 90-foot-high aerial adventure park at the Children’s Museum of Denver, just one of many nationwide.
Both the Montrose and Grand Junction OZ projects rely on untapped river corridors as a scenic backdrop and established outdoor-industry companies as anchors but have gone in slightly different directions. Colorado Outdoors is a privately developed destination adjacent to Montrose proper. Owned by the city, Las Colonias is in downtown Grand Junction.
“Whereas Mayfly Outdoors is offering activities closely aligned with its brand, like a stocked fish pond, Las Colonias is offering things like a zip-line and activities aligned with that campus’ anchor Bonsai Designs,” Fey says. “With Las Colonias lying in the heart of Grand Junction, the campus there includes lots of public space and outdoor venues, ponds to cool off in, a large outdoor amphitheater and opportunities for small restaurants and brewery space.” And it all connects to the Colorado River Trail.
Essentially, Las Colonias is a 140-acre multiuse riverfront community space with a 15-acre business park nestled inside. Robin Brown, executive director at Grand Junction Economic Partnership, describes the business park sector as office and light industrial spaces “geared towards the outdoor recreation industry.” Bonsai Design is in the process of building a 20,000-square-foot headquarters with space to lease. RockyMounts, a Boulder-born car rack company, recently relocated and will take another 10,000 square feet.
To date, Las Colonias has attracted seven new companies resulting in 57 new jobs. And Brown says others are in negotiations. “Some are service industry, such as bike or SUP rentals, and others are outdoor recreation manufacturers,” she says. “We’ve also had interest from tech companies, specifically software developers who like the live-work-play atmosphere of the park.”
The Las Colonias business park includes an open-air plaza with restaurant/retail located near the river park, which will consist of a “sort of lazy river with two standing waves,” according to Brown. It’s not a jump to imagine how a lazy-river lunch break might be increasingly attractive to working professionals who are tiring of Denver’s development, crowding and skyrocketing home prices. It’s easy to see the appeal of emerging locations such as Grand Junction and Montrose for active young families who are priced out of the city.
OZ program director Jana Persky is hesitant to call such outdoor-oriented work-play parks a trend yet, but it’s clear that new incentives are changing the landscape in far reaches of the state. “Until recently, it was almost entirely a real estate play, but now wehave new guidance and more of a path toward investing in businesses,” she says. “Right now, the most well-suited are still real estate projects or asset-backed businesses, such as a hot springs resort, that are really location-based.”
The ‘people problem’ and other challenges
Both Montrose and Grand Junction are prime examples of how the outdoor industry is taking shape around the state, but there are others. Some have a large, established company already embedded in a community; others are in or near an OZ where a single entity could launch a well-positioned town.
For example, Yeti Cycles, which has long operated out of Golden, has proposed a 25-acre campus in the Front Range community. Nine acres would comprise Yeti’s new headquarters; 16 acres would go to development and office space for companies involved in the outdoor-lifestyle industry.
Closer in, Down River Equipment in Wheat Ridge is creating a suburban spark. Osprey Packs, Alpacka Raft and Voormi in far-flung Cortez, Mancos and Pagosa Springs, respectively, as well as Badfish SUP in Salida, are other outdoor-industry footholds that could spur additional interest in small-town living — and working.
“They have dedicated consumer bases and embrace Colorado as a part of their brand identity despite the challenges they may each face within their regions,” Fey says. Those challenges can include supply-chain issues in a land-locked state. But more commonly, and perhaps surprisingly, Dragoo and Brown agree, is convincing companies to move to the more rural reaches of Colorado.
Despite the fact that economic development offices can now offer up to $15,000 in incentives for every employee a company moves to an OZ, there’s still a people problem, Doug Dragoo says. “It’s a tough sale. People are so engrained in the communities they are in. They don’t want to move.”
Brown says, “Our biggest challenge is the perception that Grand Junction is a small town that’s nice to vacation in but not big enough to do business in. Despite being on I-70, halfway between Denver and Salt Lake City, people think of Grand Junction as ‘far away.’ And we constantly have to prove to prospects that we can support their workforce needs.”
In fact, she argues that Grand Junction has a better workforce potential than the Front Range because of the lower cost of living. “They’re happier, more productive and stay in their jobs longer.”
So what’s the next hot outdoor-industry community? Fey nods to Colorado’s northwesternmost county, Moffat, adjacent to Steamboat Springs, where brands like sleeping bag maker Big Agnes claimed a stake in 2000. “It’s ripe for a more diversified economy through outdoor recreation,” he says. “A brand or industry anchor could find a real following there.”