National Western Center

LOCAL IMPACT GLOBAL REACH

NATIONAL WESTERN CENTER NextGen Agribusiness Economic Development Strategy

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PAGE 1 Acknowledgments

National Western Center (NWC) Technical Advisory Committee Executive Oversight Committee Paul Andrews, National Western Stock Show Kelly Leid, Chair, City and County of Denver Ron Rohr, National Western Stock Show Albus Brooks, City Council, City and Brian Dunn, Great Divide Brewing County of Denver, District 9 Elizabeth Garner, State Demographer Diane Barrett, City and County of Denver Anne Hayes, Westfield Company, Inc. Brendan Hanlon, City and County of Denver Jocelyn Hittle, Colorado State University Cristal DeHerrera, City and County of Denver James Pritchett, Colorado State University Drew Dutcher, National Western Center Citizens Advisory Committee Kathay Rennels, Colorado State University

Paul Andrews, National Western Stock Show Stephen Weiler, Colorado State University

Pat Grant, Western Stock Show Association Bill Stoufer, Ardent Mills

Tony Frank, Colorado State University Tom Lipetzky, Colorado Department of Agriculture City and County of Denver George Merritt, Denver International Airport Mayor’s Office of the National Western Center Jeff Popiel, Geotech Environmental Equipment, Inc.

Kelly Leid, Executive Director Consultant Team Support

Gretchen Hollrah, Deputy Director Chris Brewer, AECOM

Office of Economic Development Bill Anderson, AECOM

Paul Washington, Executive Director Lindsey Sousa, AECOM

Jeff Romine, Chief Economist Vicky Salin, Texas A&M University Ian Dehmel, Executive Assistant

2 City and County of Denver Table of Contents

EXECUTIVE SUMMARY...... 9 Prelude...... 10 Approach...... 10 Project Context...... 11 Impact of Global Agricultural Trends...... 13 Agriculture Sectors Strong in Colorado...... 14 Front Range Economic Context...... 14 Innovation Districts and Economic Development...... 15 Strategies for Urban Infill and Food-Linked Manufacturing...... 18 Priority Clusters for NWC...... 20 Next Steps...... 24 GLOBAL TRENDS AND LOCAL IMPACTS...... 29 Introduction & Core Findings...... 30 Global Agricultural Outlook...... 31 Global Market Factors...... 33 North American Factors...... 35 Colorado Agricultural Data...... 39 Front Range Regional Economic Data...... 50 INNOVATION DISTRICTS AND ECONOMIC DEVELOPMENT...... 55 Introduction...... 56 NWC Implications...... 56 Innovation and Economic Development...... 57 PRIVATE SECTOR OPPORTUNITIES...... 71 Introduction...... 72 Methodology...... 74 Priority Clusters...... 75 Core Findings...... 85

September 2016 3 National Western Center

END MARKET OPPORTUNITIES...... 101 Introduction...... 102 Discussion...... 108 REGIONAL REAL ESTATE PROFILE...... 113 Introduction...... 114 Methodology...... 114 Core Findings...... 115 SITE AND NEIGHBORHOOD...... 139 Urban Infill and Manufacturing...... 140 CONCLUSIONS...... 147 Next Steps...... 148

4 City and County of Denver Table of figures

Figure 1. The Agriculture Innovation Triangle™...... 12 Figure 2. NWC - Innovation District Size Comparison...... 17 Figure 3. NWC - Economic Area of Influence in the City and County of Denver...... 19 Figure 4. Summary of Global Agricultural Trends...... 32 Figure 5. Agricultural Land (% of land area)...... 33 Figure 6. Agricultural Imports by Country...... 34 Figure 7. North American Farm Output per Worker...... 36 Figure 8. US Agricultural Productivity...... 37 Figure 9. North American Factors- Market Value of Agricultural Products, 2012...... 38 Figure 10. Top 25 States in Agriculture (NAICS 11) by LQ, 2014...... 39 Figure 11. Top 25 States in Crop Production Employment (NAICS 111) by LQ, 2014...... 40 Figure 12. Top 25 States in Animal Production Employment (NAICS 112) by LQ, 2014...... 41 Figure 13. Top 25 States in Ag and Forestry Support Services Employment (NAICS 115) by LQ, 2014...... 42 Figure 14. Top 25 States in Food Manufacturing Employment (NAICS 311) by LQ, 2014...... 43 Figure 15. Top 25 States in Beverage Manufacturing Employment (NAICS 3121) by LQ, 2014...... 44 Figure 16. Top 25 States in Animal Slaughtering and Processing Employment (NAICS 3116) by LQ, 2014.....44 Figure 17. Top 25 States in Cattle Ranching and Farming Employment (NAICS 1121) by LQ, 2014...... 45 Figure 18. Top 25 States in Other Food Manufacturing Employment (NAICS 3119) by LQ, 2014...... 46 Figure 19. Annual Growth Rate of Colorado Agricultural Exports (2005-2015)...... 48 Figure 20. Annual Colorado Agricultural Product Export Growth Rates (2005-2015)...... 48 Figure 21. Producer Price Index, Farm Products, 1995 to 2015...... 49 Figure 22. Rocky Mountain No 2 Diesel Retail Prices (Dollars per Gallon)...... 49 Figure 23. New Residents / Year, 16-County Front Range...... 50 Figure 24. Annual Job Growth Rate, 2009-2014, Noted Metro Areas...... 51 Figure 25. Cost of Living Comparisons, Noted Metropolitan Areas...... 51 Figure 26. Annual Percent Change in Key Industries, GDP, State of Colorado...... 52 Figure 27. Higher education R&D expenditures, by R&D field: FYs 2005–14, in thousands of US Dollars...... 63 Figure 28. Cumulative Higher education R&D expenditures, by R&D field: FYs 2005–14, in Thousands of US Dollars...... 64 Figure 29. Cumulative R&D Expenditures, Colorado Institutions, by R&D field: FYs 2005–14, in Thousands of US Dollars...... 65 Figure 30. Federally financed higher education R&D expenditures, by federal agency: FY 2014 (Dollars in Thousands)...... 65 Figure 31. Total U.S. Ag Tech Investment...... 66 Figure 32. Breakdown of 2015 Ag Tech Investments...... 67 Figure 33. Value Chain...... 73 Figure 34. Agriculture-Related Cluster: Financial Services...... 75

September 2016 5 National Western Center

Figure 35. Agriculture-Related Cluster: Animal Health Research & Testing...... 75 Figure 36. Agriculture-Related Cluster: General Office...... 76 Figure 37. Agriculture-Related Cluster: Grains...... 77 Figure 38. Agriculture-Related Cluster: MFG - Beverages...... 77 Figure 39. Agriculture-Related Cluster: MFG - Dairy / Cattle...... 78 Figure 40. Agriculture-Related Cluster: MFG - Sensors & Instruments...... 79 Figure 41. Agriculture-Related Cluster: MFG - Specialty Foods...... 80 Figure 42. Agriculture-Related Cluster: Agriculture Potato Production...... 80 Figure 43. Agriculture-Related Cluster: Software...... 80 Figure 44. Agriculture-Related Cluster: Urban Vertical Agriculture...... 81 Figure 45. Agriculture-Related Cluster: Aerospace UAV Mapping...... 81 Figure 46. Agriculture-Related Cluster: Water Infrastructure Energy Engineering...... 82 Figure 47. Agriculture-Related Cluster: Wholesale food...... 83 Figure 48. Employment Density (2014) Aerospace UAV Mapping...... 86 Figure 49. Employment Density (2014) Animal Health Research...... 87 Figure 50. Employment Density (2014) Financial Services...... 88 Figure 51. Employment Density (2014) General Office...... 89 Figure 52. Employment Density (2014) Grains...... 90 Figure 53. Employment Density (2014) MFG - Beverages...... 91 Figure 54. Employment Density (2014) MFG - Cattle Dairy...... 92 Figure 55. Employment Density (2014) MFG - Sensors Instruments...... 93 Figure 56. Employment Density (2014) MFG - Specialty Foods...... 94 Figure 57. Employment Density (2014) Potatoes...... 95 Figure 58. Employment Density (2014) Software...... 96 Figure 59. Employment Density (2014) Urban Vertical Ag...... 97 Figure 60. Employment Density (2014) Water Infrastucture Engineering...... 98 Figure 61. Wholesale Food...... 99 Figure 62. Inventory Percentage by Property Type...... 116 Figure 63. Vacancy Rates by Property Type...... 117 Figure 64. Vacancy Rates by Property Type (Continued)...... 118 Figure 65. Absorption by Property Type...... 119 Figure 66. Annual Net Inventory versus Occupancy...... 120 Figure 67. Office Analytics...... 121 Figure 68. Office Absorption versus Delivered...... 122 Figure 69. Office Absorption versus Delivered (Continued)...... 123 Figure 70. Office Rent Premiums...... 124 Figure 71. Retail Analytics...... 125 Figure 72. Retail Absorption versus Delivered...... 126 Figure 73. Retail Rent Premiums...... 127 Figure 74. Multifamily Analytics...... 128 Figure 75. Multifamily Absorption versus Delivered...... 129 Figure 76. Multifamily Rent Premiums...... 130 Figure 77. Industrial Analytics...... 131 Figure 78. Industrial Absorption versus Delivered...... 132 Figure 79. Industrial Rent Premiums...... 133 Figure 80. Flex Analytics...... 134 Figure 81. Flex Absorption versus Delivered...... 135 Figure 82. Flex Rent Premiums...... 136

6 City and County of Denver Local Impact global reach 

Acronyms BRIC acronym for an association of five major GMO Genetically Modified Organism emerging national economies: Brazil, Russia, NAICS North American Industrial Classification India, China and South Africa. System CAC National Western Citizens Advisory Committee NDCC North Denver Cornerstone Collaborative CAGR Compound Annual Growth Rate NWC National Western Center CSA Consolidated Statistical Area NWSS National Western Stock Show CSU Colorado State University OED City of Denver, Office of Economic EIA US Energy Information Administration Development FAO United Nations Food and Agriculture R&D Research and Development Organization SDI Subsurface drip irrigation FSMA Food Safety Modernization Act STEM Science, Technology, Engineering, Math FDA Food and Drug Administration TAC Technical Advisory Committee FDI Foreign Direct Investment USDA US Department of Agriculture GDP Gross Domestic Product WSSA Western Stock Show Association Key Terms

Agriculture Centered along the Front Range, this triangle is anchored by the National Western Center, Innovation Triangle Denver International Airport, and Colorado State University. Food Hub According to USDA, Food Hubs are overseen by an organization that actively organizes and aligns food producers, distributors, marketers, and consumers. The intent of a Food Hub is to offer these services at an affordable price, allowing producers to gain entry into new markets, with facilities that can support greater volumes of food. Innovation Districts Locations where federal funding for basic research can be leveraged to support private sector opportunities. These placed-based environments become key ingredients in innovation, as immediate proximity creates opportunities for “accidental collisions” between people to drive information exchange. Over time, successful innovation districts are able to leverage greater density & interest in mixed use to create place-based outcomes that private-sector companies increasingly seek out to access and cultivate talent. Next Gen A term that speaks to the impact of new technologies and innovations that are transforming Agriculture traditional agriculture, including mapping, drones & robotics, and sensors. Connections between agriculture and food production, bio-energy, water, waste management, and sustainability have also growth in prominence. Front Range A group of counties along the Front Range of the Rocky Mountains, extending generally from Pueblo through Colorado Springs, Denver and Boulder to Fort Collins. Location Quotient A Statistical tool that quantifies the level of regional concentration for a particular industry, cluster, occupation, or demographic group relative to national averages. It can reveal what makes a particular region “unique” in comparison to the national average.

September 2016 7

Executive 1 Summary National Western Center

1 PRELUDE The adoption of the National Western Center While plan components affirm the ideals of (NWC) Campus master plan in March 2015 by heritage, discovery, stewardship and leadership, Denver City Council has set the stage for a there is a clear intent that NWC will also serve unique opportunity for the Front Range, Colorado, as the “front door” for Colorado agriculture the Rocky Mountain West, and the World. and the global destination of consequence for agriculture innovation, strategically positioned Plans to transform the historic home of the to address global food challenges (quality, National Western Stock Show (NWSS) have quantity, and cost) in new and compelling ways, triggered critical conversations about the role setting new standards for how we care for the of this dynamic, year-round campus in driving land and feed the planet. innovation in agricultural-related sectors. Over time, NWC will become a key driver to To be clear, as the most successful of Innovation Executive Summary advance the Front Range economy, resulting in Districts (Boston, San Diego, Silicon Valley) technology innovation and adoption, business have taken years to mature, our expectations creation and growth, and new employment for the pace of business and job creation linked opportunities. Already, partnerships announced to research and innovation at NWC need to be in 2016 between Colorado State University tempered. For this reason, the NWC NextGen (CSU) and Denver Water have laid the Agribusiness Economic Development Strategy groundwork for a nationally-significant water is but the first in a series of engagements to research center at NWC. refine and confirm the NWC master plan’s bold vision and mission, anchoring it in a fiscal The intention of this NWC NextGen Agribusiness and economic development context, with the Economic Development Strategy is to expand clear intent of creating a dynamic place-based the NWC conversation beyond entertainment, platform for agriculturally-focused innovation, as competition, and education and into research well as job creation. and innovation. Outcomes are anticipated to leverage the site’s rich history and our key The NWC is poised to be a global example economic and research factors to expand of how thoughtful design and intentional interconnections across a growing public and programming can bring together a range of private agricultural innovation community, one stakeholders to solve issues, both community that is both intensely local and increasingly and regional in scale. This report continues global in nature to help address global food and Denver’s efforts to diversify and create resources challenges. opportunities for job growth and provide a range of opportunities to develop local business and workforce training opportunities.

APPROACH The Team (composed of AECOM, the Technical The approach was anchored by three missions: Advisory Committee (TAC), and partners and entities of the City, CSU, and WSSA) was 1. Place NWC revitalization in an economic and engaged to complete an analysis of economic market context, leveraging work already development implications associated with completed by Colorado State University National Western Center (NWC) revitalization. (CSU) focused on the emerging agricultural The team assembled for this effort included value chain along Colorado’s Front Range. Vicky Salin with Texas A&M University. The team 2. Consider Colorado’s existing businesses, effort was supported by a Technical Advisory research and activities, which combined with Committee, made up of individuals from all facets new innovation and practice, will determine of Front Range agriculture, including Colorado key business clusters that may grow and State University and the National Western Center.

10 City and County of Denver Local Impact global reach

evolve to directly or indirectly serving the retail and industrial markets to sustain 1 global marketplace. Investing in these clusters private sector development at NWC. Executive Summary potentially would grow businesses, revenue zz Completed case studies of innovation and sales, and / or employee opportunities. districts focused on agriculture, the plant and life sciences, and biotechnology, 3. Establish a high-level understanding of the to understand economic development opportunity for commercial and private implications for NWC. sector activity at the NWC site, framing order of magnitude land requirements and employment levels. Geographies

Within these missions, AECOM: The study focuses on several geographies as a focus of the analysis: zz Identified industry sector, cluster, and end-market opportunities that build on 1. The National Western Center site, covering the inherent strengths and comparative about 250 acres advantage of NWC and the Front Range. 2. A larger area of influence surrounding the zz Summarized national and global agriculture NWC, covering about 800 acres industry trends, in context with priority 3. The Front Range, generally extending from clusters identified in the CSU study. Pueblo to Fort Collins zz Evaluated regional commercial real estate 4. The Rocky Mountain West, extending from trends to frame the ability of regional office, New Mexico and Arizona through Colorado to Idaho and Montana

PROJECT CONTEXT Economic opportunity unfolds over time from Chain along Colorado’s Front Range” forms harnessing linkages across innovation, economic the analytical basis for this effort, highlighting positioning, and leveraged private and public the importance of a holistic strategy that looks efforts to enhance and grow “the enterprise”. In across food-related sectors to identify emerging a similar fashion, the NWC NextGen Agribusiness opportunities. While other regions are looking at Economic Development Strategy should be discrete pieces of the food chain, the Front Range understood in context with evolving Front Range has an opportunity to identify larger emerging economic opportunities, research undertaken by opportunities. Colorado State University (CSU) and its public and private research partners, and the history The CSU study identified 460 companies and opportunities linked with the National involved in innovation within the Agricultural Western Center’s traditions and its partner Value Chain. Economic research demonstrates organizations. that investment in research and innovation results in many positive outcomes for the economy, from sustaining and evolving existing sectors and business to generating new The importance of a holistic business and products opportunities. Our study incorporates the findings and outcomes from strategy that looks across the CSU study to understand these firms and food-related sectors to identify others businesses connections across industry sectors. With the resulting goal of strengthening emerging opportunities. businesses, evolving and innovating new products and methods, and encouraging The 2014 CSU study, “Emergence of an investment and creating economic outcomes Innovation Cluster in the Agricultural Value (such as sales, revenue, and employment).

September 2016 11 National Western Center

The CSU study identified specific industry The intent of this initial effort is to better define 1 clusters for further study: the NWC economic opportunity, identifying next steps that drive outcomes which enhance job zz Water technology, infrastructure, analytics, growth and regional economic development. The and management resulting strategy has focused energy on three zz Soil fertility and pest control, plant genetics areas of emphasis: and new crop varieties 1. Leverage NWC agriculture-related innovation zz Animal health, nutrition, and herd to drive economic opportunity for the Front management Range and the State of Colorado. zz Agricultural information systems 2. Leverage reinvestment to facilitate infill zz Sensors, testing, and analytics for product redevelopment, both within NWC, as well as quality and biosafety the broader area of influence. zz Bioenergy 3. Frame new revenue streams to address Executive Summary zz Commodity processing and food project capital requirements and long-term manufacturing, including dairy NWC operating needs. zz Beer, wine, & spirits production and marketing zz Natural, organic, and local foods, including “Fast & Fresh” food service

Figure 1. The Agriculture Innovation Triangle™

Understand and create deliberate connections to Denver International Airport, CSU and NWC for agricultural field research, establishing the regional “Agriculture Innovation Triangle”

12 City and County of Denver Local Impact global reach

Vision for Economic Development focused on evaluating relationships and 1 inter-connections between humans, animals, Executive Summary This effort has clarified emerging elements of an and the environment, in context with factors economic development vision for NWC, anchored such as infectious disease, environmental by research which shows that NWC has the clear toxicology, and food safety. The One Health ability to expand Front Range opportunities Initiative was initially launched in 2013, and in industry sectors related to agriculture, received further university grant funding technology, innovation and research: support in 2015 to drive promising areas of Food Including Nutrition, Safety, Security, One Health research. Quantity, Quality, Affordability 3. Leverage the CSU / Denver Water Animal Including connections between partnership for water research at NWC. Health humans and companion animals 4. Connect with existing food-linked clusters Water Including research, demand, supply, in adjacent neighborhoods such as RiNo, & quality Globeville, Five Points, and Elyria Swansea. 5. Understand connections to Denver Emerging anchors of the economic vision are clear: International Airport for agricultural field research, establishing the regional 1. Leverage private sector opportunities “agriculture innovation triangle”. emerging across the “Agricultural Innovation Triangle” to drive neighborhood and regional 6. Confirm broader ways in which local supply job growth. chains connect restaurants, wholesalers, and warehouses with manufacturing facilities and 2. Understand and leverage connections to agricultural fields. the CSU One Health Initiative, which is

IMPACT OF GLOBAL AGRICULTURAL TRENDS The analysis found that global agricultural & health. Traditional producers are now markets are under strain, linked with growth in reacting, pivoting toward healthier ingredients. global population (9.7 billion people by 2050), zz Regulatory Factors: The 2011 Food Safety growth and urbanization, gradual decreases in the Modernization Act (FSMA) gives the Food amount of arable agricultural land, and pressure and Drug Administration (FDA) a legislative on water resources. Recent cyclical economic mandate to require science-based factors linked with decreasing commodity prices preventive controls across the food supply, and a strong US Dollar relative to other world more rigorous inspection and compliance currencies have been very significant. While measures, greater oversight over imported these headwinds have been offset to an extent food, and greater authority to recall food by lower fuel costs, lower commodity prices products. have encouraged considerable consolidation among traditional agriculture and food production companies. Implications for NWC include: zz Emergence of a global middle class is driving demand for higher value food, and creating opportunities for Front Range companies to expand markets through export assistance. zz Across North America and the U.S. in particular, consumer tastes are shifting, linked with debate about food safety, food quality,

September 2016 13 National Western Center

1 AGRICULTURE SECTORS STRONG IN COLORADO The Team undertook an analysis of employment strength in non-alcoholic beverages, breweries, trends for Colorado and the Front Range, looking distilleries, dairy, grains, and specialty foods at changes in employment between 2009 and manufacturing. 2014, with the intent of understanding how the State has accelerated out of the Great Recession. For NWC, the analysis also points to In 2014, Colorado agriculture employment opportunities linked with agriculture-related ranked 25th in the US with a location quotient sectors that would not be traditionally seen as of 0.69 (representing 14,900 jobs), pointing to connected to agriculture, including veterinary an employment level in “traditional” agricultural services, research and development in production that is “under-sized” relative to biotechnology, and water-related technology national averages. Statewide strengths in and engineering services. The cluster analysis “traditional” agriculture include cattle and dairy sheds considerable additional light on these

Executive Summary production as well as meat processing, wheat, emerging cluster opportunities that are likely and potato production. For the Front Range, to shape the future economic development there is clear manufacturing and food processing opportunity at NWC.

FRONT RANGE ECONOMIC CONTEXT The NWC NextGen Economic Development service area has grown by 442,000 residents, total Strategy is unfolding at a unique moment in time treated water consumption has only increased from for the Front Range and Colorado. Unlike other 59.5 million gallons to 60.1 million gallons. With the U.S. Metropolitan Areas, the Front Range has Front Range poised to see population growth of accelerated out of the “Great Recession” at a up to 80,000 residents per year according to the dramatic pace and now competes favorably with Colorado State Demography Office, organizations the top 20 U.S. metropolitan areas, including such as Denver Water will need to: established bio-technology hubs in Boston, San Francisco/Silicon Valley and San Diego. This zz Fund new approaches to help customers consequential rate of growth has direct bearing become more efficient with water on the future trajectory for development of NWC, zz Identify sources of reusable water (i.e. grey focused on demand for agriculture, food, water, water systems) built commercial and industrial real estate, zz Support innovation and regional job creation. Our analysis yielded key performance metrics that frame market Growth in Denver Metropolitan Area Food opportunities for NWC: Exports: According to the Brookings Institution, between 2003 and 2014, 9 out of 10 food Regional Real Estate: Future private sector manufacturing sectors experienced annualized development at or adjacent to NWC ultimately growth in exports of greater than 10% per year. needs to unfold in context with broader regional Sectors such as Meat and Poultry remained demand for office, retail, residential, and largely constant over the period. Beverage industrial real estate. Since 2006, the Denver products accounted for the largest aggregate Region has sustained relevant shares of growth increase, followed by dairy products and grain & in occupied commercial real estate since 2006, oilseed products. With the Front Range offering a for example capturing about 745,000 square feet number of firms with strength in food production per year out of total growth in regional occupied and processing, opportunities to support new space of about 1.8 million square feet per year. job creation through export assistance will be Regional Water Consumption: Denver Water important. provides drinking water to a large service area along the Front Range. Since 1970, while their

14 City and County of Denver Local Impact global reach 1

INNOVATION DISTRICTS AND ECONOMIC Executive Summary DEVELOPMENT Agriculture and innovation served as the focal point for the groundbreaking 2014 CSU study, For NWC, future activities need The Emergence of an Innovation Cluster in the Agricultural Value Chain along Colorado’s to unfold across a spectrum of Front Range, clearly delineating emerging R&D activity in the plant and opportunities to grow an innovation-led industry cluster in agriculture and food. This effort brings life sciences, rather than only the economic development implications for NWC in agriculture; strategies that in supporting innovation into sharper focus, to frame how deliberate policy choices can be link animal and human health leveraged to accelerate regional job creation and enhance the international competitive could be one example. position of the Front Range.

Our experience shows that university-linked research and development (R&D) as an economic 1. From traditional university-led research development driver is a recurring theme, closely development to explicit tech transfer and associated with the development of research partnership with the private sector parks. Over the last 30 years, attraction of R&D 2. From isolated suburban corridor and campus has been consistently seen as a route to expand locations to increasingly urban, more local economic activity, create new businesses compact and dense locations, connected by that foster productivity improvement and transit and anchored by a more diverse mix innovation, and drive job creation. of uses Universities like Colorado State University (CSU) Innovation Districts are increasingly seen as have always been crucial anchors for research essential locations where federal funding for and development, initially sponsoring the global research in the plant and life sciences can be emergence of research parks to create locations leveraged to spin off ideas into private sector where public and private research grants can be opportunities. These placed-based environments leveraged to create new spin-off companies. In become key ingredients in innovation, as looking at U.S. data from the National Science immediate proximity creates opportunities for Foundation, it is clear that basic agricultural “accidental collisions” or “deliberate serendipity” research represents a relatively small portion between people. Ultimately, successful of overall university R&D spending, about 5% innovation centers are able to leverage greater nationwide in 2014. Spending in the medical and density & interest in mixed use to create place- biological sciences represents more than 45% based outcomes that private-sector companies of total R&D activity. For NWC, future activities increasingly seek out to access and cultivate need to unfold across a spectrum of R&D activity talent. The combination of growing critical mass in the plant and life sciences, rather than only in and a technical workforce facilitates innovation agriculture; strategies that link animal and human and supports employee retention. health could be one example. For NWC, the analysis highlights three primary While the research park model has been around variations linked with varying levels of university for more than 30 years, recent evolution in the participation: model is important for NWC, linked with two explicit transitions that have emerged in the past Research and innovation Districts: Place-based 15 years: districts linked to health care and life sciences research; CORTEX in St. Louis is one example

September 2016 15 National Western Center

Food Hubs: Districts which align farmers with 1 food producers and consumers; the Louisville Food Port and Detroit Eastern Market District are examples.

Regional Value Chain: regional focus on a specific sector, but more about corridors and branding; KC Animal Health Corridor is an example

Core Implications for NWC Include:

zz Place based innovation districts tend to incorporate up to 3 million sq. ft. of office & lab space, at urban / neighborhood Executive Summary development density (i.e. floor to area ratios between 1.0 to 7.0), with mixed use and transit connectivity. Lab spaces tend to cover up to 50% of these programs. zz Successful districts tend to have a focus or emphasis; research related to health care is an example. zz Successful districts incorporate partnerships with the private sector, including companies and developers. zz NWC innovation will require a minimum amount of land, which may or may not be available within the Core NWC site, extending to a larger “Area of Influence”, defined below.

The following map summarizes the geographic scale of several specific Innovation Districts, all placed in scale with the size of NWC and a broader “Area of Influence” around the site. The other area of influence shown in figure 2 represents possible areas where industry associated with the NWC could consider locating in the future.

16 City and County of Denver Local Impact global reach

Figure 2. NWC - Innovation District Size Comparison 1 Executive Summary

51st Area of Influence

NWC 250 Acres

Legend

NWC NWC Area of Influence County Boundry

Land Area: 177 Acres Land Area: 31 Acres Building Area: 3.7 Million Sq Ft Building Area: 1.5 Million Sq Ft

Science and St Louis Cortex District Technology Park Baltimore

Land Area: 27 Acres Land Area: 15 Acres Building Area: 1.9 Million Sq Ft Building Area: 1.5 Million Sq Ft MIT Durham Master Innovation plan District

Miles 0 ¼ ½ 1 ¯

September 2016 17 National Western Center

1 STRATEGIES FOR URBAN INFILL AND FOOD-LINKED MANUFACTURING NWC revitalization is unfolding within a broader NWC Implications: “area of influence” which has a significant and unmistakable industrial tradition. Our national zz End markets are increasingly global in experience regarding these areas reinforces nature, and that tools to grow exports, as several ideas: well as strategies that maximize supply chain connections will matter more and 1. Districts similar to NWC (i.e. close-in older more to regions that continue to specialize in industrial areas proximate to downtown) can manufacturing. be found across the country. zz The defined area of influence around 2. Many districts still support industrial activity, the NWC includes more than 3,000 jobs

Executive Summary including modern “advanced manufacturing” in companies across a broad number of activity, which necessitates conversations industry sectors, including manufacturing, about freight movement and truck impacts. distribution, services, and construction. 3. Many districts are seeing pressure for land Data suggests that the majority of people use change; in Chicago, areas zoned for commute into this area daily. (Map on planned industrial use, such as the Clybourn following page). Corridor and the Near West Side (long zz The broader set of infrastructure the traditional home of wholesale food improvements proposed as part of NWC companies) are now in transition. revitalization as well as transit-oriented improvements are likely to improve access These Districts tend to move along one of two through the area of influence and gradually divergent trajectories: encourage land use change. 1. Districts that are clearly in transition toward zz As NWC revitalization unfolds in coming higher value mixed use: CORTEX in St. Louis, years, new companies will consider RiNo in Denver, the Menominee Valley in relocating to sites within the area of Milwaukee, Goose Island in Chicago, and influence. The following section summarizes Scotts Addition in Richmond, VA. sectors that are viewed has being more likely 2. Districts that are expected to remain largely to consider the NWC site and broader area of in industrial use: Examples include the Mt influence. Elliott Corridor in Detroit, and the Park Hill Industrial Corridor in Louisville.

18 City and County of Denver Local Impact global reach

Figure 3. NWC - Economic Area of Influence in the City and County of Denver 1 Executive Summary

Legend Industry ! Accommodation and Food Services ! ! Administrative and Support and Waste Mgmt ! ! ! Arts, Entertainment, and ! Recreation Agriculture, Forestry, Fishing ^_ and Hunting ! ! Construction Heron ! Educational Services ! Finance and Insurance Pond/Heller ! ! ! ! ! Health Care and Social Open Space Assistance ! ! ! Information ! Manufacturing ! ! Other Services (except Public Adams County Administration) ! !! !!Professional, Scientific, and ! ! ! Technical Srvcs ! Northside ! Denver ! ! ! ! ! ! ! Public Administration ! ! ! ! Park ! ! ! Real Estate Rental and Leasing ! !! r ! ! ! ! ! ! ve ! ! ! Retail Trade ! Ri ! d ! ! ! e lv ! ! Transportation and tt ! Warehousing ! ! la ! ! B ! ! ! . P ! ! Unknown ! S ton ! ! h ! ! Wholesale Trade ! ! ! g ! !r!i ! ! ! B I2 Rail Station ! ! ! ! National !N ! ! ! ! !! NWC Area of Influence ! ! ! Western Stock ! ! I2 ! Commuter Rail ! ! ! ! Rail t Show Station !

S (! ! New Road Argo Park ! n ! NWC t o

S t

g! ! ! ! k n i ! (! !!! or h ! ! Y s !!

a

! ! ! N W ! !

N ! ¦¨§70 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

! 38 th S ! E 40th Ave t t t t S S u 38th - Blake ! ke ln 0 ¼ Miles I2 la a Station B W ¯

Source: Colorado Department of Labor

September 2016 19 National Western Center

1 PRIORITY CLUSTERS FOR NWC AECOM took a deeper dive into specific 5-6 digit the total employment in each cluster along the NAICS code level industry sectors focused on Front Range, as well as the number of new jobs traditional agricultural and food-related sectors created between 2009 and 2014. Each identified as well as a broader set of industries which cluster includes a circle that is sized to reflect provide support to agriculture. The analysis the number of Front Range Jobs associated with focused on the 2009 to 2014 period for the State agriculture. For example, in Water, Infrastructure, of Colorado and an area defined as “the Front Energy, Engineering, the Front Range saw the Range”. Employment data from the Colorado addition of 1,260 new jobs between 2009 and Department of Labor was used, and correlated 2014. with patent-based employer listings provided by Colorado State University (CSU). The resulting The below matrix table highlights clusters that dataset included more than 34,000 firms as drove creation of more than 10,000 jobs since

Executive Summary of the third quarter of 2014. AECOM identified 2009. The table includes clusters that appear the following “clusters” of economic activity to be clear elements of an NWC strategy, that have clear potential to anchor future job including: creation at NWC. Each circle provides a sense of

zz Water, Infrastructure, Energy, and related Engineering zz Manufacturing - Beverages zz Manufacturing – Specialty Foods zz Manufacturing – Cattle and Dairy zz Aerospace UAV Mapping – Ag Related zz Cattle, Dairy, Animal Health and Testing

Water, Infrastructure, Energy, and related Engineering

Statewide Avg Hourly Wage $43 Cluster added 17,200 jobs since 2009, 2014 Average State-Wide Location with growth in scientific consulting 1.82 Quotient and oil & gas; the Front Range added 1,260 New Jobs about 1,260 jobs. Opportunities include 2014 Front Range Jobs 7,625 Environmental Consulting Services, Water Supply & Irrigation systems, and associated infrastructure. Annual Rate of Job Growth, 09-14 0.037

Manufacturing - Beverages

Statewide Avg Hourly Wage $21 These processing and manufacturing 2014 Average State-Wide Location sectors are heavily reliant on water; 1.54 Quotient while sectors such as soft drinks, ice, 989 New Jobs and bottled water are mature, sectors 2014 Front Range Jobs 6,949 such as beer, wine, & spirits have grown since 2009. This cluster has added > 900 jobs since 2009 Annual Rate of Job Growth, 09-14 0.031

20 City and County of Denver Local Impact global reach

Manufacturing – Specialty Foods 1 Executive Summary

Statewide Avg Hourly Wage $22 Seven processing & manufacturing 2014 Average State-Wide Location sectors are grouped as a specialty 1.02 Quotient foods cluster. Water is important to the production process. This cluster has 818 New Jobs 2014 Front Range Jobs 3,892 added about 800 jobs since 2009. Includes firms involved in processing of pet food, coffee, confectionaries, and

Annual Rate of Job Growth, 09-14 0.048 snacks.

Manufacturing – Cattle and Dairy

Statewide Avg Hourly Wage $19 Includes cattle and dairy. Slight 2014 Average State-Wide increases in employment. Significant 1.78 Location Quotient connections into animal health, nutrition, and herd management; 9 New Jobs 2014 Front Range Jobs 9,466 sensors, testing, and analytics for product quality and biosafety; and dairy production and dairy product Annual Rate of Job Growth, 09-14 0 manufacturing. Access to water and related infrastructure is important.

Aerospace UAV Mapping – Ag Related

Statewide Avg Hourly Wage $44 This cluster includes firms that produce 2014 Average State-Wide Location drones for agricultural purposes as 2.03 Quotient well as firms involved in surveying 1,000 New and mapping services. The cluster Jobs 2014 Front Range Jobs 3,197 added about 1,000 jobs across the Front Range since 2009. This cluster has connections to software as well as Annual Rate of Job Growth, 09-14 0.083 advanced materials.

Cattle, Dairy, Animal Health and Testing

Statewide Avg Hourly Wage $36 This Front Range cluster saw growth 2014 Average State-Wide of almost 1,800 jobs between 2009 0.99 Location Quotient and 2014. Research and development 1,787 New Jobs related to bio-technology is heavily 2014 Front Range Jobs 20,390 concentrated along the Front Range. Across Colorado, these sectors added Annual Rate of Job Growth, 09-14 0.019 more than 4,000 jobs since 2009.

September 2016 21 National Western Center

The below table also includes sectors for which more research is needed to ascertain industry- 1 to-industry connections, as well as place-based opportunities associated with anticipated future development in the area of influence. As one example, in 2016 CSU undertook research related to the development of nutrient rich “purple potatoes”. Sectors of emerging interest include:

zz Manufacturing - Sensors Instruments zz Manufacturing - Urban Vertical Agricultural Production zz Grain & Oil Seed Processing zz Potato Farming zz Wholesale Food zz Software Development – Ag Related

Executive Summary zz General Office / Professional Services – Ag Related zz Financial Services

Manufacturing - Sensors Instruments

Statewide Avg Hourly Wage $42 This cluster includes companies that 2014 Average State-Wide Location make devices and components that 1.79 170 New Quotient support agriculture related activities (such as lab instruments and sensors). Jobs 2014 Front Range Jobs 1,581 Statewide, this cluster added about 900 jobs, with 170 concentrated in the Annual Rate of Job Growth, 09-14 0.023 Front Range.

Manufacturing - Urban Vertical Agricultural Production

Statewide Avg Hourly Wage $14 Cluster is focused on the emergence 2014 Average State-Wide Location of urban vertical farming (companies 0.89 75 Fewer Quotient such as FarmedHere, for example). Cluster has largely remained static Jobs 2014 Front Range Jobs 2,985 in job creation along the Front Range since 2009. Cluster is relatively Annual Rate of Job Growth, 09-14 -0.005 concentrated along the Front Range.

Grain & Oil Seed Processing

Statewide Avg Hourly Wage $20 Grains processing, and associated 2014 Average State-Wide Location manufacturing are viewed as a 0.92 Quotient strategic sector for the state. These sectors added 1,140 jobs along 1,140 New Jobs 2014 Front Range Jobs 5,464 the Front Range. This cluster has important connections into beverage manufacturing, as well as pet food Annual Rate of Job Growth, 09-14 0.048 production. “Growth opportunity”

22 City and County of Denver Local Impact global reach

Potato Farming 1 Executive Summary

Statewide Avg Hourly Wage $13 While Potato Farming is not 2014 Average State-Wide Location concentrated along the Front Range, 3.7 Quotient the sector is highly concentrated in 22 New the State of Colorado (LQ>3.0). The Jobs 2014 Front Range Jobs 74 primary of further study is whether there are in-state opportunities to add value to raw potatoes that are being Annual Rate of Job Growth, 09-14 0.073 grown in state.

Wholesale Food

Statewide Avg Hourly Wage $26 The wholesale cluster added 2,475 jobs between 2009 and 2014 2014 Average State-Wide 1 along the Front Range. Wholesale Location Quotient opportunities need to be viewed in context with logistics and distribution 2,475 New Jobs 2014 Front Range Jobs 16,277 strategies that align with export markets. Food related wholesale is seen as an opportunity for the area Annual Rate of Job Growth, 09-14 0.034 of influence. IT connections are also

important

Software Development – Ag Related

Statewide Avg Hourly Wage $52 A major employer for Colorado, with 2014 Average State-Wide Location attractive location quotients. Software 1.8 Quotient is highly important in advanced 250 New technology, with particular impact on Jobs 2014 Front Range Jobs 496 aerospace (drones) and manufacturing. For the Front Range, the above data likely under-estimates the number of Annual Rate of Job Growth, 09-14 0.148 agriculture-related software firms.

General Office / Professional Services – Ag Related

Statewide Avg Hourly Wage $36 This cluster includes several “general 2014 Average State-Wide Location office” activities commonly associated 1.41 Quotient with regional HQ, financial services and legal. For Front Range ag-related, 2014 Front Range Jobs 3,099 employment increased by more 670 New Jobs than 600. NAICS 551114: Corporate, Subsidiary, & Regional Managing Offices includes companies which may Annual Rate of Job Growth, 09-14 0.05 be conducting research and testing; more research is needed

September 2016 23 National Western Center

Financial Services 1

Statewide Avg Hourly Wage $40 This cluster includes financial firms 2014 Average State-Wide Location that provide services to the farming 1.32 Quotient and agriculture sectors along the 100 New Front Range. The Front Range job Jobs 2014 Front Range Jobs 609 estimates under-represent the number of ag-related jobs, as many banks provide loans to farmers. More Annual Rate of Job Growth, 09-14 0.037 research in this cluster is needed.

Executive Summary NEXT STEPS

Findings 5. Defined and measured key industry clusters across the Front Range that likely will The study has resulted in an improved drive economic sustainability, business understanding of the economic opportunities development, and employment opportunities. related to the National Western Center 6. Emphasized innovation and commercializing redevelopment and adjacent area development, research will lead to commercial successes including: (i.e. expanded opportunities in existing 1. Reaffirmed the economic significance of an and new end markets), which takes a step emerging agriculture innovation economy beyond scientific and applied research in across the Front Range. labs leading to new products, services and business success. 2. Focused on the catalytic role of the NWC in context with the Agriculture Innovation 7. Framed the scale of opportunity, mix of Triangle, to serve as a place-based business and innovation opportunities, which innovation anchor to accelerate Front Range influences types and timing of development economic development and job creation, with and supportive programs. Specifically, the emerging focus on food, water and animal / NWC-led agri/innovation economy could human health innovation sectors. lead to roughly 1 - 3 million square feet of lab, office and flex space for the homes of 3. Identified the critical role and importance hundreds of companies and joint ventures, of anchors, such as CSU and Denver Water, and thus thousands of jobs. as institutional anchors for the development projects and ensuring related economic 8. The broader area of influence around NWC opportunities. includes a significant number of companies that support more than 3,000 jobs. The 4. Recognized the National Western Stock analysis reinforces the need to further clarify Show’s role as critical link to both to NWC’s the types of business opportunities that are agricultural roots and future economic likely to emerge at the NWC and across the opportunities, from cattle markets to area of influence in coming years. environmental sustainable agriculture and livestock production. NWSS plays an important connecting role in all facets of the NWC, entertainment, education, research and economic opportunities.

24 City and County of Denver Local Impact global reach

The concluding finding is that the NWC and the 1. ENGAGE: Active engagement with current 1 Agriculture Innovation Triangle must be a critical and future stakeholders and partner, including Executive Summary partner for the economic success of Denver, the elected and appointed officials, institutional metro area, and Colorado, and serve in at least anchors, neighborhood residents and four focused efforts: organizations, business leaders (local and in identified clusters), and education leaders. zz Agricultural and sustainable resource a. Hold an Agriculture Forum (Fall 2016), literacy and awareness, as the place featuring the business and agriculture where rural and urban Colorado connect changes and opportunities, briefing and to the world and the future – and serving a release of this report, and a discussion as a formal and informal place where the on economic/business opportunities and exploration of an idea, our history, or our challenges. connection to the world occurs in a living classroom. b. Continue engaging and communicating with neighborhood residents and zz Entertaining and convening the best of stakeholder groups. Colorado and the American West, from the NWSS to new events that brings the best c. Brief partner and industry business of the world to our community and allows organizations to discuss business and Colorado to show, demonstrate, share and contracting opportunities. promote products, skill and prowess, and d. Leverage and advance opportunities for ideas to the world. Denver Water and other water-oriented zz Research, from the lab to the “dining room partners at NWC. table”, focused on developing products, e. Convene educational partners and tools, and technologies to meet the food and global university research networks to resources challenges facing our nation and begin developing the future workforce the world. training and education opportunities zz Innovation and Business, along with public- and promote local residents access. private ventures, are delivering innovative f. Inform and convene business technical products, services, technologies, and assistance providers, financing and practices – created through the linkage of other business services partners and science, technology, and agriculture and organization to coordinate and provide resource practice and knowledge – to meet business services to Globeville Elyria- food and resource demands of the world. Swansea (GES) firms.

2. ANALYSIS: This study explored global, Next Steps national, state and local economic and demographic data to frame the economic The NWC NextGen Agribusiness Economic situation and opportunity, investigate current Development Study has evolved and advanced business activity, and identify economic our understanding of partnerships with the clusters where apparent comparative private sector, as well as community and advantages exist for NWC, the Agriculture institutional partners. The study builds a Innovation Triangle, and Colorado. foundation for an economic strategy and Additionally, the study focused on best business development work program, which practice NWC-type innovation district together will enable the realization of economic developments to analyze factors influence opportunity for NWC, the adjacent area of their success. The next steps call for an influence, and the Agriculture Innovation Triangle advancing of this analysis, both a continuous in Colorado. The following provides a roadmap, updating to ensure data-driven information and some of the specific next steps for building for decision choices and digging deeper into on this foundation, through four linked elements: the data for specific actionable strategies active engagement, advanced analysis, strategy and steps. Recommended advanced analysis development, and foundational implementation. includes:

September 2016 25 National Western Center

a. Update agriculture-related patent data 1 (matching the strong research completed Providing the opportunity for by CSU) for local companies to support identification of priority companies that can serendipitous collisions on-site support ag-related innovation at NWC. is necessary to encourage b. Continuously update firm data analysis, innovation and economic at the national and local level, to monitor market changes and identify gaps development. and opportunities for business cluster prioritization. Additionally, expand the outcomes data to provide information for Strategies determining attraction and growth targets. Create a comprehensive economic development c. Link firm data from public and private strategy, with a specific focus, leading to growing

Executive Summary sources, like CSU’s patent data, Denver tax an innovative, globally-focused business area. data, and other economic data, to confirm This strategy builds on the economic cluster market leading firms and clusters. findings, and sets a plan for growing, starting, d. Evaluate industry output per worker trends and attracting firms that would strategically or employment / output multipliers for benefit from locating in or working with agriculture-linked sectors in comparison businesses, researchers, and stakeholders within with the broader economy. the envisioned NWC campus. e. Update information and analysis regarding a. Update trends in global agriculture that will regional venture capital as well as influence demand for Colorado products in university R&D spending, with emphasis on existing and emerging end-markets. ag-related sectors. b. Complete interviews with companies f. Monitor business and cluster performance in specific NWC economic clusters to and characteristic information to better understand specific dynamics and sector understand location and business linkages/needs, as well as evolving requirements to ensure the NWC and the workforce requirements, both short- and Agriculture Innovation Triangle are focused long-term. on providing lab, office and flex space and c. Identify connections and systems which will program support desired by the targeted enable serendipitous collisions between firms. businesses, researchers and thought leaders g. Maintain information of foreign direct causing an environment of innovation and investments and export activity, in cross cluster opportunities or solutions, partnership with other global economic d. Assess the extent of and capacity within development efforts, with an emphasis the supply chain in Colorado and the Front on national and local activity in products, Range for manufacturing, to understand services and technology related to source markets for raw materials, B2B agriculture production and resource products and services, and commodity sustainability. flows, as well as local global end markets h. Regarding the area of influence, conduct for finished goods. additional infrastructure and land use e. Understand the existing and evolving assessments to better frame re-use and economic development strategies for revitalization opportunities, consistent with key areas in the Agriculture Innovation neighborhood plans. Triangle. Identify shared strategy elements, opportunities to collaborate, and mutual reliance in specialization across these local and regional strategies.

26 City and County of Denver Local Impact global reach

f. Create workforce and business development e. Build on the existing workforce data to 1 programs that both link with the broader better link neighborhood residents with job Executive Summary strategy and explicitly drive job creation. training, and connect firms with capable employees. Implementation f. Actively recruit and grow existing firms in agriculture-related sectors to Denver, A business development program that aligns with a goal of locating or relocating these public and private resources should be initiated. firms (at the appropriate time) in the NWC Denver OED’s city-wide economic development influenced area. strategy and the JumpStart work plan identify a g. Host partner organizations and programs number of initiatives that are critical for achieving to provide technical business assistance the NWC economic and business success, these in the co-working laboratory and flex initiatives include, but are not limited to: space building – serving building and area businesses. a. Development of a building with laboratory in the NWC influence area, for the purpose h. Continue collaborative partnership of locating and growing cluster-identified development work between Denver Water firms into the area to begin building the and CSU at NWC. business cultural connections and provide i. Develop a 10-year job training plan that a location where the scientific and applied links with agribusiness opportunities. research can be commercialized and Possible workstreams include: created into business enterprises. 1. Focus on Science, Technology, b. Further strengthen global business Engineering, and Math (STEM) connections through Foreign Direct programs at the K-12 educational Investment (FDI) and export development levels. activities (building on City and State 2. Increase deliberate linkages between resources) to identify and foster export companies, schools, and workforce ready companies, linking them with global intermediaries. market opportunities. 3. Align training priorities with end market c. Establish an NWC Innovation Investment industries that have growth prospects. Fund to support growth of agribusiness opportunities that align with identified priority sectors. Federal agencies such as the U.S. Department of Commerce, Economic Development Administration should be pursued for funding. d. Identify potential neighborhood businesses with potential interest and capacity (existing or to be developed) for prime or sub-contracting projects related to the infrastructure, public and/or private building construction, or other needed services and products,

September 2016 27

Global Trends 2 and Local Impacts National Western Center

2 INTRODUCTION & CORE FINDINGS AECOM identified core national and global zz Modern agricultural production is closely trends in agriculture that will likely shape and linked to transportation costs, labor, influence the future economic development regulatory factors, and access to energy. trajectory for NWC. The analysis identified the Interviews point to expectations that following emerging points: agricultural processing will move closer to end markets and gateway metropolitan areas. zz Global Agricultural markets have been under zz A minority of US farms tend to generate the structural strain, in part due to growth in majority of agricultural production, and farms global population and development, climate are increasingly corporate owned rather than instability (access to water), and a steady run by sole proprietors. gradual decrease in the amount of arable agricultural land. Economic and cyclical zz In 2014, Colorado agriculture employment factors have been significant, linked with (excluding sole proprietors) ranked 25th in the decreasing commodity prices and a strong US with a location quotient of 0.69 (representing US Dollar relative to other world currencies. 14,900 jobs), pointing to an employment level While headwinds have been offset to an in “traditional” agricultural production that is extent by lower input costs (fuel in particular), “under-sized” relative to national averages. In lower commodity prices have encouraged 2009, agriculture employed about 13,737 people considerable consolidation in agriculture- with a location quotient of 0.7; while about 1,200 related and food production companies. jobs were added, the underlying growth rate of 1.7% did not keep pace with the broader rate zz Global Market Factors include the of statewide job creation over the same period. emergence of a global middle class is Key sectors include:

Global Trends and Local Impacts Global Trends and Local Impacts driving demand for higher value food, as well as concern over food availability and −− Statewide strengths in “traditional” affordability. Growth of a global middle class agriculture include cattle and dairy is a key factor for Colorado agriculture, and production as well as meat processing, a focus of emerging conversations about wheat, potato production and other economic development strategies that boost specialty crops. the capacity of local firms to export. −− Front Range manufacturing strength in food zz North American Factors focus on shifting production, including breweries, distilleries, consumer tastes, linked with broader debate and specialty foods manufacturing. about food safety, food quality, & health, which −− Agriculture-related sectors that connect are pressuring traditional producers to pivot with the plant and life sciences include toward healthier ingredients. One example is companies that would not be traditionally Azodicarbonamide, which is commonly used be seen as connected to agriculture, as a dough conditioner, but also has been including veterinary services, research reportedly used in yoga mats, according to and development in biotechnology, and Bloomberg. Under pressure, companies such water-related technology. as Subway, McDonalds, Wendy’s and White −− Looking more broadly at all farms (including Castle all removed this ingredient in 2014. family-owned), based on the 2012 US Census zz U.S. Regulatory Factors are anchored by of Agriculture, the average Colorado farm the 2011 Food Safety Modernization Act (881 acres) is larger than US average (434 (FSMA) which gives the Food and Drug acres). The average age of a Colorado Administration (FDA) a legislative mandate farmer (58.9) is slightly older than US to require science-based preventive controls averages (58.3). Roughly 80% are family across the food supply, more rigorous owned, representing about 56% of statewide inspection and compliance measures, acres in farms. Partnerships and corporations greater oversight over imported food, and account for the remaining 16%, representing greater authority to recall food products. about 38% of statewide acres in farms.

30 City and County of Denver Local Impact global reach 2

GLOBAL AGRICULTURAL OUTLOOK Global Trends and Local Impacts The following narrative frames current Proteins expectations for outlooks for agricultural related sectors of the global and US economies. The In the short run, the outlook for American narrative below is linked with a following producers of agricultural proteins is positive summary matrix. according to the USDA, as incomes rise around the world increasing the demand for their products, as well as low input costs associated Grains and Oilseeds with producing animal proteins (fuel costs for example). Globally, many developing countries In the short run, the outlook for American have not yet developed strong ranching producers of grains and oilseeds is slightly industries, and as a result the short run outlook negative as a result of a bountiful harvest in for global producers remains slightly worse than Brazil according to the Rio Times. The result of American producers. In the long run, pressure this is a short run decrease in grain and oilseed to innovate in the agricultural protein industry, prices. Mergers and Acquisitions of large seed as well as an increase in domestic output in companies (for example, Monsanto) are also developing nations will provide a positive outlook a cause for concern in the short run due to the for agricultural protein producers, and American influence these seed conglomerates will have protein producers will reap these benefits as well on the input costs of these goods. In the long run, the outlook for grains and oilseeds remains positive for both American as well as global Produce producers of grains and oilseeds. This is primarily driven by the anticipated increases in demand The outlook for produce producers in the United for livestock products (associated with increases States in the short run is similar to that of protein in global income as the USDA reports) as well as producers: positive due to increases in global research on heat resistant crops. International wealth and a lack of serious foreign competition. organizations, such as the International Center According to the USDA, as a result of increases for Tropical Agriculture, are placing increased in income in developing nations, the demand for importance on drought tolerant crops in order to fresh produce is expected to increase, which will boost domestic production in geographic regions benefit American producers of produce goods prone to drought (Sub-Saharan Africa is the who are already established in cultivating these largest of these). Such innovations will benefit crops. Global producers of produce are not global producers in geographic regions which anticipated to be in a position to capitalize on have warmer climates. these trends in the short run, primarily because foreign produce producers are not as well established as American producers, and the development of these industries will take time. In the long run, the outlook for both American and global producers of produce is anticipated to be positive, with trends toward healthier eating, as well as the influence of increased global wealth driving demand for produce goods.

September 2016 31 National Western Center

Figure 4. Summary of Global Agricultural Trends 2 AG Outlook Short-Run Long-Run Competition-good crop Increases in livestock Grains and in Brazil. End of peak demand globally and Oilseeds price cycle. M & A in research on drought seed companies resistant crops Aquaculture R & D. Lower input costs. Global domestic Proteins Increase in size of the production is being global middle class encouraged. Lack of foreign Rises in competition and income=increases Produce trends to eat healthier. in demand for fresh Fragmented production= produce. Healthier diets local opportunities The demand for feeds Feed R& D is expected is derived from the Feeds to benefit feed increase in livestock producers in the future consumption globally.

Lower energy prices Specialists encourage Fertilizer have boosted interest in fertilizer in developing US fertilizer production nations Global Trends and Local Impacts Global Trends and Local Impacts Public good nature of Innovation in filtration Water water will limit business technology investment

USA service levels Market need in Africa & approach Europe. Certifications Asia. Potential is hurt by Companies close eyes human capital limits

United States World in developing countries United States World

Feeds lower energy prices have increased interest in American feeds, and as a result of this lowered The outlook for feeds in both the short run and cost, American producers are expected to gain long run is positive for American producers as a competitive edge on foreign competitors. The well as global producers. This outlook is based outlook for both American and global producers off of the anticipated increase in livestock of fertilizer is positive, as many developing demand, which will by extension increase the use nations are expected to increase their use of of feeds for production. Additionally, innovation fertilizer. According to the Scientific American, into efficient feed and supplement production, as global population increases, increasing the as well as increases in yields is also expected to yield of farms is a target for many nations, and benefit producers of feed in the future. scientists have proposed that the introduction of fertilizer into the farming practices of these nations is the easiest way to get the largest Fertilizer increase in crop yield. The pressures of The outlook for American producers of fertilizer population growth will benefit these producers in is expected to be positive in the short run, while the coming years. the outlook for global producers of feed is neither positive nor negative. In the short run,

32 City and County of Denver Local Impact global reach

Water reports that in the long run, the scarcity of water 2 is expected to potentially limit the abilities of Global Trends and Local Impacts The outlook for producers of water in the short global producers in water scarce regions to run is positive, both in the United States and compete with those in water rich areas. As a globally. Improvements in filtration technology result, companies that require water as an input are expected to benefit these firms in providing in the relatively water rich United States can water to farmlands, and the short run impact expect to benefit from their geographic position, of irrigation development is also expected to in addition to global producers who are able to indirectly benefit these producers. The UN access water cost-effectively.

GLOBAL MARKET FACTORS

Land and Water Scarcity qualities of scarce economic resources. There is some concern that as the population of Earth AECOM reviewed data from the World Bank and continues to rise, and approaches almost 10 the Global Policy Forum to help frame aggregate billion people by 2050, the pressures on land influences on land and water availability. Key and water will increase, hurting the availability insights build from acknowledgment that land and quality of food globally. and water are both resources which possess the

Figure 5. Agricultural Land (% of land area)

55% United States

50% Sub-Saharan Africa (all income levels)

Middle East & North 45% Africa (all income levels) Latin America & Caribbean (all 40% income levels) Europe & Central Asia (all income levels)

Agricultural Land (%) 35% East Asia & Pacific (all income levels)

30% World

25%

Source: World Bank

The chart above illustrates World Bank data on the coupled with the scarcity of water, the result is a percentage of total land that is used for agricultural potentially disconcerting future for many nations, purposes in primary geographic locations. The and has been a catalyst contributing to political total amount of global land used for agricultural instability in various parts of the world. purposes is shrinking as a percentage of total land, even as global population is increasing. When

September 2016 33 National Western Center

Several nations who lack arable land or water Agricultural Imports by Country 2 security have gone so far as to utilize arable land in foreign nations to produce agricultural AECOM reviewed data from the World Health products. For instance, The Earth Policy Institute Organization, World Trade Organization, and reports that China attempted to lease over 1 Australian Bureau of Agricultural Resources million hectares of land in the Philippines for Economics and Sciences regarding agricultural agricultural purposes. When the citizens of the imports and implications for the global middle Philippines, most notably the farming community, class, which is leading to increases in demand discovered that their government was planning for higher value agricultural products: meat, dairy to enter into this agreement, public resistance products, and fresh produce. According to the prevented the government of the Philippines from World Health Organization (WHO), per capita entering the agreement. China has successfully consumption of meat is expected to increase acquired arable lands in nations such as the globally to a value of 45.3 kilograms, up from Democratic Republic of the Congo for agricultural 36.4 kilograms in 1997. The WHO states that, purposes. Other nations with similar ecological “There is a strong positive relationship between limitations are attempting to perform similar land the level of income and the consumption of acquisitions, such as South Korea and Qatar. animal protein, with the consumption of meat, milk and eggs increasing at the expense of staple foods”. As a direct result of increases in income in developing nations, demand for animal products is expected to increase.

Figure 6. Agricultural Imports by Country

$180,000,000,000 Global Trends and Local Impacts Global Trends and Local Impacts $160,000,000,000 Brazil

$140,000,000,000 China $120,000,000,000 India $100,000,000,000 Kenya $80,000,000,000 Mexico $60,000,000,000 Nigeria

Agricultural Imports ($) $40,000,000,000 Russia

$20,000,000,000 United States $0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: World Trade Organization To illustrate how an increase national income While a share of the anticipated increase in leads to a greater consumption of high Chinese agricultural demand will be supplied by value agricultural products, The World Trade increased domestic production, industry leaders, Organization reports that agricultural imports such as James Rice, the former China head into China have increased from a value of Tyson Foods, stated that China will have to of $45,189,000,000 in 2000, to a value of rely on imports, which bodes well for exporters $170,083,000,000, an annual growth rate of 15.9% of agricultural products. As the global middle each year. Additionally, The Australian Bureau of class increases in size, the global agricultural Agricultural Resources Economics and Sciences market can expect to see increases in demand estimated in their 2014 report on Chinese food for animal proteins and fresh produce, and some preferences that the real consumption of beef potential decreases in the demand for staple in the country is expected to rise 236% between crops. 2009 and 2050, along with dairy consumption increases of 74% over the same time period.

34 City and County of Denver Local Impact global reach 2

NORTH AMERICAN FACTORS Global Trends and Local Impacts

U.S. Consumer Tastes and Preferences direct result of the wholesalers pushing for healthier foodstuffs, agricultural firms who adapt to the According to data provided by the US Department requests of the wholesalers will gain access to this of Agriculture, as well as private sources such new market based on connections to wholesalers. as Forbes and Nielsen, US consumers are in the midst of a significant shift in consumer tastes and preferences with regard to foodstuffs. To illustrate GMO (Genetically Modified Organism) these findings, The U.S. Department of Agriculture Agriculture Influences (USDA) reported in 2014 that American consumers had placed a greater level of importance on There has been considerable debate in the nutrition when purchasing food than previous United States revolving around the use of GMOs, years, while the influence of price on the purchase and whether they are a benefit or danger to the decisions remained constant. In general, American consumer, and how companies and governments consumers are placing an increased importance should handle their use moving forward. on nutrition, health and food quality. The impact Sources such as Forbes report that organizations of these trends is influencing producers to utilize have begun to influence public opinion on the healthier ingredients in their products to capitalize role that GMO foods should play in the food on this growing trend. The agriculture sector can market. One group which opposes GMO usage is benefit from these trends by positioning itself as a Greenpeace, who asserts that GMO food is bad bastion of healthy and clean food. because it is unnatural and because it will open According to Forbes, global sales of healthy foods the door to a large degree of consolidation in the are increasing, and large numbers of companies agribusiness industry. Similar arguments appear are positioning themselves to supply this expanding to have convinced a majority of the American market. For instance, General Mills invested public (89% according to a Mellman Group poll substantially in the development of gluten-free according to the Center for Food Safety) that products, and rolled out gluten free versions of some GMO foods should be labeled specifically as of their more popular products, such as Cheerios. GMO. Only 6% of poll respondents opposed compulsory labeling of GMO products. This trend will impact the agricultural sector in numerous ways. The 2015 Nielsen Global Health Significantly, other organizations have come out and Wellness Survey found that 88% of poll in support of GMO. In June of 2016, a group of respondents were willing to pay more for healthier 110 Nobel Laureates released a letter criticizing food. Although they found that financial worries Greenpeace for its opposition to GM farming remained important to consumers just as the USDA practices, arguing that the objective scientific did, the fact that consumers would be willing to findings of GMO products should not cause any support these nutritional trends with higher levels of fear amongst consumers. The scientists argued spending indicates that these trends could benefit that GMOs have the potential to help combat the agricultural industry. Higher spending on nutrient deficiency, increase yields, and are most healthy agricultural products translates to higher of all just as safe as non-modified products. valued output being produced on the same plot of land with some potential modifications. The apparent gap between Another way in which the agricultural sector can scientific research and public benefit from these trends is by positioning itself to aid wholesalers in their quest to capture the perceptions is an important nutritional market. For example, USA Today reports issue, one that NWC can that Walmart and Whole Foods have put pressure on their producers to simplify their ingredients potentially shape in the future and use natural products in place of artificial and synthetic alternatives whenever possible. As a through education.

September 2016 35 National Western Center

U.S. Regulatory Factors University, issued a number of grievances with 2 the law in 2015. These grievances revolved In 2011, the Food Safety Modernization Act (FSMA) around the economic costs associated with the was signed into law, with the clear intent of plan exceeding the future anticipated benefits. overhauling existing food safety practices, with a For instance, the FSMA has placed intensive focus on prevention and containment of food-borne regulation upon animal food producing facilities illness. This act requires farmers who produce (pet food and farm animal food). At the same more than $500,000 in revenue as well as food time, only pet food contact has definitively distributors to audit their own production practices proven hazardous to humans in the past. and identify any problems internally with food Therefore regulating farm animal food producing safety. The act also requires imported foodstuffs to facilities in the same intensive way as pet food meet the standards of domestically produced food. producing facilities is more costly to both the As a result, this law will have short run impacts firms and the government, without producing any upon the firms included in the scope of the law, substantial increase in benefits. and can have an enormous long run impact on the agricultural sector in the United States. In addition to the increased regulations for domestic producers, the FSMA also contains Short-term effects of the FSMA are that food serious implications for importers of foodstuffs producers are now required to develop anti- into the United States. The new standard for contamination procedures and then audit the imported foods requires that foreign producer procedures and test their effectiveness. This is a who wish to export to the United States ensure major change from the previous arrangement, in that their products would meet the standards which a government inspector would audit and of the FSMA if they were located in the United test the effectiveness of such procedures. This States. Should these criteria not be met, the mandate from the federal government will alter foreign goods will not be allowed to enter into Global Trends and Local Impacts Global Trends and Local Impacts day to day operations of food producing firms who U.S. domestic markets. This is expected to have do not already have strong procedures in place impacts on the entire supply chains of firms who in case of an outbreak. If firms already have such utilize foreign foodstuffs. procedures in place, then some regulators believe that the new regulations will not be significantly burdensome on the firms. Additionally, the U.S. Agricultural Production regulators who champion the law believe that At a policy level, looking at US production over consumer confidence in food safety due to more the past 25 years, it is clear that agricultural rigorous inspection down the supply chain. productivity has increased dramatically in Other individuals have derived potential impacts the United States even as employment in the from the law which are more harmful to the agricultural sector has decreased. Innovations in sectors being affected by the regulation. For agricultural research and development as well instance, Richard Williams, the director of the as increases in human capital have contributed Regulatory Studies Program at George Mason largely to this trend in American agriculture.

Figure 7. North American Farm Output per Worker

$80,000 $70,000 $60,000 $50,000 $40,000 US $30,000 Canada $20,000 $10,000 Output per Worker ($) $0 1990 1995 2000 2005 2010 2013

Source: US Department of Agriculture (USDA)

36 City and County of Denver Local Impact global reach

Figure 8. US Agricultural Productivity 2 Global Trends and Local Impacts

Total Output Total Farm Input Total Labor Input Total Capital Input 1950 101,105 262,664 231,318 70,569 1960 125,908 272,248 155,145 73,428 1970 141,703 268,635 109,072 75,140 1980 178,121 309,459 96,848 79,462 1990 208,267 257,250 75,187 63,812 2000 251,542 268,550 68,290 59,884 2010 267,351 258,567 58,261 58,773 2013 283,371 265,911 58,330 60,193 CAGR 50-13 1.6% 0.0% -2.2% -0.3%

Source: USDA

The table above depicts U.S. agricultural inputs U.S. Agriculture Market into production and subsequent outputs reported by the USDA. As noted above, agricultural output The current makeup of the U.S. agricultural in the United States has increased substantially sector puts it in a unique position to benefit from since 1950, growing at an annual rate of 1.6%. current trends in the agricultural market. The Total inputs into agriculture have effectively U.S. agricultural market is made up of two types remained static throughout the same time of farms: family farms and non-family farms. period. Inputs of labor, as well as capital, have The USDA states that family farms total 97.6% decreased over the same time period, with labor of farms and are responsible for 85% of total inputs in the agricultural sector decreasing at farm output. The second type of farm defined a relatively rapid rate of 2.2% per year since the USDA is a non-family farm, which make up 1950. These findings imply that the quality of only 2.4% of total farms but produce 15% of total American labor and capital is the primary driver output. Of non-family farms, half are very small of growth in agricultural outputs in the United and have less than $35,000 in sales. Most of the States. This is also evidenced by analyzing the output from non-family farms comes from the 10% output per worker in the agricultural sector for of non-family farms which have annual sales of North America. In 1990, Canadian farm output at least $1 million. Together, these firms produced per worker was approximately $17,234 higher $42 billion, totaling 93% of total non-family farm than its American counterpart. In 2013, American output in 2011. Of the largest 10% of large non- farm output per worker had eclipsed Canadian family farms, corporate owned farms generated farm output per worker, and stood approximately $20.15 billion in 2011 according to the USDA, $1,368 higher than Canadian farm output per with the remaining $21.65 billion coming from a worker. Agricultural productivity is increasing in combination of sole proprietorships, partnerships, the United States, and based off the historical and estates. trends, fewer numbers farmers will be able to generate larger amounts of total output as Currently, agricultural production remains time moves forward. This point has obvious relatively fragmented in the United States, with implications for NWC, specifically its potential many small producers providing a majority ability to serve as a connection point or interface of production. However, large agribusiness between people and where their food is grown. firms such as Monsanto have indicated that consolidation is the way of the future in agriculture. Bloomberg reported in October of 2015 that Monsanto will continue to seek out

September 2016 37 National Western Center

companies to acquire in order to expand its would promote sustainability. The position of 2 presence in the agriculture sector. At that time, the FAO is that with proper support, family farms Monsanto was the largest supplier of seeds have the proper mindset to support the world’s in the world, and wished to double its 2014 increasing population. According to the FAO, earnings by 2019. Published reports suggest family farms demonstrate a sincere concern for that Monsanto believes that consolidation in the preservation of natural resources, and family the agricultural sector will eliminate duplicate farms have a highly diverse set of agricultural research and development between competing activities. firms, and allow for cost savings and more focused innovation. If such consolidation were As shown on the following map, while to occur, the structure of the agriculture market, agricultural products are highly concentrated both globally and domestically, could see throughout the United States, the Mid-Atlantic, additional changes in the future. the Southeast, the Great Lakes, the Interior West, and California contain the highest concentrations Despite calls for consolidation from firms of high valued agricultural products. The areas such as Monsanto, local and family farming surrounding Colorado include states with minimal is being encouraged by the UN’s Food and arable land to the South and West (Utah and Agriculture Organization (FAO), according to New Mexico), states with some arable land to The Guardian. In 2014, director general of the the North (Wyoming and Western Nebraska) and FAO, José Graziano da Silva, stated that family states with more arable land than Colorado to farms had the potential to sustain the world, the East (Kansas). and declared that encouraging family farms

Figure 9. North American Factors- Market Value of Agricultural Products, 2012 Global Trends and Local Impacts Global Trends and Local Impacts

1 Dot = $30,000,000

0 100 Miles

Source: USDA

38 City and County of Denver Local Impact global reach 2

COLORADO AGRICULTURAL DATA Global Trends and Local Impacts The following tables summarize employment of total covered employment, statewide, ranking data for agriculture related sectors for excluding sole proprietorships which are the State of Colorado relative to other U.S. States. significant in farming. The following tables include calculated location zz In “traditional” agriculture, seven out of quotients. A location quotient is a ratio that allows 16 sectors saw their location quotients an area’s sector employment distribution to be decrease between 2009 and 2014. The compared to that of a larger area typically the largest decreases were found in hog farming, state or nation as a whole. Metropolitan areas vegetable farming, and greenhouse and that support ratios for specific sectors that are nursery production. Of note, while each of greater than 1.0 are said to have a greater local these sectors generated a 2009 location share of employment in a given sector compared quotient > 1.0 in 2009, in 2014, only hog to the national average. The analysis uses farming was able to sustain a 2014 location the “Compound Annual Growth Rate (CAGR)” quotient >1.0; decreases in location quotients approach in calculating percent change to reflect may be significant in speaking to changes an annualized rate of change, as opposed to a in specific sectors, or may simply reflect on simple percent change calculation. slower economic growth relative to the rest of the economy. In 2014, Colorado agriculture employment ranked 25th in the US with a location quotient zz Agriculture-linked food & beverage of 0.69 (representing 14,900 jobs), pointing to manufacturing supported an additional an employment level in “traditional” agricultural 27,100 jobs statewide in 2014 in sectors production that is “under-sized” relative to ranging from beverage production to dairy national averages. In 2009, agriculture employed and bakery production. Between 2009 and about 13,737 people with a location quotient 2014, food processing added about 3,300 of 0.7; while about 1,200 jobs were added, the jobs, at an annualized growth rate of 2.6%, underlying growth rate of 1.7% did not keep pace faster than the statewide rate of job creation. with the broader rate of statewide job creation zz Reflective of growth in employment, higher over the same period. For context: profile food & beverage manufacturing sectors saw their location quotients increase between z California ranked 4th in statewide z 2009 and 2014. For example, sugar and agricultural employment (415,444 jobs / confectionary product mfg. increased from location quotient of 2.92). 0.98 to 1.26, while animal food manufacturing zz Between 2009 and 2014 Colorado saw an increased from 1.02 to 1.12. Dairy products and increase from 2.2 million jobs to 2.4 million bakeries saw their location quotients increase jobs, representing annual growth of 1.9%. from 0.84 and 0.8 respectively), approaching Agriculture (NAICS 11) represents about 0.6% the 1.0 threshold in 2014.

Figure 10. Top 25 States in Agriculture (NAICS 11) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Idaho 23,464 4.03 1,169 5.0% 1.0% -0.3% 2 Washington 99,666 3.63 10,009 10.0% 2.1% 0.4% 3 Oregon 49,375 3.17 4,546 9.2% 2.0% 0.2% 4 California 415,444 2.92 41,841 10.1% 2.1% 0.3% 5 Nebraska 13,680 1.6 2,142 15.7% 3.5% 2.1% 6 New Mexico 11,208 1.56 516 4.6% 0.9% 0.5% 7 Iowa 19,102 1.4 3,422 17.9% 4.0% 2.8%

September 2016 39 National Western Center

Employment Employment 2 Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 8 South Dakota 5,075 1.37 1,142 22.5% 5.2% 3.7% 9 Mississippi 13,108 1.32 227 1.7% 0.3% -0.3% 10 Montana 5,013 1.26 778 15.5% 3.4% 2.2% 11 Arkansas 12,880 1.23 271 2.1% 0.4% -0.3% 12 Florida 77,896 1.11 -10,713 -13.8% -2.5% -4.4% 13 Hawaii 6,278 1.11 -160 -2.5% -0.5% -1.9% 14 Vermont 3,035 1.11 522 17.2% 3.8% 2.7% 15 Arizona 24,845 1.09 1,047 4.2% 0.9% -0.5% 16 North Dakota 4,364 1.09 949 21.7% 5.0% -0.2% 17 Wisconsin 25,312 1.02 3,846 15.2% 3.4% 2.3% 18 Wyoming 2,577 1.01 201 7.8% 1.6% 0.8% 19 Kansas 11,548 0.94 1,805 15.6% 3.5% 2.5% 20 Minnesota 20,436 0.83 2,493 12.2% 2.6% 1.0% 21 Michigan 30,122 0.82 3,744 12.4% 2.7% 0.7% 22 North Carolina 28,864 0.79 -72 -0.2% 0.0% -1.5% 23 Oklahoma 10,251 0.72 -111 -1.1% -0.2% -1.6% 24 Alabama 11,742 0.7 -151 -1.3% -0.3% -0.8% Global Trends and Local Impacts Global Trends and Local Impacts 25 Colorado 14,935 0.69 1,200 8.0% 1.7% -0.3%

Source: US Department of Commerce, Bureau of Labor Statistics

Figure 11. Top 25 States in Crop Production Employment (NAICS 111) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Washington 66,380 5.35 5,869 9.7% 1.9% 0.7% 2 Oregon 26,635 3.78 489 1.9% 0.4% -0.8% 3 Idaho 8,529 3.24 507 6.3% 1.2% 0.5% 4 California 175,127 2.72 5,086 3.0% 0.6% -0.6% 5 Hawaii 4,947 1.94 -243 -4.7% -1.0% -1.8% 6 North Dakota 2,959 1.63 853 40.5% 7.0% 2.2% 7 Florida 49,325 1.56 -998 -2.0% -0.4% -1.7% 8 Nebraska 4,213 1.09 1,350 47.2% 8.0% 7.2% 9 Michigan 16,755 1 454 2.8% 0.6% -1.0% 10 Mississippi 4,370 0.97 142 3.4% 0.7% 0.4% 11 Arkansas 4,498 0.95 780 21.0% 3.9% 3.8% 12 New Mexico 3,054 0.94 460 17.7% 3.3% 3.5% 13 South Dakota 1,540 0.92 695 82.2% 12.8% 11.7% 14 Maine 2,080 0.86 345 19.9% 3.7% 3.6% 15 Arizona 8,463 0.82 264 3.2% 0.6% -0.2%

40 City and County of Denver Local Impact global reach 2 Employment Employment Employment LQ Change % Change CAGR LQ CAGR Global Trends and Local Impacts Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 16 Iowa 4,871 0.79 1,564 47.3% 8.1% 7.5% 17 North Carolina 12,541 0.76 183 1.5% 0.3% -0.5% 18 Kansas 3,604 0.65 824 29.6% 5.3% 5.0% 19 Georgia 10,294 0.63 493 5.0% 1.0% 0.0% 20 Vermont 757 0.61 174 29.8% 5.4% 4.9% 21 Minnesota 6,758 0.61 466 7.4% 1.4% 0.7% 22 Wisconsin 6,838 0.61 247 3.7% 0.7% 0.3% 23 Montana 1,074 0.6 182 20.4% 3.8% 3.3% 24 Colorado 5,928 0.6 187 3.3% 0.6% -1.0% 25 Pennsylvania 13,399 0.58 -215 -1.6% -0.3% -0.7%

Source: US Department of Commerce, Bureau of Labor Statistics

Figure 12. Top 25 States in Animal Production Employment (NAICS 112) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Idaho 9,723 8.38 902 10.2% 2.0% 0.5% 2 South Dakota 2,962 4.01 449 17.9% 3.3% 1.7% 3 Nebraska 6,802 4 253 3.9% 0.8% -0.7% 4 Iowa 10,556 3.88 1,316 14.2% 2.7% 1.3% 5 New Mexico 5,357 3.73 -260 -4.6% -0.9% -1.6% 6 Wyoming 1,727 3.38 48 2.9% 0.6% -0.6% 7 Vermont 1,741 3.18 363 26.3% 4.8% 3.5% 8 Montana 2,461 3.11 295 13.6% 2.6% 1.2% 9 Wisconsin 14,936 3.02 3,315 28.5% 5.1% 3.9% 10 Kansas 6,678 2.74 750 12.7% 2.4% 1.4% 11 Oklahoma 6,753 2.38 399 6.3% 1.2% -0.3% 12 Minnesota 10,523 2.15 1,693 19.2% 3.6% 1.9% 13 Puerto Rico 2,715 1.67 52 2.0% 0.4% 1.0% 14 Mississippi 3,087 1.56 -317 -9.3% -1.9% -2.7% 15 Arkansas 3,064 1.47 -503 -14.1% -3.0% -3.9% 16 Colorado 6,030 1.39 600 11.0% 2.1% -0.1% 17 Indiana 6,332 1.22 950 17.7% 3.3% 1.5% 18 North Carolina 8,639 1.19 -900 -9.4% -2.0% -3.5% 19 Washington 6,523 1.19 523 8.7% 1.7% -0.2% 20 Texas 23,406 1.15 689 3.0% 0.6% -2.0% 21 Oregon 3,546 1.14 264 8.0% 1.6% -0.3% 22 Michigan 8,134 1.11 1,908 30.6% 5.5% 3.4%

September 2016 41 National Western Center

Employment Employment 2 Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 23 Utah 2,563 1.11 347 15.7% 3.0% 0.4% 24 California 28,140 0.99 -1,017 -3.5% -0.7% -2.8% 25 Arizona 4,196 0.92 241 6.1% 1.2% -0.4%

Source: US Department of Commerce, Bureau of Labor Statistics

Figure 13. Top 25 States in Ag and Forestry Support Services Employment (NAICS 115) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 California 209,131 4.96 37,678 22.0% 4.1% 1.2% 2 Oregon 12,243 2.66 2,826 30.0% 5.4% 2.6% 3 Washington 21,256 2.62 3,762 21.5% 4.0% 1.3% 4 Idaho 3,771 2.19 -461 -10.9% -2.3% -4.5% 5 Arizona 12,053 1.78 516 4.5% 0.9% -1.5% 6 New Mexico 2,753 1.29 317 13.0% 2.5% 1.0% 7 Nebraska 2,656 1.05 534 25.2% 4.6% 2.2% 8 Arkansas 3,011 0.98 39 1.3% 0.3% -1.4% Global Trends and Local Impacts Global Trends and Local Impacts 9 Florida 19,906 0.96 -9,943 -33.3% -7.8% -10.4% 10 Iowa 3,625 0.9 518 16.7% 3.1% 0.9% 11 Mississippi 2,502 0.85 376 17.7% 3.3% 1.5% 12 Montana 873 0.74 258 42.0% 7.3% 5.0% 13 North Dakota 756 0.64 47 6.6% 1.3% -4.6% 14 Kentucky 3,010 0.62 -489 -14.0% -3.0% -5.4% 15 Georgia 5,182 0.48 394 8.2% 1.6% -0.8% 16 Alabama 2,309 0.46 -96 -4.0% -0.8% -2.8% 17 Colorado 2,861 0.44 433 17.8% 3.3% 0.0% 18 North Carolina 4,765 0.44 808 20.4% 3.8% 1.4% 19 Vermont 354 0.44 -44 -11.1% -2.3% -4.0% 20 South Carolina 2,042 0.4 -49 -2.3% -0.5% -3.2% 21 South Dakota 430 0.39 5 1.2% 0.2% -2.4% 22 Wisconsin 2,788 0.38 336 13.7% 2.6% 0.5% 23 Missouri 2,562 0.36 315 14.0% 2.7% 1.1% 24 Texas 10,965 0.36 -1,066 -8.9% -1.8% -5.2% 25 Kansas 1,226 0.34 231 23.2% 4.3% 2.5%

Source: US Department of Commerce, Bureau of Labor Statistics

42 City and County of Denver Local Impact global reach

Figure 14. Top 25 States in Food Manufacturing Employment (NAICS 311) by LQ, 2014 2 Global Trends and Local Impacts Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Arkansas 42,967 3.42 -3,859 -8.2% -1.7% -1.3% 2 Nebraska 34,125 3.32 731 2.2% 0.4% 0.2% 3 Alaska 10,989 3.06 1,433 15.0% 2.8% 2.5% 4 Iowa 50,330 3.06 -293 -0.6% -0.1% -0.3% 5 Idaho 16,486 2.35 828 5.3% 1.0% 0.8% 6 Kansas 31,534 2.14 1,004 3.3% 0.6% 0.8% 7 Wisconsin 63,749 2.13 3,967 6.6% 1.3% 1.2% 8 Delaware 9,144 1.99 45 0.5% 0.1% -0.2% 9 South Dakota 8,422 1.89 805 10.6% 2.0% 1.7% 10 Mississippi 22,253 1.86 -1,844 -7.7% -1.6% -1.2% 11 Vermont 5,281 1.6 1,366 34.9% 6.2% 6.1% 12 Minnesota 45,627 1.54 2,658 6.2% 1.2% 0.8% 13 Alabama 30,579 1.51 -2,397 -7.3% -1.5% -1.2% 14 Oregon 27,007 1.44 3,746 16.1% 3.0% 2.4% 15 Georgia 62,501 1.43 -824 -1.3% -0.3% -0.7% 16 Kentucky 26,326 1.34 1,221 4.9% 1.0% 0.6% 17 Missouri 38,096 1.31 -2,834 -6.9% -1.4% -1.2% 18 Illinois 77,421 1.24 422 0.5% 0.1% 0.2% 19 North Carolina 52,293 1.19 59 0.1% 0.0% -0.3% 20 Indiana 36,278 1.15 2,687 8.0% 1.6% 0.9% 21 Pennsylvania 69,534 1.13 2,732 4.1% 0.8% 0.9% 22 Utah 15,886 1.13 1,016 6.8% 1.3% -0.2% 23 Tennessee 32,659 1.09 270 0.8% 0.2% -0.5% 24 Washington 36,104 1.09 2,310 6.8% 1.3% 0.6% 25 Ohio 57,077 1.01 3,877 7.3% 1.4% 1.2%  32 Colorado 20,591 0.78 2,210 12.0% 2.3% 1.1%

Source: US Department of Commerce, Bureau of Labor Statistics

September 2016 43 National Western Center

Figure 15. Top 25 States in Beverage Manufacturing Employment (NAICS 3121) by LQ, 2014 2 Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 California 50,251 2.21 7,538 17.6% 3.3% -0.2% 2 Kentucky 5,506 2.11 1,089 24.7% 4.5% 1.4% 3 Colorado 6,373 1.83 1,145 21.9% 4.0% 0.2% 4 Montana 1,061 1.67 371 53.8% 9.0% 6.0% 5 Washington 6,541 1.49 2,311 54.6% 9.1% 5.5% 6 Maine 1,253 1.47 45 3.7% 0.7% -1.6% 7 Vermont 631 1.44 293 86.7% 13.3% 10.4% 8 Tennessee 4,601 1.16 514 12.6% 2.4% -1.0% 9 Michigan 6,020 1.02 1,403 30.4% 5.5% 1.9% 10 Hawaii 914 1.01 33 3.7% 0.7% -2.4% 11 Ohio 6,907 0.92 189 2.8% 0.6% -2.4% 12 Pennsylvania 7,380 0.91 1,456 24.6% 4.5% 1.9% 13 New Hampshire 757 0.84 93 14.0% 2.7% 0.0% 14 Iowa 1,741 0.8 387 28.6% 5.2% 2.1% 15 Idaho 730 0.78 730 n/a n/a n/a 16 North Carolina 4,581 0.78 944 26.0% 4.7% 1.3% Global Trends and Local Impacts Global Trends and Local Impacts 17 Texas 12,705 0.77 1,421 12.6% 2.4% -2.0% 18 Florida 8,446 0.76 522 6.6% 1.3% -2.0% 19 Arkansas 1,147 0.69 -6 -0.5% -0.1% -2.4% 20 Minnesota 2,686 0.68 507 23.3% 4.3% 0.9% 21 Georgia 3,824 0.66 3,824 n/a n/a n/a 22 Massachusetts 3,037 0.63 3,037 n/a n/a n/a 23 New York 7,716 0.61 1,728 28.9% 5.2% 2.1% 24 Nebraska 727 0.53 -45 -5.8% -1.2% -4.0% 25 Rhode Island 287 0.43 -220 -43.4% -10.8% -12.9%

Source: US Department of Commerce, Bureau of Labor Statistics

Figure 16. Top 25 States in Animal Slaughtering and Processing Employment (NAICS 3116) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Nebraska 25,648 7.69 747 3.0% 0.6% 1.4% 2 Arkansas 28,939 7.09 -2,354 -7.5% -1.6% -0.3% 3 Delaware 7,899 5.29 220 2.9% 0.6% 1.3% 4 Iowa 27,669 5.18 -1,538 -5.3% -1.1% -0.3% 5 Mississippi 16,565 4.26 -979 -5.6% -1.1% 0.1% 6 Kansas 17,958 3.75 76 0.4% 0.1% 1.2% 7 South Dakota 5,354 3.7 409 8.3% 1.6% 2.3%

44 City and County of Denver Local Impact global reach 2 Employment Employment Employment LQ Change % Change CAGR LQ CAGR Global Trends and Local Impacts Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 8 Alabama 21,607 3.29 -2,564 -10.6% -2.2% -0.9% 9 Georgia 34,908 2.46 -872 -2.4% -0.5% 0.1% 10 North Carolina 31,158 2.18 -1,379 -4.2% -0.9% -0.4% 11 Missouri 16,663 1.77 -2,483 -13.0% -2.7% -1.5% 12 South Carolina 11,600 1.74 -207 -1.8% -0.4% 0.0% 13 Wisconsin 16,912 1.74 -525 -3.0% -0.6% 0.2% 14 Minnesota 15,924 1.65 320 2.1% 0.4% 0.9% 15 Kentucky 9,521 1.5 374 4.1% 0.8% 1.5% 16 Oklahoma 7,675 1.38 -739 -8.8% -1.8% -1.1% 17 Tennessee 11,131 1.15 66 0.6% 0.1% 0.5% 18 Virginia 12,910 1 -1,209 -8.6% -1.8% -0.8% 19 Indiana 10,064 0.99 1,054 11.7% 2.2% 2.6% 20 West Virginia 2,226 0.9 -14 -0.6% -0.1% 1.4% 21 Texas 35,244 0.88 -3,779 -9.7% -2.0% -2.5% 22 Colorado 7,230 0.85 -576 -7.4% -1.5% -1.6% 23 Illinois 16,709 0.82 -1,234 -6.9% -1.4% -0.5% 24 Pennsylvania 15,283 0.77 1,264 9.0% 1.7% 2.8% 25 Utah 3,481 0.76 432 14.2% 2.7% 2.0%

Source: US Department of Commerce, Bureau of Labor Statistics

Figure 17. Top 25 States in Cattle Ranching and Farming Employment (NAICS 1121) by LQ, 2014

Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Idaho 8,913 12.73 1,002 12.7% 2.4% 0.3% 2 New Mexico 5,113 5.91 -158 -3.0% -0.6% -1.9% 3 Vermont 1,602 4.86 369 29.9% 5.4% 3.4% 4 Nebraska 4,817 4.7 301 6.7% 1.3% -0.7% 5 Montana 2,193 4.6 333 17.9% 3.3% 1.4% 6 South Dakota 2,021 4.54 333 19.7% 3.7% 1.5% 7 Wisconsin 13,463 4.51 3,156 30.6% 5.5% 3.5% 8 Wyoming 1,357 4.4 19 1.4% 0.3% -1.5% 9 Kansas 5,484 3.73 706 14.8% 2.8% 1.1% 10 Colorado 4,674 1.78 580 14.2% 2.7% -0.3% 11 Iowa 2,928 1.78 670 29.7% 5.3% 3.2% 12 Oregon 2,722 1.46 248 10.0% 1.9% -0.5%

September 2016 45 National Western Center

Employment Employment 2 Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 13 Minnesota 4,246 1.44 778 22.4% 4.1% 1.9% 14 Texas 17,544 1.42 1,285 7.9% 1.5% -1.9% 15 Washington 4,667 1.42 401 9.4% 1.8% -0.6% 16 California 22,528 1.32 -675 -2.9% -0.6% -3.0% 17 Michigan 5,856 1.32 1,484 33.9% 6.0% 3.2% 18 Arizona 3,495 1.27 207 6.3% 1.2% -1.1% 19 Oklahoma 1,949 1.14 131 7.2% 1.4% -0.7% 20 Utah 1,496 1.07 200 15.4% 2.9% -0.4% 21 New York 7,896 0.82 1,454 22.6% 4.2% 1.8% 22 Nevada 1,027 0.79 -28 -2.7% -0.5% -2.6% 23 Maine 500 0.78 64 14.7% 2.8% 1.3% 24 North Dakota 338 0.7 42 14.2% 2.7% -3.1% 25 Indiana 1,959 0.63 443 29.2% 5.3% 2.8% Source: US Department of Commerce, Bureau of Labor Statistics

Figure 18. Top 25 States in Other Food Manufacturing Employment (NAICS 3119) by LQ, 2014

Global Trends and Local Impacts Global Trends and Local Impacts Employment Employment Employment LQ Change % Change CAGR LQ CAGR Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 1 Vermont 1,425 3.41 880 161.5% 21.2% 18.0% 2 Hawaii 1,948 2.27 329 20.3% 3.8% 0.7% 3 Georgia 10,613 1.92 516 5.1% 1.0% -2.1% 4 Wisconsin 7,273 1.92 2,070 39.8% 6.9% 4.1% 5 Iowa 3,889 1.87 262 7.2% 1.4% -1.4% 6 Kansas 3,494 1.87 142 4.2% 0.8% -1.6% 7 Oregon 4,423 1.87 1,484 50.5% 8.5% 5.1% 8 Kentucky 4,117 1.66 681 19.8% 3.7% 0.6% 9 New Jersey 8,751 1.66 1,866 27.1% 4.9% 2.6%

46 City and County of Denver Local Impact global reach 2 Employment Employment Employment LQ Change % Change CAGR LQ CAGR Global Trends and Local Impacts Rank State (2014) (2014) (2009-2014) (2009-2014) (2009-2014) (2009-2014) 10 Minnesota 5,724 1.53 726 14.5% 2.7% -0.3% 11 Pennsylvania 11,379 1.47 1,456 14.7% 2.8% 0.3% 12 California 27,997 1.29 5,533 24.6% 4.5% 1.0% 13 Indiana 5,032 1.27 180 3.7% 0.7% -2.3% 14 Tennessee 4,527 1.2 1,559 52.5% 8.8% 5.5% 15 Arkansas 1,807 1.14 152 9.2% 1.8% -0.5% 16 Ohio 7,966 1.12 1,306 19.6% 3.6% 0.7% 17 Illinois 8,594 1.09 761 9.7% 1.9% -0.7% 18 Nebraska 1,397 1.08 -209 -13.0% -2.7% -5.3% 19 New Mexico 1,072 0.98 45 4.4% 0.9% -1.2% 20 Rhode Island 624 0.98 177 39.6% 6.9% 4.1% 21 Virginia 4,874 0.97 418 9.4% 1.8% -0.6% 22 North Carolina 5,358 0.96 1,165 27.8% 5.0% 1.8% 23 Maryland 3,254 0.93 -13 -0.4% -0.1% -2.6% 24 Washington 3,630 0.87 451 14.2% 2.7% -0.7% 25 Idaho 739 0.83 128 20.9% 3.9% 0.7%  29 Colorado 2,517 0.76 399 18.8% 3.5% -0.3% Source: US Department of Commerce, Bureau of Labor Statistics

Colorado Agricultural Exports

Colorado has seen dramatic annual increases in agricultural exports to several countries, two of the most notable are India and Egypt (annual increases of 44.4% and 48.4% respectively). In addition to India, the 3 other BRIC countries of Brazil, China, and Russia also saw large rates of increase in agricultural imports from Colorado, growing at rates above 10% per year, with Russia leading the remaining 3 at a rate of 20.5% annually. As a result of the increased economic position of these developing nations, Colorado has benefited from a large expansion in agricultural exports.

September 2016 47 National Western Center

Figure 19. Annual Growth Rate of Colorado Agricultural Exports (2005-2015) 2 Japan Philippines Egypt Turkey Malaysia Dominican Republic Canada Russian Federation Kenya India China Brazil Mexico 0% 10% 20% 30% 40% 50% 60% Annual Growth in Exports (%)

Source: International Trade Administration

Colorado has seen a rapid increase in exports of exports increased at a rate of 9.3% per year. In agricultural commodities since 2005. Between general, higher value commodities are more likely 2005 and 2015, total agricultural commodity to be shipped by air, rather than by rail or ship. Global Trends and Local Impacts Global Trends and Local Impacts

12%

10%

8%

6% (%)

4%

2%

Annual Growth Rate in Exports 0% TOTAL 1111--OILSEEDS & 1112--VEGETABLES 1114--MUSHROOMS; 1119--OTHER 1113--FRUITS & TREE GRAINS & MELONS NURSERY & RELATED AGRICULTURAL NUTS PRODUCTS PRODUCTS

Figure 20. Annual Colorado Agricultural Product Export Growth Rates (2005-2015)

Source: International Trade Administration

Producer Price Index, Farm Products 2015 the price index increased at a modest 1.6% annual rate. Between October 2002 and October The figure below points to increasing volatility 2014 the rate of growth was 5.7% per year. in producer prices for farm products since 2004, Dramatic growth in commodity prices was linked as evidenced by compound annual growth in larger measure to aggregate demand growth. rates. Between October of 1990 and October of

48 City and County of Denver Local Impact global reach

Figure 21. Producer Price Index, Farm Products, 1995 to 2015 2 Global Trends and Local Impacts 210

190

170

150

130

110

90

70

50 2011 1997 2014 2013 1998 1995 1996 1999 2012 2015 2001 2010 2007 2004 2003 2008 2002 2005 2006 2009 2000

Source: US Department of Commerce, Bureau of Labor Statistics

Energy Prices has been the cost of energy. With dramatic decreases in energy costs since 2014, pressure As shown in the figure below, one factor that on commodity prices has lessened. influenced recent growth in commodity prices

Figure 22. Rocky Mountain No 2 Diesel Retail Prices (Dollars per Gallon)

$4.50

$4.00

$3.50

$3.00

$2.50

$2.00

$1.50

$1.00

$0.50

$0.00 2011 1997 2014 2013 1998 1995 1999 1996 2012 2015 2010 2001 2007 2004 2003 2008 2002 2005 2009 2006 2000

Source: Energy Information Administration

September 2016 49 National Western Center

At the same time, while No 2 Diesel fuel prices well above rates of inflation nationally. The 2 have fallen dramatically since 2014 to levels last Rocky Mountain Region (PAAD 4) is defined by seen in 2009, the overall rate of increase in fuel EIA as including Colorado, Idaho, Montana, Utah, prices from 1995 to 2015 (4.7% per year) remains and Wyoming.

FRONT RANGE REGIONAL ECONOMIC DATA

Front Range Population Growth 2000 to 2015. Forecasts through 2025 point to accelerated growth of greater than 80,000 According to the Colorado State Demography residents / year. Growth correlates directly with Office, the 16-County Front Range has added demand for food, from production to processing, an average of 65,500 residents per year from distribution, and sales.

Figure 23. New Residents / Year, 16-County Front Range

90,000

85,000

80,000

75,000

Global Trends and Local Impacts Global Trends and Local Impacts 70,000

65,000 80,000 new residents per year forecast beyond 2016 60,000

55,000

50,000 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Source: State of Colorado

Front Range Job Growth

Between 2009 and 2014, the Denver-Aurora, CO Consolidated Statistical Area (CSA) experienced dramatic employment growth, adding jobs at a 4.7% annualized rate, 5th fastest among US metropolitan areas over that time period; only Boston, Charlotte, Orlando, and Cleveland grew at faster rates.

50 City and County of Denver Local Impact global reach

Figure 24. Annual Job Growth Rate, 2009-2014, Noted Metro Areas 2 Global Trends and Local Impacts Houston Milwaukee Indianapolis Denver Region: 4.7% Philadephia annual job growth; 267,150 new jobs since 2009 San Jose Denver Cleveland Orlando Charlotte Boston 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0%

Source: US Department of Commerce, Bureau of Labor Statistics

Annual Growth in Cost of Living by zz In 2015, Bureau of Labor Statistics data Metro Area suggests that the local cost of living in Denver exceeded national averages. zz The Denver Metropolitan Area has seen zz While the local rate of growth is growth in cost of living since 1990, growing at consequential, the absolute cost of living in the second highest rate among noted metros; the Denver Metropolitan area is still below Only San Francisco grew at a faster rate over that of West Coast markets. the noted period.

Figure 25. Cost of Living Comparisons, Noted Metropolitan Areas

San Francisco Denver Portland Houston Seattle San Diego New York City Minneapolis US 2007-2016 Kansas City St. Louis 1990-2016 Boston Los Angeles Dallas Fort Worth Philadelphia Chicago Atlanta Detroit 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%

Source: US Department of Commerce, Bureau of Labor Statistics

September 2016 51 National Western Center

Colorado GDP- Key Industry Growth dramatic growth in mining, both since 2009 as 2 well as since 1997. Since 2009, sectors such as AECOM reviewed data from the US Dept. of Transportation & Warehousing, Utilities, Arts & Commerce, Bureau of Economic Analysis Entertainment, and Agriculture stand out in terms regarding Gross Domestic Product (GDP). of faster growth since 2009. Changes in GDP by sector for Colorado revealed

Figure 26. Annual Percent Change in Key Industries, GDP, State of Colorado

Government Arts, entertain, rec, hotel, food… Health care and social… Educational services 2009-2014

Professional & business services 1997-2014 Real estate: rental & leasing Finance, insurance, real estate Information Transportation & warehousing Retail trade Wholesale trade

Global Trends and Local Impacts Global Trends and Local Impacts Food & beverage / tobacco mfg Manufacturing Construction Utilities Mining Agriculture, forestry, fishing,… All industry total

0% 2% 4% 6% 8% 10% 12% 14% 16%

Source: US Department of Commerce, Bureau of Labor Statistics

52 City and County of Denver

Innovation 3 Districts and Economic Development National Western Center

3 INTRODUCTION Agriculture and Innovation served as the focal zz The Brookings Institute, The Rise of point for the 2014 CSU study, the Emergence of an Innovation Districts, July 2016 Innovation Cluster in the Agricultural Value Chain zz CBRE Global Workplace Solutions and along Colorado’s Front Range. That study clearly CoreNet Global. (2016); Lab of the Future. expressed the opportunity for the Front Range, linked with geography, as well as economic and zz Making the Case for Innovation Districts, demographic factors, that can support growth of an Urban land Institute, December 2015 innovation-led industry cluster in agriculture and zz Survey of Entrepreneurship, published by the food. This effort focuses on innovation, but more Economist, 2009 explicitly in an economic development context, zz Survey of Innovation, published by the to frame how deliberate choices regarding the Economist, 2007 future of NWC have the potential to accelerate zz Survey of Innovation, published by the regional job creation and enhance the international Economist, 1999 competitive position of the Front Range. zz Technology and Economic Development by The effort is based on AECOM Experience Malecki, 1997 supported by key sources:

NWC IMPLICATIONS Agriculture and Innovation served as the focal basic agricultural research represents a relative point for the groundbreaking 2014 CSU study, small portion of overall university R&D spending, the Emergence of an Innovation Cluster in the about 5% nationwide in 2014. Spending in the Agricultural Value Chain along Colorado’s Front medical and biological sciences represents more Range, clearly delineating emerging opportunity than 45% of total R&D activity. For NWC, future to grow an innovation-led industry cluster in activities need to unfold across a spectrum of agriculture and food. This effort brings the R&D activity in the plant and life sciences, rather economic development implications for NWC in than only in agriculture; strategies that link supporting Innovation into sharper focus, to frame animal and human health are one example. how deliberate policy choices can be leveraged to accelerate regional job creation and enhance While the research park model has been around

Innovation Districts and Economic Development Districts and Economic Innovation the international competitive position of the Front for more than 30 years, recent evolution in the Range. Our experience shows that university- model is important for NWC, linked with two explicit linked research and development (R&D) as an transitions that have emerged in the past 15 years: economic development driver is a recurring theme, 1. From traditional university-led research closely associated with the development of development to explicit tech transfer and research parks. Over the last 30 years, attraction partnership with the private sector of R&D has been consistently seen as a route to expand local economic activity, create new 2. From isolated suburban corridor and campus businesses that foster productivity improvement locations to increasingly urban, more compact and innovation, and drive job creation. and dense locations, connected by transit and anchored by a more diverse mix of uses Universities like Colorado State have always been crucial anchors, initially sponsoring the Innovation Districts are increasingly seen as global development of research parks to create essential locations where federal funding for locations where public and private research research in the plant and life sciences can be grants can be leveraged to create new spin-off leveraged to spin off ideas into private sector companies. In looking at U.S. data from the opportunities. These placed-based environments National Science Foundation, it is clear that become key ingredients in innovation, as

56 City and County of Denver Local Impact global reach

immediate proximity creates opportunities for branding; KC Animal Health Corridor is an 3

“accidental collisions” or “deliberate serendipity” example Innovation Districts and Economic Development between people. Ultimately, successful innovation centers are able to leverage greater Core Implications for NWC Include: density & interest in mixed use to create place- zz Place based innovation districts tend to based outcomes that private-sector companies incorporate between 1 to 3 million sq. ft. of increasingly seek out to access and cultivate talent. office & lab space, at urban / neighborhood For NWC, the analysis of innovation districts development density (i.e. floor to area ratios highlights three primary variations linked with between 1.0 to 7.0), with mixed use and varying levels of university participation: transit connectivity. Lab spaces tend to cover between 25% and 50% of these programs. 1. Research and innovation Districts: Place-based zz While not all districts are anchored by health districts linked to health care and life sciences care, all districts have a significant university research; CORTEX in St. Louis is one example role (with several having more than one 2. Food Hubs: Districts which align farmers with institution present), and increasingly explicitly food producers and consumers; the Louisville partnerships with the private sector. Food Port and Detroit Eastern Market District zz Land requirements for an NWC innovation are examples. strategy will require a minimum amount of 3. Regional Value Chain: regional focus on a land, which may or may not be available specific sector, but more about corridors and within the Core NWC site.

INNOVATION AND ECONOMIC DEVELOPMENT Since the 1980’s, the pursuit of research and recently, providing a platform to leverage public development (R&D) as drivers for innovation and and private research grants into new spin-off economic development has been a recurring companies. theme, with regions focused on the goal of attracting higher wage employment, spin-off Universities have always been at the forefront development, and related economic value of research and innovation, particularly since added. Over the last 30 years, attraction of the 1980’s when an initial wave of university-led R&D activity has been consistently seen as a research parks opened. As shown below, the key route to expand an area’s economic base, evolution of these districts is linked with two creating industries that foster productivity explicit transitions: improvement and constant innovation, 1. From traditional university-led research creating new spin-off businesses opportunities. development to explicit tech transfer and Universities have been crucial anchors of this partnership with the private sector activity, initially sponsoring the development of research parks all over the world, and more

September 2016 57 National Western Center

Early Parks 1990s Post 2000 3 “STAND ALONE” “CONNECTIONS” “REGIONAL ECONOMIC Suburban industrial park model Anchored with R&D facilities GENERATOR” No partnerships or incentives Innovation centers and tech Urban mixed-use University-led, but only beginning incubators Support start-ups and to discover Tech transfer Multi-tenant facilities entrepreneurs Some support provided directly Formal accelerator & maker Health care and life sciences spaces Tenant firms partnering More amenities (transit, day care, Value chain-linked wellness, etc.) corridors Niche positioning Corporate interest IT/Bioinformatics Convergence

Food hubs

2. From isolated suburban corridor and campus structural for the San Diego economy. The City, locations to increasingly urban, more compact regional business leaders and organizations, and dense locations, connected by transit and and academia, with economic adjustment anchored by a more diverse mix of uses assistance from the Federal Government, started to identify the region’s industry clusters These districts have also become increasingly and opportunities for economic growth based location driven (i.e. place-based), anchored on diversification and less reliance on Federal by formal business accelerators, support for dollars. Biotechnology and Telecommunications entrepreneurs, and more explicit partnerships were among those clusters. Life science research both with other universities and the private sector. had a long history and a foundation in the region Fueling the rise of these innovation districts is the with the world renowned Scripps Institute of power of convergence, where a concentration Oceanography and the Salk Institute, among of talent, technology, knowledge and market others. Telecommunications was an area of opportunities align unfold to create new industry specialization at UC San Diego and defense clusters; examples include: contractors. Much of the basic research and technologies were developed for, funded by, and

Innovation Districts and Economic Development Districts and Economic Innovation zz The convergence of bio-medical and applied to defense applications. The opportunity telecommunications to create telemedicine / existed to develop and apply these applications telehealth services for commercial use. zz Biotechnology and botany to create “Bio Fuels” sector Out of this came the creation and evolution zz Information technology, advanced materials, of the Biotech industry cluster, exemplified and energy to create the “Clean-Tech” sector in the early years by companies such as Hybritech and IDEC Pharmaceuticals, and the zz Information technology and big data to Telecommunications industry cluster, anchored create Bioinformatics; storing, analyzing by companies such as Qualcomm, which biological and genetic information. developed and patented CDMA technology that One of the best examples the power of research is the standard than enabled 3G and 4G Smart and innovation is in the San Diego Region. With Phones. From these technologies, and others the end of the Cold War in the 1980s, the regional such as software and materials technologies, defense industry and aerospace industry in the many new applications were developed by region scaled back. The national recession of spin-off companies, related new enterprises, and the early 1990s was not just cyclical, but also existing global companies that were drawn to the San Diego region because of the scientific

58 City and County of Denver Local Impact global reach

expertise, research conducted, and workforce becoming a force, with San Diego Regional 3 quality associated with these clusters, such EDC and businesses to position Torrey Pines Innovation Districts and Economic Development as mapping of the Human Genome and DNA Mesa as a global center for research. Biocom, sequencing with broad medical applications, was organized to represent the biotech cluster, new diagnostic medical instruments, tele-med, originally in response to a water crisis, but which even sporting equipment innovations, water quickly evolved into a vehicle for collaboration conservation technologies, data management and advocacy. More recently, Cleantech San of natural systems, “Smart City” technology, Diego was formed, originally assisted by a City alternative energy, as well as continued defense of San Diego grant, to define, identify companies, applications which have crossed-over into civilian and develop a Cleantech industry cluster in the applications as well through companies such region. as SAIC, Cubic, and General Atomics. A recent convergence application under development, San Diego is now one of the top three biotech that converges not only the industries of concentrations in the U.S., with over 500 life biotechnology, agriculture, and energy, but also science companies and many research institutes regional geography, is the development of algae including San Diego Biomedical Research as a more efficient biofuel, with research and Institute, the Scripps Research Institute, Sanford- development in San Diego, but algae testing Burnham Medical Research Institute, La Jolla farms in Imperial County, over 100 miles to the Institute of Allergy and Immunology, Salk east. Institute for Biological Studies, Scripps Clinic, and the University of San Diego, all within a The premise behind convergence is collaboration 5-minute walk on Torrey Pines Mesa, a former and the mixing of traditional different disciplines decommissioned military base, Camp Matthews, to rethink products and processes. Collaboration conveyed with City of San Diego owned land in the region was facilitated by the formation of to develop UCSD in the 1960s, with subsequent certain non-profit institutions that were formed plans to develop adjacent research and specifically for that purpose. CONNECT was technology campuses. founded by UC San Diego in the mid-1980s as one of the nation’s first start-up accelerators AECOM innovation district research identified to link university research and innovation with several projects, summarized on the following high-tech and life science companies in their page, which provide insight for NWC: early stages of development, such as Cubic, Linkabit (predecessor of Qualcomm), SAIC, and Hybritech, and entrepreneurs and investors,

September 2016 59 National Western Center 3 Notes Real estate strategy to revitalize Real an existing older industrial / service district, about 1 mile from the downtown central business district. MIT owns the land while Forest City develops and operates the site under long term ground leases. Project is expected to break ground in 2016, connected with Duke University Human health, food, nutrition and agriculture. 3P: corporations, universities and healthcare. David Murdock, owner of Dole Foods founded the Campus; bought former Pillowtex mill after it closed in 2003; Dole, General Mills and Monsanto are conducting research In 2003 the University of Maryland, Baltimore created a 501(c)(3) non-profit corporation, the University Health Corporation Park Sciences Research activities. (RPC), to direct the Park’s in Manhattan, along East Location dense Very River. Project will link agriculture production with research; in early phases Farm Research of Ohio State Part Forest city Enterprises is the developer. Forest city Enterprises is the developer. 31 acres was cleared and 584 families relocated. NA NA NA Yes Yes Yes Yes Yes Yes Mixed Mixed Use? 700 800 500 900 2014 <300 <300 1,900 3,200 2,600 District Estimated Employment 1.11 1.66 7.22 3.44 0.07 0.27 0.48 2.36 0.05 Floor to area ratio Full 334,000 1,100,000 1,540,000 1,950,000 1,800,000 1,000,000 1,500,000 Build-Out 3,700,000 3,900,000 8,000 Square Footage 514,000 Current 470,000 700,000 490,000 260,000 600,000 1,700,000 1,600,000 Bio/Med/Commercial Development 1983 2013 2016 2010 2007 2004 2008 2002 2006 Started 31 15 12 27 28 177 3.5 350 1650 Acres Innovation Districts and Economic Development Districts and Economic Innovation Status Revitalization Revitalization of older service district Largely built Largely out, 9 building campus New urban district in development Next to Johns Hopkins Medical Center Redevelopment area adjacent to downtown 2-building campus term Long strategy term Long strategy / Part of the Ohio University State Redevelopment Redevelopment of former mill, as a research camps Land Use Context Land Urban - Neighborhood Urban - Neighborhood Downtown Urban - Neighborhood Urban - Neighborhood Downtown Rural / Small Town Rural / Small Town Suburban campus Location St. Louis, Louis, St. MO Cambridge, MA Durham, NC Baltimore, MD Baltimore, MD New York, NY Lucie St. County, FL Wooster, OH Kannapolis, Kannapolis, NC Name Cortex University at MIT Park Durham Innovation District Science + Technology Park - Bio Park University of Maryland Alexandria Center for Life Sciences Treasure Coast Research Park BioHio Research Park North Carolina Research Campus

60 City and County of Denver Local Impact global reach 3 Innovation Districts and Economic Development Project is expected to break ground in 2016. Intent is a place where farmers, businesses, and residents can interact Site of the Nebraska State Fair in Site of the Nebraska State Lincoln Notes An existing District that has evolved around the historic Detroit Eastern Market, with a core focus on food production, as well a secondary focus on manufacturing 20,000 GSF Flexible Technology GSF Flexible Technology 20,000 Incubator Building and the USDA’s commitment to contract the 80,000 Facility. GSF Grape Genetics Research NA NA Mixed Mixed Use? 2014 <300 <300 <300 4,000 District Estimated Employment NA 0.10 0.31 0.48 Floor to area ratio NA Full 300,000 500,000 Build-Out 2,200,000 MIT in Boston; the Durham Innovation District Durham, NC; Science in Baltimore, MD; the North Carolina Research Park + Technology Center for Life NC; and the Alexandria Campus in Kannapolis, details include: Key NY. Sciences in New York, space Square Footage 20,000 vacant Current 60,000 380,000 sf existing 4.3 million Bio/Med/Commercial Development NA 2011 2015 2005 Started 72 24 164 1,130 Acres Development has started Status Long term Long strategy / of U Part Nebraska Reuse of Reuse abandoned tobacco factory Evolving District Rural / Small Town Urban - Neighborhood Land Use Context Land Urban - Neighborhood Rural / Small Town Cornell, NY Louisville, Louisville, KY Location Detroit, MI Lincoln, NE Cornell Agriculture and Food Technology (the Park Technology Farm) Louisville Louisville Food Port Name Detroit Eastern Market District Nebraska Innovation Campus Innovation District Discussion research and innovation Districts are the Case Studies, Regarding increasingly place-based, and emerging in urban neighborhoods or downtown districts, and linked to health care life sciences @ University Park Louis; in St. include CORTEX research. Examples

September 2016 61 National Western Center

zz While all examples all have at least one technology hub, a goal that is linked, in part, to the 3 university serving as owner or project anchor; success of the related entities noted above. the North Carolina Research Park stands out because it is anchored by the presence of CORTEX has benefited from several sources of several universities, not just one. investment, including access to tax credit support through the Missouri Development Finance Board. zz University Park @ MIT was developed as More recently, the program has been able to a partnership between the University and access a reported $35 million in tax increment Forest City (a developer). financing (TIF) in 2012 to fund a major expansion zz Place-based innovation districts tend to plan, with a potential value of approximately incorporate between 1 to 3 million sq. ft. of $2.1 billion. TIF funding is expected to sustain office & lab space, at urban / neighborhood infrastructure projects including a new interstate development density (i.e. floor to area ratios interchange. A recently-awarded $10-million-dollar between 1.0 to 7.0), with mixed use and Tiger Grant will fund a new Metro Link rail station transit connectivity. Lab spaces tend to cover in the district, and expand the existing Central West between 25% and 50% of these programs. End Station.

The CORTEX District is unique in that it is The success of CORTEX should be viewed in associated with a number of universities, and is context with broader efforts undertaken by the owned and operated by a non-profit organization Danforth Foundation, Washington University, and which can either partner with developers or related partners, including organizations such self develop projects. Development of Cortex as BioGenerator, which is a privately funded goes back to a broader partnership that was 501(c)(3) organization that is positioned to fund, advanced in St. Louis by William Danforth incubate, and grow bioscience companies (former Chancellor at Washington University locally. Since 2003, 42 portfolio companies and the founding chair of the Danforth Plant within BioGenerator have raised more than Sciences Center) as an outgrowth of the need $140 million in capital. These efforts also link to diversify beyond regional dependence on with more than a reported $1 billion in venture defense contracting. Conversations led to the capital funding since 2001, which grew initially formation of the Coalition for Plant and Life from specific seed investments by Washington Sciences, which was created through the interest University, the Danforth Foundation, and the of major business organizations in St Louis, and McDonnell family. Growth in the biosciences led by William Danforth, as a regional economic across St Louis was also supported by enabling development initiative. The coalition included state legislation, including the Missouri Life public and private organizations including Sciences Research Trust Fund, which started in Washington University, as well as Sigma-Aldrich Innovation Districts and Economic Development Districts and Economic Innovation 2003 and allows researchers to apply for grants and Monsanto. Reflecting its success, this in fields related to the plant and animal sciences, organization was rebranded as BioSTL in 2011. medical devices, biomaterials and composite research, nanotechnology, clinical imaging, and CORTEX itself was planned largely as a real information technology related to human health. estate and land assembly project, one with a clear focus on the incubation of new companies in the plant and life sciences. The vision behind Agriculture-Linked Innovation Centers CORTEX is significant. Its “local mission” was to serve as the regional focal point for technology, The case studies included several research innovation, and entrepreneurism, essentially a real and innovation districts with an explicit estate development that could capture and grow focus on agriculture. The analysis found that commercialized research that flowed out of anchor these projects tend to be closely associated institutions such as Washington University, Saint with universities and have a closer physical Louis University, and the University of Missouri-St. connection to agricultural production fields. Louis. In addition, it has a “global mission” to Projects tend to be in more rural locations, with establish St. Louis as an internationally recognized significantly lower densities of development. Examples include:

62 City and County of Denver Local Impact global reach 3 zz Treasure Cost Research Park in St. Lucie built around a specific sector, but built more

County, FL; around corridors and branding. Examples include Innovation Districts and Economic Development zz Nebraska Innovation Campus in Lincoln, NE; the KC Animal Health Corridor in Kansas City and the Michigan Defense Corridor, located in zz BioHio Research Park in Wooster, OH; the Detroit Metropolitan Area. The KC Animal zz The Cornell Agriculture and Food Health Corridor is notable in that it is in fact a Technology Park in Cornell, NY. regional branding strategy covering an extensive geography from Manhattan, KS to Columbia, Food Hubs MO, which is reportedly home to more than 300 companies focused on animal health. The Food Hubs can either be self contained, or corridor is overseen by a non-profit organization function within a “district” framework, generally which has explicit roles in supporting the regional aligning farmers with food producers and brand, including networking, education, training, consumers; examples include the West Louisville and legislative advocacy, as well as support Food Port and Detroit Eastern Market District. related to economic development incentives; the The West Louisville example is being planned on organization is governed by an advisory board a 24-acre infill site by a non-profit organization which has public and private representation. called Seed Capital KY, with an explicit mission of making more healthy food options available to lower income neighborhoods. The project has Significance of Federal Funding for secured initial tenant interest from FarmedHere, Research and Development which plans to build a 60,000-sf indoor “vertical” farm as part of the project. In Denver, districts Analysis of data from the National Science such as RiNo clearly have an explicit food Foundation indicates that basic agricultural component and can be viewed in similar fashion. research represents a relative small portion of overall university R&D spending, about 5% nationwide in 2014. Spending in the medical and Branded Corridors biological sciences represents > 45% of total R&D Activity. The following chart summarizes these Beyond district models, our research also trends. identified strategies that are regional in context,

Figure 27. Higher education R&D expenditures, by R&D field: FYs 2005–14, in thousands of US Dollars

$25,000,000 Computer sciences

Environmental sciences

$20,000,000 Agricultural sciences

Biological sciences

$15,000,000 Medical sciences Life sciences, nec

Mathematical sciences $10,000,000 Physical sciences

Psychology $5,000,000 Social sciences

Engineering

$0 Non Science & Tech 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Source: National Science Foundation

September 2016 63 National Western Center

As shown in the chart below, research and sciences ranks a distant third in total 3 development linked to traditional agricultural expenditures since 2005.

Figure 28. Cumulative Higher education R&D expenditures, by R&D field: FYs 2005–14, in Thousands of US Dollars

Medical sciences Biological Sciences

Agriculturial Sciences

Mechanical & Civil Engineering

Electrical Engineering

Physics

Engineering

Computer Sciences

Chemistry

Life Sciences, NEC

Bioengineering & biomedical engineering

Aeronautical & astronautical engineering

$0 $50,000,000 $100,000,000 $150,000,000 $200,000,000

Source: National Science Foundation

The following chart highlights similar data for of Colorado (Boulder) and Colorado State Colorado higher education institutions. The University in driving the vast majority of research chart reinforces the prominent role of University and development expenditures since 2005. of Colorado Denver (Anschutz), University Innovation Districts and Economic Development Districts and Economic Innovation

64 City and County of Denver Local Impact global reach

Figure 29. Cumulative R&D Expenditures, Colorado Institutions, by R&D field: FYs 2005–14, in Thousands of 3

US Dollars Innovation Districts and Economic Development

Colorado C.

U. Northern Colorado

U. Colorado Colorado Springs

Colorado School of Mines

Colorado State U., Fort Collins

U. Colorado Boulder

U. Colorado Denver / Anschutz Medical Campus

$0 $1,000,000 $2,000,000 $3,000,000 $4,000,000

Source: National Science Foundation

As an extension of the above chart, the following in support of higher education research and table highlights research and development development. While the US Department of expenditures linked to Federal Government Agriculture is a major supporter of CSU, it agency support. The table reinforces the plays a smaller role in support of research and importance of Department of Defense (DOD), development compared to other agencies. NASA< and the National Science Foundation

Figure 30. Federally financed higher education R&D expenditures, by federal agency: FY 2014 (Dollars in Thousands) All federal R&D Institution expenditures DOD DOE HHS NASA NSF USDA Other U. Colorado Boulder 314,890 26,422 19,743 45,445 86,500 75,806 260 60,714 U. Colorado Denver/ 285,017 12,042 285 252,903 108 3,667 1,217 14,795 Anschutz Med. Campus Colorado State U., Fort 212,054 44,721 12,743 42,545 7,649 33,345 31,220 39,831 Collins Colorado School of 34,781 5,173 14,063 1,821 1,094 10,671 146 1,813 Mines U. Colorado, Colorado 4,018 1,991 0 407 0 1,620 0 0 Springs U. Northern Colorado 1,965 29 8 327 38 1,246 87 230 Colorado C. 570 0 0 0 0 308 5 257 Sub-Total 853,295 90,378 46,842 343,448 95,389 126,663 32,935 117,640

Source: National Science Foundation

September 2016 65 National Western Center

Trajectory of Agricultural Technology as this sector broadens, from a pre-recession 3 Venture Capital focus on genetics and biofuels. Increasingly, the sector is benefiting from trends associated Within broader conversation about venture with convergence across several technologies capital funding nationally, opportunities linked which touch on communications, energy, sensors, to agriculture and technology are growing analytics, drones, food, and related areas. rapidly, according to sources such as AgFunder. Geographically, while the majority of AgTech VC As shown in the following table, Agtech venture is unfolding in California ($1.2 billion in 2015), capital (VC) investments have nearly doubled states such as Colorado are competitive within from $2.4 billion in 2014 to $4.6 billion in 2015, the top five for current activity, along with North Carolina, Massachusetts, and New York.

Figure 31. Total U.S. Ag Tech Investment

$5,000,000,000 $4,500,000,000 $4,000,000,000 $3,500,000,000 $3,000,000,000 $2,500,000,000 $2,000,000,000 $1,500,000,000 $1,000,000,000 $500,000,000 $0 2010 2011 2012 2013 2014 2015

Source: AgFunder

The following chart summarizes the breakdown delivery services. Drones and robotics appear to of 2015 Ag Tech investments by sector, with be one area where there is considerable growth Innovation Districts and Economic Development Districts and Economic Innovation sectors such as Food E Commerce and Irrigation potential, linked in part to the emergence of & Water leading in terms of deals announced “precision agriculture” over the past 20 years. in 2015. The E Commerce sector includes specialized meal delivery services and E-grocery companies, as opposed to restaurants with

66 City and County of Denver Local Impact global reach

Figure 32. Breakdown of 2015 Ag Tech Investments 3 Innovation Districts and Economic Development

Smart Equipment & Hardware Animal Nutrition & Health Cannabis Farm to Consumer Indoor Agriculture Waste Tech Food Safety & Traceability Food Tech Miscellaneous Sustainable Protein Soil & Crop Technology Biomaterials & Bio Chemicals Decision Support Technology Bioenergy Drones & Robotics Irrigation & water Food E-Commerce $0 $500,000,000 $1,000,000,000 $1,500,000,000 $2,000,000,000

Source: AgFunder

While AgTech has seen considerable growth, it is instruments, analysis and collaboration tools. important to appreciate that these investments Our research also suggests that: represent a very small share of aggregate US venture capital funding, which was in excess of zz The increasing reliance on advanced testing $60 billion in 2015, according to PWC. Given the equipment is leading to greater requirements volatile nature of VC spending, with investors for the use of flammable solvents in labs. focused on ideas that can generate returns, International building codes tend to require short-term trajectories are not necessarily that flammable liquids be stored in “control indicative of long-term outcomes. areas” within buildings. In general, codes mandate that as buildings get taller (beyond 5 stories) the amount of space that can be Lab / Research Facility Implications dedicated to control areas gets smaller. In practice, these regulations tend to encourage A review of industry literature related to lab lab and research buildings to be shorter (less development suggests that the emergence of than 10 stories in height). a new generation of scientists now entering the workplace is gradually advancing trends toward zz Building Codes also speak to additional greater flexibility and connectivity in lab space ventilation requirements for lab buildings requirements. A typical lab in the life sciences which also tend to increase construction industry devotes 49% of its square footage to costs. The power requirements that support wet lab space and just 19% for technology and extensive ventilation are one reason why lab 7% for collaboration. Furthering the notion of buildings can be more difficult to qualify for the need for increased collaboration space, it is LEED status. estimated researchers will spend 30% more time zz Bio-security Level (BSL) 3 buildings are in meetings and their offices and 20% less time needed for animal pathogen research and in their laboratories by 2020. By 2030, sources food safety research. Resulting building such as CBRE are identifying trends that point to security requirements can have land use and the need for more open and flexible labs, linked site design implications. in part with further development in modeling, AI,

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Innovation Success Factors 4. A competitive environment, with linkages 3 to other regions, and an ability to attract Innovation Districts are increasingly seen as skilled employment, which is driven by area an essential step in the leveraging of federal amenities and quality of life features, as well funding for research in the plant and life sciences as existing area companies. These amenities to spin off ideas into private sector opportunities. are important, both in initially attracting These placed-based environments become key qualified employees, and keeping them for ingredients in innovation, as immediate proximity the long haul. creates opportunities for “accidental collisions” 5. Creation of local networks for information or “deliberate serendipity” between people. Key exchange. These networks need to factors in achieving success with innovation-led evolve into more complex linkages economic development efforts include: between companies, as well as with 1. A local university presence, with a more their subcontractors. To the extent that aggressive focus on creating links with confidentiality and proprietary structures industry and commerce, both formally and are in place to prevent information flow, informally. Universities are important to R&D these linkages will have more difficulty for several reasons. First, they are a source forming. Such links and networks also of new knowledge, particularly in basic have an informal social component, as science. Second, they offer the chance to employees meet for social functions, talk, create/train a local base of scientists and exchange ideas, etc after business hours. engineers with appropriate skills. Third, Social networks become a key source of they can more aggressively support spin-off information exchange as well. development, by allowing professors to 6. The need for a regional approach to develop outside research projects and new economic development and R&D attraction, independent start up companies. Research combined with local understanding suggests that universities who focus largely of existing area R&D activities, and a on academics have a more difficult time willingness to create policies at the local facilitating these linkages with the private level which foster additional regional sector. economic linkages. Bureaucratic issues and 2. For R&D activity to generate significant new regulations can inhibit innovation and R&D spin-off job and business creation, there success. needs to be a local culture of innovation, 7. The time factor – the most successful R&D with official and unofficial links between complexes, such as Silicon Valley, have companies, and to other markets. For taken many years (more than 10) to form and Innovation Districts and Economic Development Districts and Economic Innovation the Front Range, access to Silicon Valley mature, suggesting that the critical need is to matters. put the pieces in place and then let the kettle 3. Access to pools of venture capital, which stew. is critical to support innovation. Traditional 8. Access to government research and lenders (pension funds and banks), are development contracts. With changes in generally pre-disposed to target existing federal legislation, which now allow research concentrations of R&D for further investment. conducted for government goals to benefit Areas that do not have an existing base of the private sector, the likelihood for spin off’s R&D have a more difficult time attracting is now greater. venture capital. This is strictly a function of 9. The nature of the local economic base also risk and reward; existing R&D concentrations defines potentials for R&D, particularly if the have a track record that the bankers can base is driven by industries that are stable or look to. Initial public sector efforts to create growing versus declining. The extent of local local venture capital pools were marginally control in key industries is also a factor. successful, in part because the public sector has a more difficult time choosing winners and losers, compared to the market.

68 City and County of Denver Local Impact global reach 3 NWC Implications zz Findings in Veterinary Science may inform Healthcare & Wellness for humans. Innovation Districts and Economic Development Innovation-linked economic development zz Energy combined with Agriculture may opportunities at NWC align with opportunities lead to more efficient biofuels and reuse of to converge research & development in several agricultural and food production bi-products. industry clusters: zz Financial services may create new zz Aviation & Information Technology Industries, investment vehicles to finance sustainable combined with Agriculture, may create new agricultural practices. methods for researching, monitoring, and zz Telecommunications, Information Technology managing agricultural resources, crops, land, and Agriculture may be combined to help and water. farmers worldwide better manage resources zz Bioscience, Healthcare & Wellness combined and create more efficient food delivery with Agriculture, including bovine, may lead chains by providing advisory services to healthier food products and diets, and new and transferring expertise from centers of animal husbandry techniques. knowledge, of which the NWC may be one.

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Private Sector 4 Opportunities National Western Center

4 INTRODUCTION The Colorado State University (CSU) Agricultural research, testing, and medical labs. In St. Louis, Value Chain approach is one of few national the Plant and Life Sciences cluster was grown by examples where a region has focused on adding a deliberate, well-funded and supportive network value across the entire food production chain. of collaborative organizations and institutions, Distinct regional focus on the “Agricultural Value as well as private sector firms such as Monsanto Chain” reflects an expansive view of industry over a 20-year period. clusters that other regions have prioritized. As one example, the St. Louis Region has focused The following chart summarizes clusters that on the Plant and Life Sciences cluster, which make up the Agricultural Value Chain as defined includes agricultural feed stocks and chemicals by CSU. Each Cluster includes an array of (including bio-fuels); drugs and pharmaceuticals; discrete North American Industrial Classification medical services & devices / equipment; and codes (NAICS).

Value Chain Cluster Component NAICS Codes Statewide Insight Mining, Fertilizer MFG, Water treatment, Significance of Scientific R&D and Direct Agricultural Agricultural implements, machinery, Veterinary Services adding 3,800 jobs Inputs Scientific R&D, and Veterinary Services since 2009 Crop and animal production; Logging, Crop Production, Animal Agricultural Production Covered employment excludes sole Private Sector Opportunities Sector Opportunities Private Production, Support Activities, proprietorships Farm Product Wholesale, Animal Food, Slaughtering, Beverages, and Bakeries Processing, and Grain Milling, Food Processing, Dairy, are big; Dairy and Packaging are Manufacturing, Confectionery Products, Bakeries, Soft interesting Drinks, Breweries, Wholesale activities seem “under- Refrigerated Storage, Wholesale Meat, Wholesale Food weighted” regionally; generally more Cheese, Beer, Fruit, etc. cost sensitive. Grocery, Meat Market, Restaurants, Food services and drinking places, large Retail Food Landscaping Services, Florists, Bars, employer Liquor Stores, Cafeterias Water infrastructure, testing, software, Indirect Agricultural aerospace, energy, laboratories, Notable growth in companies with Input Sectors construction, engineering & consulting connections to agriculture since 2010 services

72 City and County of Denver Local Impact global reach

Figure 33. Value Chain 4 Private Sector Opportunities

Source: Colorado State University

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4 METHODOLOGY Taking the analysis one step further, AECOM as true today due to company or industry took a deeper dive into specific 5-6 digit NAICS restructuring. code level industry sectors, with a twin focus on zz Within some NAICS codes there are firms traditional agricultural and food-related sectors, who clearly provide both ag-related and non- as well as a broader set of industries which ag-related business activities. provide support to agriculture. The analysis is focused on the 2009 to 2014 period (3rd quarter), As one example, within the indirect agriculture for two specific geographies: related sectors about 7,270 jobs were associated with specific companies that are agriculture zz The State of Colorado related, against a statewide total of 313,056 zz A 16-county area defined as “the Front Range” jobs (2014 Q3) in these sectors. For the above reasons, it is very likely that our initial tabulations The 2009 to 2014 time period was selected as it will under represent the number of firms engage reflects a low point in US economic activity due to in direct or indirect ag-related activities. Specific the “Great Recession”. As such, it is a clear point sectors of concern include financial services of demarcation in economic terms for regions such & banking, software development, drones and as the Front Range. For the purposes of this report, aerospace, plant genetics, testing and sensors. AECOM used the most authoritative data available, the Quarterly Census of Employment and Earnings The analysis refers to location quotients, which (QCEW), along with employer data provided by are ratios that allow an area’s sector employment Private Sector Opportunities Sector Opportunities Private information from the Colorado Department of Labor distribution to be compared to that of a larger and Colorado State University (CSU). The resulting area typically the state or nation as a whole. dataset includes more than 34,000 firms as of the Metropolitan areas that support ratios for specific third quarter of 2014. Importantly, most of these sectors that are greater than 1.0 are said to have firms have self-reported their industry category a greater local share of employment in a given (NAICS). Of practical concern are two points: sector compared to the national average. The analysis uses the “Compound Annual Growth zz Firms may have self-selected an appropriate Rate (CAGR)” approach in calculating percent NAICS code in the past, which may not be change to reflect an annualized rate of change, as opposed to a simple percent change calculation.

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PRIORITY CLUSTERS Private Sector Opportunities Figure 34. Agriculture-Related Cluster: Financial Services

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Other Non- 522298 depository Credit 1,027 1,871 194 10 $1,295 1.57 505 580 31% Intermediation 522292 Real Estate Credit 5,221 5,273 360 15 $1,805 1.48 3 19 0% Portfolio 523920 4,050 6,137 543 11 $2,370 1.89 0 7 0% management Direct health & 524114 medical insurance 3,651 4,471 73 61 $1,362 0.69 0 2 0% carriers Insurance 524210 Agencies & 10,755 12,095 3,262 4 $1,131 0.96 0 1 0% Brokerages zz This cluster includes financial firms that banks provide loans to farmers, but it is not provide services to the farming and easy to identify the share of every bank’s agriculture sectors along the Front Range. employees that are dedicated to farm zz The Front Range job estimates likely under- lending. represent the number of people working zz More research in this cluster is needed in ag-related sectors, as a large number of

Figure 35. Agriculture-Related Cluster: Animal Health Research & Testing

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Biotech 541711 Research & 1,661 1,836 146 13 $1,878 0.7 1,650 1,951 100% development Other physical 541712 and biological 11,048 11,443 418 27 $2,333 1.5 10,941 11,352 99% research Veterinary 541940 6,799 7,899 772 10 $676 1.35 5,819 6,843 87% services Testing 541380 1,631 1,841 205 9 $1,067 0.61 165 184 10% Laboratories Offices of 621111 32,529 33,828 2,905 12 $1,642 0.79 0 28 0% Physicians Medical 621511 2,026 3,135 277 11 $1,053 0.97 28 32 1% Laboratories zz This Front Range cluster saw growth of almost 1,800 jobs between 2009 and 2014

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zz Research and development related to bio- zz Across Colorado, these sectors added more 4 technology is heavily concentrated along the than 4,000 jobs since 2009 Front Range

Figure 36. Agriculture-Related Cluster: General Office

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Offices of Real 531210 Estate Agents 6,032 7,123 3,799 2 $1,139 1.39 4 3 0% and Brokers Offices of 541110 16,553 16,512 3,604 5 $1,618 0.9 15 7 0% Lawyers Offices of 541211 Certified Public 6,656 7,765 1,393 6 $1,506 1.04 1 2 0% Accountants Accounting, tax prep, 541213 bookkeeping, 780 871 489 2 $506 0.92 4 5 1% & payroll Private Sector Opportunities Sector Opportunities Private services Other 541219 Accounting 5,818 6,036 1,447 4 $1,161 1.41 91 75 1% Services Administrative Management 541611 5,312 13,410 5,074 3 $3,354 1.6 17 15 0% and Consulting Svcs Marketing 541613 Consulting 2,249 10,412 2,372 4 $2,360 2.92 0 22 0% Services Corporate, Subsidiary, 551114 and Regional 26,545 33,600 1,806 19 $2,033 0.92 2,029 2,724 8% Managing Offices Temporary 561320 26,342 45,114 1,161 39 $620 0.89 53 23 0% Help Services Prof & management 611430 1,692 1,684 408 4 $1,329 2.26 6 4 0% development training Conservation 813312 & Wildlife 1,555 1,971 167 12 $751 1.87 0 2 0% Organizations Business 813910 2,176 2,259 364 6 $1,146 1.08 135 154 7% associations Professional 813920 1,520 1,720 160 11 $1,281 1.19 74 64 4% Organizations

zz This cluster includes several sectors headquarters activities, others with financial that fall under “general office” activities, services and legal support. some commonly associated with regional

76 City and County of Denver Local Impact global reach 4 zz Statewide, these sectors added more than and is conservative. For example, a large

40,000 jobs since 2009. number of banks provide loans to farmers, Private Sector Opportunities zz In ag-related sectors for the Front Range, but it is not easy to identify the share of employment increased by more than 500 every bank’s employees that are dedicated positions. to farm lending. zz NAICS 551114: Corporate, Subsidiary, and Already headquartered in Denver are several Regional Managing Offices, is notable. This such organizations: sector includes companies which likely also have additional employment in the zz US potato association region, including research and testing. More research in this sector is needed zz Meat export federation zz Identified Front Range employment is zz Cattle fax associated with agriculture related activities,

Figure 37. Agriculture-Related Cluster: Grains

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Oilseed and 1111 609 857 164 5 $698 0.82 251 365 43% grain farming Grain and 3112 286 375 15 25 D D 205 368 98% oilseed milling Bread and 31181 bakery 2,810 3,928 164 24 $634 1.01 2,684 3,705 94% product MFG Cookie, 31182 cracker, and 435 357 18 20 $1,164 0.37 444 355 99% pasta MFG 31183 Tortilla MFG 566 533 24 22 $693 1.64 534 506 95% Grain and field bean 424510 698 663 64 10 $865 0.77 206 166 25% merchant wholesalers zz Grains production and processing, and zz This cluster has important connections associated manufacturing are viewed as a into beverage manufacturing, as well as a strategic sector for the state. number of food related areas, including pet zz These sectors added more than 1,300 food production. jobs statewide, with a majority of growth concentrated along the Front Range

Figure 38. Agriculture-Related Cluster: MFG - Beverages

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Colorado Front Range 4 Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs 312111 Soft drink MFG 1,586 1,508 16 94 $990 1.17 1,602 1,495 99% Bottled water 312112 236 296 16 19 $860 1.22 206 260 88% MFG 312113 Ice MFG 107 100 8 13 $731 0.7 85 112 112% 312120 Breweries 3,145 4,122 126 33 $1,117 5.53 3,040 3,770 91% 312130 Wineries 173 320 44 7 $377 0.3 64 171 54% 312140 Distilleries 19 218 28 8 $556 1.13 10 119 55% Glass and 3272 glass product 987 1,052 44 24 $1,148 0.72 952 1,021 97% MFG

zz These processing and manufacturing sectors zz This cluster has added > 900 jobs since are heavily reliant on water; 2009 zz While sectors such as soft drinks, ice, and zz The Pepsi bottling plant is located in the core bottled water are mature, sectors such as study area, and reportedly serves a multi- Private Sector Opportunities Sector Opportunities Private beer, wine, & spirits have grown significantly state trade area for distribution; Coke also since 2009. maintains a distribution center in the broader area of influence

Figure 39. Agriculture-Related Cluster: MFG - Dairy / Cattle

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Beef cattle 112111 ranching and 829 1,025 210 5 $626 1.63 227 280 27% farming 112112 Cattle feedlots 1,144 1,103 79 14 $703 4.43 346 290 26% Dairy cattle 112120 and milk 2,032 2,573 95 27 $655 1.44 1,448 1,898 74% production Hog and pig 1122 693 699 9 78 $703 1.26 7 0 0% farming Poultry 1123 and egg 294 385 26 15 $686 0.55 173 211 55% production Sheep and 1124 116 117 15 8 $557 4.39 68 75 64% goat farming Dairy product, 31151 except frozen, 1,774 2,113 21 101 $1,280 1.05 1,372 1,629 77% MFG Ice cream and 31152 frozen dessert 154 167 9 19 $1,051 0.45 179 159 95% MFG

78 City and County of Denver Local Impact global reach 4 Colorado Front Range Private Sector Opportunities Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Animal slaughtering 3116 7,839 7,260 70 104 $641 0.85 5,638 4,925 68% and processing zz This cluster includes cattle and dairy activities zz This cluster has significant connections in direct agricultural inputs, agricultural into animal health, nutrition, and herd production and processing and manufacturing management; sensors, testing, and analytics zz This cluster has seen slight increases in for product quality and biosafety; and dairy employment, both statewide and across the production and dairy product manufacturing. Front Range. zz Access to water and related infrastructure is important

Figure 40. Agriculture-Related Cluster: MFG - Sensors & Instruments

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Radio / TV broadcasting, wireless 334220 290 509 22 23 $1,750 0.55 41 190 37% commun- ications equip MFG Electro- medical & Electro- 334510 3,006 3,193 25 128 $1,633 3.26 7 13 0% therapeutic Apparatus MFG Instruments MFG for Measuring, Displaying, 334513 1,019 1,300 29 45 $1,379 1.16 284 311 24% and Controlling Industrial Process Electricity and signal 334515 1,323 1,291 33 39 $2,156 1.92 321 240 19% testing instruments Analytical Laboratory 334516 1,028 1,246 15 83 $1,405 2.08 758 827 66% Instrument MFG zz This cluster includes companies that make agriculture related activities (such as lab devices and components that support instruments and sensors).

September 2016 79 National Western Center

zz Statewide, this cluster added about 900 4 jobs, with fewer than 200 concentrated in the Front Range.

Figure 41. Agriculture-Related Cluster: MFG - Specialty Foods

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Dog and cat 311111 427 620 18 34 $1,056 1.54 381 533 86% food MFG Other animal 311119 482 494 33 15 $995 0.87 259 254 51% food MFG Sugar and 3113 confectionery 1,193 1,699 67 25 $570 1.35 381 625 37% product MFG Snack food 31191 661 669 21 32 $901 0.71 633 651 97% MFG Coffee and tea 31192 424 411 19 22 $1,013 1.2 354 363 88%

Private Sector Opportunities Sector Opportunities Private MFG Seasoning 31194 and dressing 242 405 9 45 $938 0.62 245 402 99% MFG All other food 31199 835 1,098 60 18 $767 0.88 821 1,064 97% MFG

zz Seven processing and manufacturing sectors zz This cluster has added about 800 jobs are grouped as a specialty foods cluster across the Front Range since 2009 zz Water is important to the production process

Figure 42. Agriculture-Related Cluster: Agriculture Potato Production

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Potato 111211 1,766 1,548 77 20 $523 3.7 52 74 5% Farming

zz While Potato Farming is not concentrated zz The primary question is whether or not there along the Front Range, the sector is highly are in-state opportunities to add value to raw concentrated in the State of Colorado potatoes that are being grown in state. (LQ>3.0)

Figure 43. Agriculture-Related Cluster: Software

80 City and County of Denver Local Impact global reach 4 Colorado Front Range Private Sector Opportunities Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Software 511210 11,064 11,505 411 28 $2,378 2.07 234 380 3% Publishers Custom Computer 541511 15,312 20,721 3,256 6 $1,933 1.51 6 4 0% Programming Services Computer Systems 541512 21,016 27,443 4,309 6 $1,897 1.81 8 112 0% Design Services zz Software development cluster is a major on sectors related to aerospace (drones), employer for Colorado, with attractive medical devices, and manufacturing location quotients. zz For the Front Range, the above data likely zz Software is highly important in advanced under-estimates the number of agriculture- technology fields, with particular impact related software firms.

Figure 44. Agriculture-Related Cluster: Urban Vertical Agriculture

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Other 111219 Vegetable and 1,610 1,536 56 27 $576 0.94 1,135 1,124 73% melon Farming Greenhouse 1114 and nursery 2,496 2,061 155 13 $568 0.83 1,925 1,861 90% production zz Cluster is focused on the emergence of zz Cluster has largely remained static in job urban vertical farming (companies such as creation along the Front Range since 2009 FarmedHere, for example). zz Cluster is relatively concentrated along the Front Range

Figure 45. Agriculture-Related Cluster: Aerospace UAV Mapping

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Colorado Front Range 4 Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Detection, Aeronautical 334511 System & 2,625 2,607 11 237 $2,319 1.2 248 264 10% Instrument MFG Other Aircraft Parts & 336413 445 642 17 38 $1,427 0.34 11 9 1% Equipment MFG Geophysical surveying 541360 831 1,526 92 17 $2,017 4.51 802 1,568 103% and mapping services Surveying and Mapping 541370 1,481 1,679 250 7 $1,307 2.07 1,084 1,356 81% (except Geophysical) Private Sector Opportunities Sector Opportunities Private zz This cluster includes firms that produce zz The cluster added about 1,000 jobs across drones for agricultural purposes as well as the Front Range since 2009 firms involved in surveying and mapping zz This cluster has connections to software as services. well as advanced materials.

Figure 46. Agriculture-Related Cluster: Water Infrastructure Energy Engineering

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Water Supply/ Irrigation 221310 Systems 3,508 3,621 294 12 $1,987 2.56 2,764 2,810 78% - Public & Private Commercial and 236220 institutional 10,980 12,411 948 13 $1,249 1.26 31 15 0% building construction Water and 237110 sewer line 3,860 4,395 274 16 $1,034 1.45 188 332 8% construction Oil and Gas 237120 Pipeline 2,813 5,497 105 52 $1,267 2.13 0 0 0% Construction

82 City and County of Denver Local Impact global reach 4 Colorado Front Range Private Sector Opportunities Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Power and Communication 237130 2,541 3,745 196 19 $1,316 1.24 7 4 0% Line/ Construction Solar Energy - Residential 238221 Plumbing 8,601 10,418 1,698 6 $860 1.32 0 13 0% HVAC contractors Engineering 541330 31,794 33,278 2,754 12 $1,799 2.04 1,045 1,354 4% Services Other Scientific & 541690 3,622 7,154 2,218 3 $3,118 1.92 11 15 0% Technical Consulting Environmental 541620 Consulting 2,607 3,465 535 6 $1,324 2.32 2,307 3,068 89% Services zz Cluster added 17,200 jobs since 2009, with zz Influence of oil & gas may be significant. significant growth in scientific consulting More research is needed to identify services, as well as oil and gas. companies that are closely aligned with zz The Front Range saw a modest share of this either water, or provide support to potable growth, adding about 1,300 generally higher- water, as well as other utility sectors. Existing wage jobs over the same period. Areas Front Range jobs are likely under-estimated of emphasis for the Front Range include zz Energy generation, delivery, and construction Environmental Consulting Services, as well are important. A share of labor associated with as Water Supply and Irrigation systems these sectors is associated with construction. (public and private). zz There is general interest in broadening the zz Infrastructure related to water is the focus, energy conversation beyond biofuels to along with energy include solar and geothermal. This sector is one example; further research is needed, as local companies have not yet been identified.

Figure 47. Agriculture-Related Cluster: Wholesale food

Colorado Front Range Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs General line grocery 424410 3,544 4,238 115 37 $1,156 1.03 3,519 4,176 99% merchant wholesalers Packaged frozen food 424420 682 745 40 19 $1,143 1.48 610 669 90% merchant wholesalers

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Colorado Front Range 4 Front # of Firms Avg Firm Avg Weekly LQ Range %, NAICS Description 2009 2014 2014 Size 2014 Wage 2014 2014 2009 2014 2014 Jobs Dairy product (except dried 424430 canned) 374 401 45 9 $934 0.55 327 355 89% merchant wholesaler Poultry 424440 merchant 0 205 9 23 $828 1.06 125 207 100% wholesalers Confectionery 424450 merchant 720 995 89 11 $1,303 1.06 597 877 88% wholesalers Fish & seafood 424460 merchant 0 148 15 10 $1,023 0.33 100 141 95% wholesalers Meat and meat product 424470 615 777 82 9 $975 1.12 557 687 88% merchant wholesalers Private Sector Opportunities Sector Opportunities Private Fresh fruit & vegetable 424480 1,221 1,249 52 24 $882 0.78 905 1,027 82% merchant wholesale Other grocery & related 424490 3,573 3,966 329 12 $970 1.02 2,817 3,346 84% merchant wholesale Beer and ale 424810 merchant 1,565 1,353 52 26 $1,032 0.72 1,314 1,106 82% wholesalers Wine, distilled alcoholic 424820 beverage 1,799 2,021 120 17 $1,284 1.44 1,638 1,925 95% merchant wholesale Farm Supplies 424910 Merchant 2,168 2,804 219 13 $1,122 1.4 1,292 1,762 63% Wholesalers

zz The wholesale cluster added 2,600 jobs zz Food related wholesale is seen as an between 2009 and 2014, with the majority of opportunity for the area of influence. that job growth concentrated along the Front zz IT linkage with logistics and distribution will Range. grow in importance in the future. zz Wholesale growth opportunities do link with the ability of local firms to expand distribution to other regional and global markets. For export opportunities, connections with logistics and distribution firms matter.

84 City and County of Denver Local Impact global reach 4

CORE FINDINGS Private Sector Opportunities The above matrix table highlights clusters that drove creation of more than 10,000 jobs since 2009. The table includes clusters that appear to be clear elements of an NWC strategy, including:

1. Water, Infrastructure, Energy, and related Engineering 2. Aerospace, UAV, and mapping related activities 3. Cattle, Dairy, Animal Health and Testing 4. Manufacturing, related to specialty foods and beverages NWC Implications

The above table also includes sectors for which more research is needed to ascertain industry- to-industry connections, as well as place-based opportunities associated with anticipated future development in the area of influence. As one example, in 2016 CSU undertook research related to the development of nutrient rich “purple potatoes”. Sectors of emerging interest include:

1. Energy (Renewables, solar, geothermal, bio-fuels) 2. Grains & Potatoes 3. Agricultural financial services 4. Software 5. Production, event and exhibition services 6. Supporting Retail and Services

Maps on the following pages summarize the geographic extent of each cluster across the Front Range

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Figure 48. Employment Density (2014) Aerospace UAV Mapping 4

Larimer

Weld

Boulder

Broomfield Private Sector Opportunities Sector Opportunities Private Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

Elbert Douglas

Park

Teller El Paso

Fremont

Pueblo

86 City and County of Denver Local Impact global reach

Figure 49. Employment Density (2014) Animal Health Research 4 Private Sector Opportunities

Larimer

Weld

Boulder

Broomfield Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

Elbert Douglas

Park

Teller El Paso

Fremont

Pueblo

September 2016 87 National Western Center

Figure 50. Employment Density (2014) Financial Services 4

Larimer

Weld

Boulder

Broomfield Private Sector Opportunities Sector Opportunities Private Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

Elbert Douglas

Park

Teller El Paso

Fremont

Pueblo

88 City and County of Denver Local Impact global reach

Figure 51. Employment Density (2014) General Office 4 Private Sector Opportunities

Larimer

Weld

Boulder

Broomfield Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

Elbert Douglas

Park

Teller El Paso

Fremont

Pueblo

September 2016 89 National Western Center

Figure 52. Employment Density (2014) Grains 4

Larimer

Weld

Boulder

Broomfield Private Sector Opportunities Sector Opportunities Private Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

Elbert Douglas

Park

Teller El Paso

Fremont

Pueblo

90 City and County of Denver Local Impact global reach

Figure 53. Employment Density (2014) MFG - Beverages 4 Private Sector Opportunities

Larimer

Weld

Boulder

Broomfield Gilpin Adams NWC

Clear Creek Denver Arapahoe Jefferson

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Figure 54. Employment Density (2014) MFG - Cattle Dairy 4

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Figure 55. Employment Density (2014) MFG - Sensors Instruments 4 Private Sector Opportunities

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Figure 56. Employment Density (2014) MFG - Specialty Foods 4

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Figure 57. Employment Density (2014) Potatoes 4 Private Sector Opportunities

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Figure 58. Employment Density (2014) Software 4

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Figure 59. Employment Density (2014) Urban Vertical Ag 4 Private Sector Opportunities

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Figure 60. Employment Density (2014) Water Infrastucture Engineering 4

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Figure 61. Wholesale Food 4 Private Sector Opportunities

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End Market 5 Opportunities National Western Center

5 INTRODUCTION AECOM identified specific local and global end The market potentials are driven by markets with the ability to support growth across technological advances, demographic, and an array of industry sectors. These markets economic trends. Technology trends as well as were identified through a literature review of Front Range specific Innovation Clusters were leading industry reports on high growth markets, specifically highlighted as market enablers. cutting-edge technology, and demographic and The End Market Analysis considered the effects economic trends. This literature review included of both enabling technologies and enabling analyzing the effects of the Front Range’s innovation clusters. Technology trends were Agricultural Innovation Clusters. Once identified, specifically influential in discerning market a ten-year (2016 to 2025) market potential for potential. Ten enabling technologies were each end market was estimated. identified:

Local Markets: zz 3D Printing/Additive Printing zz Advanced Materials zz Local Food Demand - General zz Advanced Sensors zz Local Food Demand - Restaurants / Fresh & Fast zz Big Data Analytics

End Market Opportunities End Market Opportunities zz Urban Walkable Housing Demand zz Cloud Software and Applications zz Internet of Things Global Markets: Energy zz Logistics zz Renewable Energy: Overview zz Semiconductors zz Renewable Energy: Solar PV zz Software Analytics zz Renewable Energy: Wind zz Water Technologies zz Renewable Energy: Bioenergy These technologies are driving growth in a z Energy Storage z variety of markets through industry supply zz Microgrids chains, and are being leveraged to foster innovation, lower costs, and create new products. Global Markets: Transportation For example, 3D printing can use advanced zz Autonomous Vehicles materials such as powdered metals / composites to build prototypes cheaper and faster; zz Electric Vehicles warehouse inventory data can be collected using zz Commercial Aviation advanced sensors and stored and analyzed zz Drones in the cloud using big data analytic tools and improving logistics. End markets with several zz Public Transit: Rail opportunities for these types of technological Global Markets: Technology synergies have a particularly strong growth potential over the next ten years. zz Biomedical Devices zz Cloud Computing zz Smart Home Devices zz Wearable Technologies

102 City and County of Denver Local Impact global reach 5 End Market Opportunities Encourage local development of new restaurant concepts that can be “exported” globally Local Local Positioning Food Consumption billion $150.4 Consumption Food At-Home Total billion $90.4 Fruits & Veggies billion $20.2 Meats, poultry, fish, and eggs billion $17.8 Cereals & Other Bakery Products billion $10.2 Dairy & Products billion” $9.8 Alcoholic Beverages billion $10.9 Out-of-home Food Consumption $60 billion Fresh & Fast - Out of Home Food Consumption Fast & Fresh: $6.2 billion 10 Year Front Range Market Front Range 10 Year Potential Need for high quality of food with no use pesticides resistant crop demand Weather Global Agricultural Products demand: demand for agricultural products is projected to continue rising from 2015 through 2024 (USDA). Food Demand: According to a recent report by industry leaders, local Local food demand in the US grew at 21% annually from 2005 to 2015 $7 billion. Urban population to grow at 1.84% annual from Growing Urban Population: Health Organization). annual from 2020-2025. (World 2015-2020 and 1.63% Nearly 280 million new urban households in 2025 globally. Farming US market potential: According to a recent report by Vertical of over $9 billion industry leaders, total US Market Potential capita consumption growth: According to the PBH Foundation, fruit and Per vegetable consumption per capita is expected to grow at 5% and 4% annually, respectively. According to the PBH Foundation, older adults consumer Aging Population: more produce. As the population continues to age, per capita produce consumption may continue to rise. Changing Consumer Behavior: Consumers are demanding more transparency when making food purchases. They are also more health conscious and aware of the environmental impacts conventional farming methods, leading to a growing demand for organic products. Changing Consumer Behavior: Consumers are demanding more transparency when making food purchases. They are also more health conscious and increasingly drawn to quality over quantity in their food purchasing. Supporting Growth Indicators

Local expenditures on food will continue to grow as the Front Local population grows. Much of the demanded food can be Range produced in the region. New farming techniques and practices and technologies such as advances in pest control, water technologies, urban farming and vertical farming, can help meet this need. Changing consumer demands towards natural, organic, and local foods will help the region capture more of this market. Additionally, a trend towards processing foods closer to end markets will also allow the region capture a greater share of the local food market potential. Demand for organic products has seen strong growth over Journal, organic Street the past decade. According to Wall annual growth between 2003 and 2013, food sales saw a 11.6% reaching $32.3 billion in sales. This trend continued into 2014, as sales jumped to $35.9 billion (11% growth) (Organic Trade organic food represents 5% Association). According to the OTA, Produce is of total food sales today, up from under 1% in 1997. the largest selling organic category, accounting for 12% of all produce sales today, up from 5% in 2004 (OTA). Most Fast & Fresh dining options fall into the category of this market Post, Casual dining. According to the Washington accounted for 1% of restaurant traffic in 2000 and grew to 5% in 2014. If this growth trajectory continues, the market could the market is reach 20% of restaurant sales by 2025. However, restricted by supply chain limitations, specifically in relation to as consumers organic and local ingredients sourcing. However, continue to demand higher health and transparency standards from their food purchases, Fast & Fresh dining options will be able to redesign supply chains meet quality needs. This has already occured in some organic food production supply chains. Description

/ Fresh & Fast & Fresh /

Local Food Demand - General - Demand Food Local Local Food Demand - Restaurants Restaurants - Demand Food Local

End Sector Local Markets Local

September 2016 103 National Western Center 5 Walkable Walkable housing adjacent to transit Opportunity Local Local Positioning $3.5 Billion in new “”urban / walkable / TOD housing construction Global Market 10 Year Potential trillion $2.7 trillion $1.0 10 Year Front Range Market Front Range 10 Year Potential End Market Opportunities End Market Opportunities Global Population Growth Global Population Housing: Over the next 10 years, we Growing demand for Urban Walkable new households demanding urban walkable estimate there will be over 13,000 housing in the Front Range. It is estimated that urban population will grow at Growing Urban Population: annually from 2020-2025. (World 1.84% annually from 2015-2020 and 1.63% Health Organization). Nearly 280 million new urban households in 2025 globally. Millennials: Increase demand for walkable living conditions. Changing Housing Demands: 59% of the 22 million new US households that will form between 2010 and 2030 rent, while just 41 percent buy their homes. This change will create a surge in rental demand from now until 2030 that we are unprepared to meet (Urban Institute). Supporting Growth Indicators Installations: The cost of installments for Decreasing Cost of Renewable renewables is projected to decrease due factors such as advanced in necessary materials and improved manufacturing techniques. Government regulation of carbon emissions will Government Regulation: continue to drive the installation of renewable capacity. sustainable Sustainability: Consumer and constituent demand for cleaner, energy sources will drive capacity growth. Demand in Emerging Economies: According to the International Energy Agency, renewable Energy will be the largest source of electricity growth largely do to new capacity installments in emerging economies. through 2020, Growth in Solar Installations: Annual solar installments are expected to grow the fastest of any renewable energy source, at an annualized rate around 8%, leading solar to account for over a third of new installments in 2025. Supporting Growth Indicators

Description Urban populations are expected to grow between 1.6% and 2% Urban populations are expected to grow between 1.6% it is predicted that 2 a year through the next decade. By 2050, billion more people will live in urban areas. there is growing demand for housing For the Front Range, options that offer expanded walkability and access to transit. Data suggests that currently only roughly 4% of the Front population lives within neighborhoods that are defined Range as “”urban walkable””. Demand for urban housing touches several end markets, public transit, and energy including the construction sector, markets. Elevators and Esclators are one area that should see strong growth due to urbanization trends. Furthermore, new smart elevator technologies will open market opportunities. Smart elevators use advanced systems to move people or goods up and down a building. Using advancements in sensor and network connection technologies, smart elevators function more efficiently, comfortably, quickly, and securely. Smart elevator features can included biometric security systems, destination dispatching, and capacity monitoring. There is a large movement towards the use of low carbon carbon resources energy resources for electric generation. Low include energy efficiency measures, storage, nuclear energy is a energy, and renewable energy. Renewable broad sector that encompasses many technologies such as solar photovoltaics, wind turbines, bioenergy, geothermal, and anaerobic digestion. The most prevalent renewable generation technologies for electricity are solar photovoltaics and wind turbines, but new technologies are constantly being researched. According to Bloomberg, renewable energy will make up nearly 64% of global new capacity installments in at the potential for Solar 2025, up from 50% in 2015. Looking Wind, and Bioenergy, the ten year market potential is $2.7 PV, trillion. to capture energy from the sun have existed Technologies since the 19th century, but it wasn't until 1950s that a solar photovoltaic (PV) device could capture a useable amount of energy. Since this time, scientists have worked to increase Today, efficiency and reduce costs of these technologies. the cost of solar PV technologies are continuing to fall while efficiencies increase. This combination is leading to the rapid growth of capacity installations around the world. Description

Overview PV Solar Energy:

Urban Walkable Housing Demand Housing Walkable Urban

Renewable Energy: Energy: Renewable Renewable

End Sector End Sector Local Markets Local Energy - Markets Global

104 City and County of Denver Local Impact global reach 5 End Market Opportunities $920 billion $750 billion $150 billion $270 billion Growth in Wind Installations: Annual wind installments are expected to remain stable over the next decade. Growth in Biofuels Consumption: consumption is expected to continue to grow at a faster pace than other bioenergy sources. Generation Growth: The continued growth of renewables for Renewable utility-scale generation, micro grids, and distributed (i.e., decentralized) generation is rapidly increasing the need for energy storage to balance intermittent power generation. Improvements: Battery technologies are become more efficient, Technology effective, and cheaper. and Federal governments as well State, Changing Opinions: Local, corporations are placing a higher value on resilient infrastructure. Microgrids are a key tool in improving the resiliency of power grids. generation installment costs are Declining Component Costs: Renewable decreasing as are other component costs, the overall cost of microgrid installation. the market Growth in Component Markets: According to Navigant Research, for energy storage microgrids was worth $662 million in 2014 and will soar to over $4 billion in the next 10 years. Likewise, distributed generation for billion in 2023. The strong microgrids will grow from $1.8 billion in 2014 to $9.6 growth of these component markets will drive equally strong in the microgrid market. Needs Reliability

Harnessing the power of wind through turbines has long been used as a source of energy. Over the past 35 years, alone has installed nearly 66 GW of wind capacity. the U.S. Bloomberg predicts that wind energy will continue to play an important role through 2025, continuing to account for roughly 10% of all new capacity installments and about 25% low carbon capacity. Bioenergy is created by burning biomass directly or converting biomass into liquids and gases to generate energy. Throughout the world, direct burning of wood for heating and cooking is the most common use of bioenergy. However, technologies to convert other biomass energy are being with a third of global food and improved upon. For example, Canada, New Zealand, and the over 50% of food in Australia, being wasted, technologies like anaerobic digestion which U.S. converts waste to biogas are being refined. Processes for refining biofuels like ethanol are also being improved. In the consumption of biofuels is the fastest growing category U.S., of biomass consumption, growing at 17% annually since 1981, annually for compared to 6% annual for biowaste and -0.3% wood. Growth in biofuels consumption has slowed over recent years to a more sustainable 3% annualized growth rate. At this rate, annual consumption of biofuels could reach over 2,900 trillion btus by 2025. New and improved ways to store energy have been sought since the discovery of electricity. Energy storage technologies can create cost-savings for consumers and provide ancillary services, such as balancing, to improve the resiliency of electricity grids. Some technologies, such as pumped hydro, technological have been used since the 1920s. Recent advances allowing for quicker recharge and discharge are becoming cost-effective. These technologies include batteries, thermal storage, and even electric flywheels, compressed air, vehicles. A microgrid is composed of generation, energy management, and transmission/distribution resources that serve a specific area and can operate disconnected from the main grid. There are many components of a microgrid, including transformers, generation, energy storage, and control systems. Industries, such as defense and healthcare, grid operators, remote locations enjoy increased reliability and other ancillary benefits through microgrids.

Energy: Wind Energy:

Renewable Energy: Bioenergy Energy: Renewable Storage Energy Microgrids

Renewable Renewable Global Markets - Energy - Markets Global

September 2016 105 National Western Center 5 Opportunity $210 billion trillion $2.1 $100 billion $2 trillion 10 Year Global Market 10 Year Potential End Market Opportunities End Market Opportunities Consumer Demand: 55% of US consumers would buy a semi-autonomous car cars can increase safety, and 44% of fully autonomous car (BCG). Autonomous reduce congestion, open up mobility to aging and handicapped populations, and open the door for new commercial growth (e.g. semi-trailers reduced freight costs). Market: The overall lightweight vehicle market is General Automobile expected to continue grow (see Lightweight Automotive) despite slow growth Increasing exponentially since 1970, Travel: Passenger during several recessions - an estimated 5.5 billion passengers globally in 2025 up from 3.2 billion in 2014. Airplane Demand: Over the next 20 years, companies such as Boeing are trillion airplanes valued at more than $5.6 forecasting a need for 38,050 Growth in both segments: The market for commercial/civilian drones will grow of 19% between 2015 and 2020, at a compound annual growth rate (CAGR) compared with 5% growth on the military side (Business Insider). transit has captured a larger Growing Share of Infrastructure Spending: Rail percent of global infrastructure investments recently and, according to OECD, this trend will continue. alone, the McKinsey Global Institute Aging Infrastructure: In the United States estimates that annual infrastructure spending will need to increase $150 billion more than current levels between now and 2020 to meet the country’s needs. Ever-expanding urban population strains Growing Urban Population: available infrastructure, increasing demand. 2.5 billion more people will be living in cities by 2050 (UN). Customer Demand: An increased focus on sustainability in both passenger and freight transportation demand for technological advancements that increase rider experience and rail efficiency is driving growth. safety upgrades or the adoption of new Required Government Regulations: technologies may also contributed to increased investment in rail infrastructure. Supporting Growth Indicators

With a growing world population and increasing demand from emerging economies, the market for lightweight automotive New trends and technologies vehicles will continue to grow. including autonomous and electric vehicles will continue to grab larger market shares, but internal combustion engines will remain the most common vehicle type over next ten years (75% of market share in 2025). The other 25% the will be electric vehicles and semi fully autonomous will enjoy roughly 13% market share between ICE and EVs. There are two main classifications of autonomous vehicles: semi-autonomous and fully autonomous. Semi-autonomous vehicles are already gaining market share today. They include vehicles with features such as adaptive cruise control, collision warning, brake assist, self-parking, and blind spot monitoring. Fully autonomous vehicles are not expected until 2020 at the earliest. Additional government regulation may either hinder or accelerate the adoption of vehicles. It is estimated that by of new 2025, fully autonomous vehicles will capture only 0.5% car sales while semi-autonomous vehicles will capture 12.4%. The commercial aviation industry is projected to grow over the coming decades. Spurred by increasing demand for passenger travel, major aircraft producers are expecting production of new commercial aircraft to increase. Over the next 20 years demand for new aircraft production will grow to record highs (Deloitte). Drones, or unmanned aircraft, where originally used mainly for defense purposes but are quickly expanding into civilian markets. Prices continue to drop thanks technological advances. Additional government regulation could hinder or accelerate growth. Over the next decade, significant investment in rail infrastructure will take place. This include both construction and expansion of infrastructure as well modernization aging infrastructure. This growth will be driven by increased urbanization, specifically in emerging economies, and consumer demand for shared modes of transportation. Description

Aviation

Autonomous Vehicles Autonomous Drones Rail Transit: Public Commercial Commercial

End Sector Global Markets - Transportation - Markets Global

106 City and County of Denver Local Impact global reach 5 End Market Opportunities Apparent applications in agriculture related sectors Opportunity $2.7 trillion $2.7 $2.3 trillion $300 billion $180 billion 10 Year Global Market 10 Year Potential Aging population: As the global, and specifically US population, continues to age (specifically the Baby Boomer generation), healthcare costs will rise and demand for biomedical devices will rise. Growing Health Expenditures: expenditures globally are on the rise, specifically in emerging economies who are driving increased demand for advanced medical technologies such as biomedical devices. Advances: Adapting additive manufacturing technologies to Technology use biological printing materials can allow functioning and lifelike ears, bladders, or bones can be produced. Likewise, the combination of sensors and nanomaterials creates internal medical devices to track health or even administer drugs. These technological advances and the rate they continue to be developed will drive overall revenue potential in the industry. Growing Demand: Most mature enterprises are now turning to cloud strategies as a strategic platform for growing customer demand and expanding sales channels (The Economist). Global tech leaders predict cloud computing (11%), Disruptive Technology: mobile platforms and apps (9%), Internet of Things (IoT)/machine-to-machine (M2M) (9%) and data analytics will be the most disruptive technologies over the next three years. (KPMG) Advances: Advances in mobile internet access, Internet of Things Technology sensor materials and capabilities, Big Data analytics, it is now possible to connect various systems in a home, building, business, or community to ensure efficient, seamless, and convenient use of resources. Consumer Behavior Change: awareness about the benefits of energy efficiency and desires for advanced security systems is also driving growth. Growth: The growing world population means increased demand Population for housing units (see Urban Housing). Internet of Things Growth: 2015 - Over nine billion connected devices around the world, including smartphones and computers. This number is expected to increase dramatically, with estimates ranging from 25 billion 50 devices in 2025 (McKinsey). Costs: Basic technologies (sensors and low-power chips) are well Technology established, and prices are expected to decline (McKinsey). Millennials: Millennials are 55% more likely than adults ages 35+ to purchase Millennials represent over 25% of US population (census) wearable tech (PWC). and spend $600 billion annually in the US (Accenture). Supporting Growth Indicators

The biomedical device sector is in the industry (i.e., biotechnology, biomedical engineering). This industry is characterized by an intersection between engineering and technology, applied to human and animal health, agriculture, or the environment. Specifically, application of advanced sensors and materials to medical devices has great growth potential over the next ten years. Some technologies growth is still speculative, but technology quickly advancing and opening new revenue potential. Cloud computing uses the internet, through a network of remote servers, to store, manage, and process data, run software, and provide service to multiple users. It allows companies to have a shared pool of resources accessible across geographies and computers. It includes software as a service (SaaS), utility computing (storage, backups, and capacity on a metered basis), cloud web services, Platform as Service, Managed Service Providers (MSP), service commerce platforms, and internet integration. Smart homes use smart appliances, safety and security systems, and smart energy equipment that communicate through mobile networks to automatically adjust lighting, temperature, music settings, or even track items in a refrigerator. technologies are devices, apparel, or textiles Wearable that use computer and advanced electronic technologies to store, transmit, or analyze data using the mobile internet and devices can be used for consumer, applications. Wearable business, or government purposes, but have gained popularity first in the consumer health industry (e.g., Nike FitBit). Description

Devices Technologies

Biomedical Devices Biomedical Computing Cloud

Smart Home Home Smart Wearable

End Sector Global Markets - Technology - Markets Global

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5 DISCUSSION Due to a high degree of overlap with the Front cloud-based software solutions integrated with Range’s Innovation Clusters, the Region has a wireless sensors (Cropx headquarters is in Israel unique opportunity to leverage the following and offices are in San Francisco, California and enablers to attract or grow high-potential end Denver, Colorado). markets: R&D for sensing components and improved filtration holds promise for nonproprietary Water Technologies collaboration between irrigation companies, university-based basic researchers, and Water scarcity or stress is seen as a substantive entrepreneurs, with the ultimate goals of risk to many company operations and revenues. sustainability and addressing basic human Certain markets can ensure future growth by needs for clean water. Globally, discovery and increasing water security and lowing water costs commercialization of scalable purification and by employing new water technologies. Managing filtration technology is a priority for improving water efficiently is a precondition of effective the lives of communities worldwide, including and sustainable agriculture; indeed, the lack of the rural poor in least developed countries. As a water is an existential threat to some agricultural result, a Water Technology Innovation cluster can regions in a changing climate. Precision irrigation offer a compelling theme of social responsibility. End Market Opportunities End Market Opportunities systems are in use globally and can explode in commercial use in North America within the next A Water Technology Innovation cluster has 3-5 years as producers, policymakers, and the high potential for crossover between the food general public grapple with the need to conserve system and urban/suburban markets. Agrium, water. There is potential for subsurface drip Inc., (AGU) is a Canada-based company that irrigation technology to become commonplace supplies irrigation equipment along with its core in crops and for other water technologies to soil amendment products. Since implementing improve irrigation on land used for forage and a diversification strategy in the 2000s, Agrium pasture. has a growing business in precision agriculture under the trade name Loveland Products, with Leading global companies (Netafim and varied product lines including crop nutrients, crop Jain Irrigation) have USA headquarters in protection products, seeds, precision agriculture, Fresno, California. A regional office or light finance and insurance. manufacturing / warehousing facility might locate in Denver as the companies expand nationally, An innovation cluster in water-conserving but it is more likely that national expansion technology is highly synergistic with the Sensors, would be through a regional marketing / service Testing & Analytics innovation cluster. Sensors representative, which does not generate demand on the irrigation equipment itself, or mounted on for real estate. Because the installation is on vehicles, can isolate areas of need and target the farms, the company distribution and service application of water and nutrients at a fine level networks are likely to be in rural areas so that of geographic specificity. These sorts of systems parts and service personnel will be closer to the contribute to cost-control, and, simultaneously, installation. deliver on a claim of environmental sustainability. Because testing and analytics devices are The concept of innovation cluster for applications integrated with record-keeping, the users can of water technology will need to be across the readily document the management practice. In wider multi-state region. An example of a small- this way, the “smart” water-soil fertility system medium company that distributes innovative enables foods to carry credible claims about the irrigation technology is Eco-Drip Irrigation sustainability of the farming practice. Supply, Inc. which designs, installs, maintains and services subsurface drip irrigation (SDI) systems in the High Plains of Texas, Oklahoma, Kansas and Nebraska. As another example, Cropx is an ag-analytics company that develops

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Plant Genetics & New Crop Varieties: free poultry, cage-free eggs, grass-fed beef and 5 slower-growing poultry. End Market Opportunities The long run outlook for crop agriculture is positive, driven by the imperative to feed the Basic research to examine the linkages between world—both people and livestock. The near- human health and reservoirs of disease in animal term outlook is less rosy because companies populations is an imperative (“One Health”) that in the crop seed sector are consolidating now. relates well to the traditional strength of Denver Drivers of crop company consolidation include and Colorado in ranching and beef and dairy the downturn in grain and oilseeds prices, and production. Facilities will require high-quality the desire to capture scale economies in seed scientists and the utmost biosecurity to locate in biotechnology R&D. the NWC.

Bioinformatics needed for crop innovation USA companies are world leaders in identifies traits of seed at the molecular level and development of livestock genetics, feed drives demand for a highly skilled work force. A additives, and veterinary medicines. We project cluster in bioinformatics at the NWC will need to significant growth in protein consumption compete with Silicon Valley. It is interesting to globally over the next 10-15 years, which note that Monsanto has not relocated its farm will drive demand for innovations in animal bioinformatics unit, the Climate Corporation agriculture and aquaculture. Genetic materials, (acquired in 2013), from Silicon Valley to the St. feed supplements, and vet medicines are high- Louis ag-bioscience cluster. While there is an value and well suited to export directly from undeniable global pull for innovation in genetics the USA to the burgeoning livestock industries and varietal improvement in crop agriculture, in internationally. order to meet global food demand, the research needs overlap with end users in health and Companion animal product companies (including wellness, electronics, and telecom. equine) are serving a growing market of smaller households in the USA who increasingly extend their own preferences for organic, natural, or Animal Health, Nutrition, & Herd fresh to foods for their pets. Rising incomes in Management the USA and demographics substantiate the business outlook for pet care. Purina, a unit of Because we predict continued strong demand Nestle, manufactures in the NWC footprint. Other for food protein in emerging markets worldwide, pet food companies with a presence in Colorado commercial livestock and meat production include: Blue Buffalo and Hills Pet Nutrition. industries have a positive outlook in the Small-to-medium size companies can enter the near term and on a 10-year horizon as well. burgeoning market for highly specialized pet This outlook takes into account that market products based on the good sources of raw penetration of meats in developed countries may material supplies in the Front Range due to the well have peaked and is fragmenting into niches nearby location of meat processing. of the health-conscious consumer segment.

Management practices that are conscious of Sensors, Testing, & Analytics for animal health and welfare is an interest of Product Quality & Biosafety players in the Front Range (JBS USA and its unit, Five Rivers Feeders, and Dr. Temple Grandin at International trade in food and feed is the driver CSU). There are excellent business development of supply chains that track and trace units in prospects for applications that assist producers commerce at a very high level of specificity. at the ranch and feedlot to certify the herd Innovative technologies that aid in testing, management practice. The growth that we sensing, monitoring, and documentation provide expect in expanded farm-ranch certification of the assurance needed for trade to thrive. Food animal health and management practice is due manufacturing companies are looking for to the North American restaurant and grocery solutions that can compete with the technology industries asking suppliers to provide antibiotic- used by regulators and critics to identify sources

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of contamination. Sensitivity is heightened by the Local Food Trends: 5 FDA issuing regulations to implement the Food Safety Modernization Act on farms and at the Local food has an appeal based on image, distribution levels of the supply chain. messaging, packaging, marketing, or delivery mode. Local themes connect agriculture and urban residents near the NWC. Companies that Agricultural Information Systems are involved in the recent burst of interest in home delivery might use NWC for a distribution Innovation in agricultural information systems center under contract to Fresh Amazon, GrubHub, provides farm operators with performance Blue Apron, Hello Fresh, Plated and the like. indicators in astounding detail. The enabling These new and largely pilot-scale companies technologies are geographic information systems are not likely to have transformational impact on and wireless handheld communication devices. the food system overall, but proximity to urban Potential for crop farm applications has been residents may be a way to utilize warehouse spurred by farm equipment manufacturers, a space in the NWC. sector that does not have a strong presence in the Front Range (in spite of one location for Food distribution and food service companies Kubota and one for John Deere—these are likely that do business in the region include: Schwanns, dealers). A GIS company located in Denver is Lineage Logistics, Sysco (Sygma), Aramark, Trimble Navigation Systems; the company has Sodexho. Other companies that operate in End Market Opportunities End Market Opportunities been involved with international development Colorado and trade on a fresh or healthy image projects using GPS to clarify land title. include the WhiteWave Company, Odwalla Inc., and the Campbells Soup brand , Bolthouse Venture capital funding has earmarked Drones Farms. WhiteWave manufactures in Denver and (Unmanned Aerial Vehicles) as the next the other two might be procurement or marketing technology poised to transform agricultural offices. Food manufacturers in Denver that have information systems in North America. The influential positions in their markets are Leprino business model for commercialization is a good Foods, (sales of $2.7 billion) and Ardent Mills, a fit for rural areas in the Front Range corridor. joint venture of leading grain companies. Drones can monitor fence and road status, and pasture, water, and atmospheric conditions. These applications have potential for agricultural producers and non-farm rural residents.

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Regional 6 Real Estate Profile National Western Center

6 INTRODUCTION AECOM evaluated commercial real estate space in metro Denver, as well as associated market opportunities and identified generalized performance metrics. real estate performance metrics associated with new office and retail construction in the Denver Outputs: area. Available data since 2006 was assessed to 1. Summary of regional, municipal and district study changes in demand for new development real estate markets. in office, retail, multifamily, industrial, and flex 2. Summary of core real estate performance metrics relevant to the future of NWC.

METHODOLOGY CoStar was used to extract real estate data performance factors for each property type are by property type within the following specific identified. geographies:

zz The Core-Based Statistical Area (CBSA)

RegionalReal Estate Profile Estate RegionalReal zz The City of Denver zz The Central Business District (CBD/LODO)

Property types analyzed include office, retail, multifamily, industrial, and flex. Detailed

114 City and County of Denver Local Impact global reach 6

CORE FINDINGS RegionalReal Estate Profile zz Looking at market share between residential, zz Inventory introduced to markets from 2007 to commercial, and industrial property types 2015 demands significant rent premium in all for the CBSA and the City of Denver, in property types. Retail markets have shown general there is a relatively equal distribution the largest gap in rent premium for new between office, multifamily and industrial inventory with an average annual increase real estate markets. A greater proportion of $8.13 per square foot in the CBSA and of retail and flex properties are located in $11.10 per square foot in the City of Denver. Suburban Denver, for example. Moreover, multifamily new inventory rent zz Strong economic recovery continues in premiums have soared in both the CBSA and the office market. Over a ten-year period, the City of Denver. Since 2006, average rent across the CBSA, the amount of occupied per apartment unit has increased by $259 office space has increased at an annualized in the CBSA and $339 in the City of Denver. rate of about 1.8 million square feet. At Office, industrial, and flex also demonstrated the same time, total inventories of office sizable gains in rent premiums in both the space have only increased at a 1.5 million CBSA and the City of Denver. square foot-per year rate since 2006. For zz The analysis also acknowledges that recent the City of Denver, the amount of occupied changes in workplace trends are impacting office space has increased at a roughly office real estate markets. Workplace models 750,000-square-foot-per year rate, in are increasingly shifting from traditional comparison with inventory, which grew at a offices and cube workspaces into open plan slower 550,000-square foot per year rate. concepts. While the concept is focused on Reflecting growth in occupancy faster than increased collaboration, it has led to steady supply, vacancy rates in the office market decreases in office space requirements per have steadily declined since 2009. employee. zz Occupancy trends have shown strong net annual increases since 2006 in CBSA retail (1.8 million sq. ft.), multifamily (4,603 units), industrial (2 million square feet), and flex (500,000 sq. ft.). Industrial has made the strongest recovery in occupancy. An increase of roughly 10 million square feet in CBSA occupancy and 4 million square feet in City of Denver occupancy has occurred in the industrial market since 2012.

September 2016 115 National Western Center

Supporting Tables 6 Figure 62. Inventory Percentage by Property Type

100%

80%

81.9% CBSA 60% 74.0%

City of

Denver

40% 54.8% 52.8% 52.4% 47.6% 47.2% 45.2%

20%

26.0% 18.1%

RegionalReal Estate Profile Estate RegionalReal 0% Office (Sq Ft) Retail (Sq Ft) Multifamily Industrial (Sq Ft) Flex (Sq Ft) (Units)

Office Retail Multifamily (Sq. Ft.) (Sq. Ft.) (Units) Industrial Flex CBSA 162,141,642 146,562,129 272,923 192,259,667 29,660,383 Percentage 54.8% 74.0% 52.8% 47.6% 81.9% City of Denver 73,231,239 38,172,891 128,937 100,748,833 5,369,067 Percentage 45.2% 26.0% 47.2% 52.4% 18.1%

Source: CoStar

Retail and Flex property types Office, multifamily, and are primarily positioned in industrial property types are suburban CBSA rather than relatively equally distributed within the City of Denver. between the CBSA and the City of Denver.

116 City and County of Denver Local Impact global reach

Figure 63. Vacancy Rates by Property Type 6 RegionalReal Estate Profile CBSA 18% 16% 14% Office 12% Retail 10% Multifamily 8% Industrial 6% Flex 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Year Office Retail Multifamily Industrial Flex 2006 13.3% 7.3% 5.4% 6.9% 13.5% 2007 12.2% 7.1% 4.9% 5.9% 12.3% 2008 13.6% 8.0% 6.2% 6.9% 14.3% 2009 14.7% 8.3% 5.7% 7.3% 15.8% 2010 13.8% 7.6% 4.2% 6.3% 15.7% 2011 13.1% 7.0% 3.8% 6.8% 14.4% 2012 12.8% 6.6% 2.6% 5.5% 13.8% 2013 12.0% 6.1% 3.1% 4.1% 11.0% 2014 11.4% 5.5% 2.6% 3.1% 8.2% 2015 10.5% 5.3% 3.4% 3.3% 6.9%

Source: CoStar

Vacancy rates within the CBSA Flex properties represent have decreased in all property the largest drop in vacancy types since 2009. rate from 2009 to 2015 (8.9% decrease).

September 2016 117 National Western Center

Figure 64. Vacancy Rates by Property Type (Continued) 6

City of Denver

20% 18% 16% Office 14% Retail 12% 10% Multifamily 8% Industrial 6% Flex 4% 2% 0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 RegionalReal Estate Profile Estate RegionalReal

Year Office Retail Multifamily Industrial Flex 2006 13.2% 7.0% 4.9% 7.1% 9.1% 2007 11.4% 6.1% 4.8% 5.6% 8.1% 2008 12.7% 7.4% 5.7% 6.8% 16.6% 2009 14.4% 7.5% 4.6% 7.3% 18.7% 2010 12.4% 6.0% 3.4% 5.1% 18.1% 2011 11.5% 5.4% 3.4% 6.0% 15.0% 2012 11.8% 5.0% 2.5% 4.3% 13.2% 2013 11.0% 5.4% 3.3% 3.1% 8.4% 2014 9.8% 4.6% 2.6% 2.1% 5.1% 2015 10.1% 4.1% 3.5% 2.4% 3.2%

Source: CoStar

Vacancy rates within the Flex properties represent CBSA have decreased in all the largest drop in vacancy property types since 2009. rate from 2009 to 2015 (8.9% decrease).

118 City and County of Denver Local Impact global reach

Figure 65. Absorption by Property Type 6 RegionalReal Estate Profile

Office Absorption (Sq. Ft.) Multifamily Absorption (Sq. Ft.) 2,500,000 4,500,000 2,000,000 4,000,000 3,500,000 1,500,000 3,000,000 1,000,000 2,500,000 500,000 2,000,000 1,500,000 0 1,000,000 -500,000 500,000 -1,000,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CBSA City of Denver CBD - LODO CBSA City of Denver

Retail Absorption (Sq. Ft.) Industrial Absorption (Sq. Ft.) 3,000,000 3,000,000 2,500,000 2,500,000 2,000,000 2,000,000 1,500,000 1,500,000 1,000,000 1,000,000 500,000 0 500,000 -500,000 0 -1,000,000 -500,000 -1,500,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CBSA City of Denver CBSA City of Denver

Source: CoStar

September 2016 119 National Western Center

Figure 66. Annual Net Inventory versus Occupancy New New 6 CBSA Inventory Occupancy Net Total

2 Net Total 13,798,695 16,419,268 2,620,573 (2006-2015) Office 1 Annual Average 1,533,188 1,824,363 291,175 0 City of Denver -1 Net Total 5,099,920 6,701,527 1,601,607

-2 (2006-2015 Annual Average 566,658 744,614 177,956 Square Feet (Millions) -3 CBD - LODO Net Total 1,945,661 2,577,875 632,214

CBSA City of Denver CBD - LODO Districts (2006-2015)

Annual Average 216,185 286,431 70,246 2

Retail New New 1

CBSA Inventory Occupancy Net Total Net Total 0 14,063,501 16,025,922 1,962,421 (2006-2015) -1 Annual Average 1,562,611 1,780,658 218,047

RegionalReal Estate Profile Estate RegionalReal City of Denver

Square Feet (Millions) -2 Net Total 2,016,277 2,955,745 939,468 (2006-2015 Annual Average 224,031 328,416 104,385 CBSA City of Denver

4,000

New New 2,000 CBSA Inventory Occupancy Net Total Net Total 0 38,153 41,425 3,272 (2006-2015) Multifamily -2,000 Annual Average 4,239 4,603 364 City of Denver -4,000 Net Total 19,696 20,563 867 (2006-2015 Residential Units (Thousands) Annual Average 2,188 2,285 96 CBSA City of Denver

3 New New 2 CBSA Inventory Occupancy Net Total 1 Net Total 11,976,392 18,095,963 6,119,571 0 (2006-2015) Industrial

-1 Annual Average 1,330,710 2,010,663 679,952

-2 City of Denver Net Total 3,914,620 8,356,683 4,442,063

Square Feet (Millions) -3 (2006-2015 Annual Average 434,958 928,520 493,563

CBSA City of Denver

Source: CoStar

120 City and County of Denver Local Impact global reach

Figure 67. Office Analytics 6 RegionalReal Estate Profile

Vacancy Rate Inventory Per Building (Sq. Ft.) - 2015 15%

14% 120,671 13%

12%

11%

10%

9% 31,749 34,381 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBSA City of Denver CBD - LODO CBSA City of Denver CBD - LODO Base Rent $25

$23

$21

$19

$17 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBSA City of Denver CBD - LODO

Source: CoStar

Office vacancy rates have Average office inventory per significantly decreased in all unit in CBD-LODO is more geographies since 2009 (>14%). than three times the average inventory size of the CBSA and the City of Denver. Office base rent has slightly increased in all geographies since 2009.

September 2016 121 National Western Center

Figure 68. Office Absorption versus Delivered 6

CBSA 19,003,917 15,577,775 3.5 3.0 2.5 Millions 2.0 Absorption Deliveries 1.5 1.0 0.5 0.0 -0.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

City of Denver 7,785,114 6,153,080 2.5 CBSA 19,003,917 2.0 15,577,775 3.5

AbsorptionMillions (demand) outpaced From 2006 to 2015, net 3.01.5 2.5 deliveriesMillions 1.0 (supply) by 3,426,142 occupancyAbsorption increased annuallyDeliveries 2.0 0.5 Absorption Deliveries square1.5 feet in the CBSA from by 1,824,363 square feet in the 0.0 RegionalReal Estate Profile Estate RegionalReal 20061.0 to 2015. -0.50.5 -1.00.0 -0.5 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2006 2007 2008 2009Absorption2010 2011Deliveries2012 2013 2014 2015 Absorption Deliveries

City of Denver 7,785,114 6,153,080 2.5 2.0

Millions 1.5 1.0 Absorption Deliveries 0.5 0.0 -0.5 -1.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

Absorption (demand) outpaced From 2006 to 2015 net deliveries (supply) by 1,632,034 occupancy increased annually square feet in the City of by 744,614 square feet in the Denver from 2006 to 2015. City of Denver.

Source: CoStar

122 City and County of Denver Local Impact global reach

Figure 69. Office Absorption versus Delivered (Continued) 6 RegionalReal Estate Profile

CBD - LODO 3,037,497

1.2 2,623,870 1.0 0.8 Millions 0.6 Absorption Deliveries 0.4 0.2 0.0 -0.2 -0.4 -0.6 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

Floor Area Ratio - 2015

7.16

5.11

2.46

LODO CBD CBD-LODO

Source: CoStar

Absorption (demand) outpaced Floor Area Ratio (FAR) in CBD deliveries (supply) by 413,627 is almost three times as high as square feet in CBD - LODO in LODO. Aggregately, FAR in from 2006 to 2015. CBD-LODO stands at just over 5.

From 2006 to 2015, net It should be noted, land-use occupancy increased annually densities within Denver’s new by 286,431 square feet in CBD code are no longer governed - LODO. by FAR. New code governs higher density projects primarily based on desired context and form of a particular site. Source: CoStar

September 2016 123 National Western Center

Figure 70. Office Rent Premiums 6

CBSA $30 All Properties $20

New Properties $10 (2007-2015) $3.73 $4.71 $4.64 $3.88 $2.55 $3.20 $2.76 $2.78 $3.21 Rent Premium $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 City of $40 Denver $30 All Properties

$20 New Properties $7.74 $7.75 (2007-2015) $10 $6.84 $4.59 $4.58 $4.35 $3.69 $3.59 $4.48 Rent Premium $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBD - $40 LODO $30 All Properties

RegionalReal Estate Profile Estate RegionalReal $20 New Properties $6.33 $7.52 $6.10 (2007-2015) $10 $5.36 $4.06 $4.23 $3.36 $2.57 $2.54 Rent Premium $0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: CoStar

124 City and County of Denver Local Impact global reach

Figure 71. Retail Analytics 6 RegionalReal Estate Profile

Vacancy Rate Inventory Per Building (Sq. Ft.) - 2015 9%

8% 13,690 7%

6% 9,216 5%

4%

3% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBSA City of Denver CBSA City of Denver Base Rent

$20

$18

$16

$14 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBSA City of Denver

Source: CoStar

Retail vacancy rates have Average retail inventory per significantly decreased in the unit in the CBSA is over 4,000 CBSA and the City of Denver square feet larger than the since 2010. average inventory size of retail in the City of Denver.

Retail base rent has significantly increased in the City of Denver since 2009. A slight increase in rent has occurred in the CBSA since 2010.

September 2016 125 National Western Center

Figure 72. Retail Absorption versus Delivered 6

CBSA 18,746,637 18,975,508

6.0 5.0

Millions 4.0 3.0 2.0 Absorption Deliveries 1.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Absorption Deliveries

City of Denver 3,383,959

1.2 1.0 Deliveries (supply) outpaced From 2006 to 2015, net2,972,401 Millions 0.8 absorption0.6 (demand) by occupancy increased annually 0.4 Absorption Deliveries 228,8710.2 square feet in the by 1,780,658 square feet in the

RegionalReal Estate Profile Estate RegionalReal CBSA0.0 from 2006 to 2015. CBSA. -0.2 -0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CBSA Absorption Deliveries 18,746,637 18,975,508

6.0 5.0

Millions 4.0 3.0 2.0 Absorption Deliveries 1.0 0.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Absorption Deliveries

City of Denver 3,383,959 Absorption 1.2 (demand) outpaced From 2006 to 2015 net 1.0 2,972,401

deliveriesMillions 0.8 (supply) by 441,558 occupancy increased annually square0.6 feet in the City of by 328,416 square feet in the 0.4 Absorption Deliveries Denver0.2 from 2006 to 2015. City of Denver. 0.0 -0.2 -0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

Source: CoStar

126 City and County of Denver Local Impact global reach

Figure 73. Retail Rent Premiums 6 RegionalReal Estate Profile

CBSA $30

$25 All Properties $20

$15 $11.31 $9.97 $10.23 New Properties $10 $8.45 $7.74 (2007-2015) $6.76 $6.51 $6.32 $5.84 $5 Rent Premium $0 2007 2008 2009 2010 2011 2012 2013 2014 2015

City of $35 Denver $30 All Properties $25

$20 $17.19 New Properties $15 $11.61 $11.52 $11.54 $11.78 $9.97 (2007-2015) $9.04 $9.08 $10 $8.20

$5 Rent Premium

$0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: CoStar

September 2016 127 National Western Center

Figure 74. Multifamily Analytics 6

Vacancy Rate

7.0%

6.0%

5.0%

4.0%

3.0%

2.0% 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CBSA City of Denver

Effective Rent Per Unit RegionalReal Estate Profile Estate RegionalReal $1,300

$1,200

$1,100

$1,000

$900

$800

$700 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

CBSA City of Denver

Multifamily vacancy rates Multifamily effective rent per have significantly decreased unit has significantly increased since 2008 in both the CBSA in the CBSA and the City of and the City of Denver. Denver since 2009. Effective Increased supply in multifamily rent average increased around units since 2014 has slightly $500 since 2009. increased vacancy rates.

Source: CoStar

128 City and County of Denver Local Impact global reach

Figure 75. Multifamily Absorption versus Delivered 6 RegionalReal Estate Profile

CBSA 40,744 41,754 12,000

10,000

8,000

6,000 Net Absorption (Units) Deliveries (Units) 4,000

2,000

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Absorption (Units) Deliveries (Units)

City of Denver 20,569 21,830

1.2 Deliveries1.0 (supply) outpaced From 2006 to 2015, net

Millions 0.8 absorption0.6CBSA (demand) by 10 occupancy increased annually 40,744 41,754 units0.412,000 in the CBSA from 2006 to by 4,603 units in the CBSA. Net Absorption (Units) Deliveries (Units) 2015.0.210,000 0.08,000

-0.26,000 Net Absorption (Units) Deliveries (Units) -0.44,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2,000 Net Absorption (Units) Deliveries (Units) 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Absorption (Units) Deliveries (Units)

City of Denver 20,569 21,830

1.2 1.0

Millions 0.8 0.6 0.4 Net Absorption (Units) Deliveries (Units) 0.2 0.0 -0.2 -0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Net Absorption (Units) Deliveries (Units) Deliveries (supply) outpaced From 2006 to 2015, net absorption (demand) by 10 occupancy increased annually units in the CBSA from 2006 to by 4,603 units in the CBSA. 2015.

Source: CoStar

September 2016 129 National Western Center

Figure 76. Multifamily Rent Premiums 6

CBSA $1,800 $1,600

$1,400 Effective Rent Per $1,200 Unit $1,000

$800 Effective Rent Per Unit (2007-2015) $600 $341 $337 $285 $324 $400 $240 $242 $246 $168 $148 Rent Premium $200

$0 2007 2008 2009 2010 2011 2012 2013 2014 2015

City of $1,800 Denver $1,600 $1,400 Effective Rent Per $1,200 Unit $1,000 RegionalReal Estate Profile Estate RegionalReal $800 Effective Rent Per Unit (2007-2015) $600 $434 $430 $353 $374 $331 $300 $340 $400 $255 $232 Rent Premium $200 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: CoStar

130 City and County of Denver Local Impact global reach

Figure 77. Industrial Analytics 6 RegionalReal Estate Profile Vacancy Rate

8%

7%

6%

5%

4%

3%

2% 2011 2014 2013 2012 2015 2010 2007 2008 2006 2009 CBSA City of Denver

Base Rent $7.0 $6.5 $6.0 $5.5 $5.0 $4.5 $4.0 $3.5 $3.0 2011 2014 2013 2012 2015 2010 2007 2008 2006 2009 CBSA City of Denver

Industrial vacancy rates have Industrial base rent has significantly decreased in the significantly increased in the CBSA and the City of Denver CBSA and the City of Denver since 2009. since 2011. A particularly sharp increase in base rent has occurred in the industrial Source: CoStar properties since 2013.

September 2016 131 National Western Center

Figure 78. Industrial Absorption versus Delivered 6 CBSA 21,311,503

5.0 14,285,123 4.0 3.0 2.0 1.0 0.0 Absorption Deliveries -1.0 -2.0 Square Feet (Millions) 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Absorption Deliveries

City of Denver 9,670,116 1.2

1.0 5,199,088 CBSA0.8 21,311,503 Absorption (demand) outpaced From 2006 to 2015, net

0.65.0 14,285,123 deliveries0.44.0 (supply) by occupancyAbsorption increased Deliveriesannually 0.23.0 7,026,3802.0 square feet in the by 2,010,663 square feet in the 0.0 RegionalReal Estate Profile Estate RegionalReal 1.0 -0.2 CBSASquare Feet (Millions) 0.0 from 2006 to 2015. CBSA. Absorption Deliveries -0.4 -1.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 -2.0 Square Feet (Millions) Absorption Deliveries 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Absorption Deliveries

City of Denver 9,670,116 1.2

1.0 5,199,088 0.8

0.6 0.4 Absorption Deliveries 0.2 0.0 -0.2 Square Feet (Millions) -0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

Absorption (demand) outpaced From 2006 to 2015 net deliveries (supply) by 4,471,028 occupancy increased annually square feet in the City of by 928,520 square feet in the Denver from 2006 to 2015. City of Denver.

Source: CoStar

132 City and County of Denver Local Impact global reach

Figure 79. Industrial Rent Premiums 6 RegionalReal Estate Profile

CBSA $9 $8 $7 All Properties $6 $5 $4 $2.90 New Properties $3 $2.17 (2007-2015) $2 $0.56 $0.66 $0.62 $0.63 $1 $0.24 $0.46 Rent Premium $0 ($0.53) -$1 2007 2008 2009 2010 2011 2012 2013 2014 2015

City of $12 Denver $10 All Properties $8 $5.66 $6 $4.56 New Properties $4 $2.88 $2.41 (2007-2015) $2.00 $1.49 $2 $0.82 ($0.23) $0 ($0.82) Rent Premium

-$2 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: CoStar

September 2016 133 National Western Center

Figure 80. Flex Analytics 6 Vacancy Rate 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% 2011 2014 2013 2015 2012 2010 2007 2008 2009 2006 CBSA City of Denver Base Rent

RegionalReal Estate Profile Estate RegionalReal $12

$10

$8

$6 2011 2014 2013 2015 2012 2010 2007 2008 2009 2006 CBSA City of Denver

Flex vacancy rates have Average retail inventory per significantly decreased in the unit in the CBSA is over 4,000 CBSA and the City of Denver square feet larger than the since 2009. average inventory size of retail in the City of Denver.

Retail base rent has slightly increased in the CBSA and the City of Denver since 2009. A slight increase in rent has Source: CoStar occurred in the CBSA since 2010.

134 City and County of Denver Local Impact global reach

Figure 81. Flex Absorption versus Delivered 6 RegionalReal Estate Profile

CBSA 5,005,767

1.6 3,408,906

1.1 Millions

0.6 Absorption Deliveries 0.1

-0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

City of Denver 1,025,640 0.5 748,441 0.4

Flex0.3 Absorption versus From 2006 to 2015, net DeliveredCBSA0.2 Absorption (demand) occupancy increased annually Absorption5,005,767 Deliveries

0.11.6 outpaced deliveries (supply) by 520,544 square feet3,408,906 in the 0.0 1.1 by-0.1Millions 1,596,861 square feet in the CBSA. CBSA-0.20.6 from 2006 to 2015. 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries 0.1 Absorption Deliveries

-0.4 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries

City of Denver 1,025,640 0.5 748,441 0.4

0.3

0.2 Absorption Deliveries 0.1

0.0

-0.1

-0.2 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Absorption Deliveries Absorption (demand) outpaced From 2006 to 2015 net deliveries (supply) by 277,199 occupancy increased annually square feet in the City of by 109,945 square feet in the Denver from 2006 to 2015. City of Denver.

Source: CoStar

September 2016 135 National Western Center

Figure 82. Flex Rent Premiums 6

CBSA $14 $12 All Properties $10

$8 New Properties $6 (2007-2015) $3.60 $4 $2.53 $2.16 $1.50 Rent Premium $2 $0.72 $0.98 $0.77 $0.46 $0.25 $0 2007 2008 2009 2010 2011 2012 2013 2014 2015 City of $14 Denver $12

$10 All Properties

$8

$6 $3.94 New Properties $4 $2.72 $3.07 (2007-2015) $2.08 RegionalReal Estate Profile Estate RegionalReal $2 $0.35 ($0.46) ($0.75) ($0.79) Rent Premium $0 ($1.23)

-$2 2007 2008 2009 2010 2011 2012 2013 2014 2015

Source: CoStar

136 City and County of Denver

Site and 7 neighborhood National Western Center

7 URBAN INFILL AND MANUFACTURING NWC revitalization is unfolding within a broader NWC Implications: “area of influence” which has a significant and unmistakable industrial tradition. Maps that zz End markets are increasingly global in summarize land use conditions in this area nature, and that tools to grow exports, as follow. Our national experience regarding these well as strategies that maximize supply areas reinforces several ideas: chain connections will matter more and more to regions that continue to specialize in 1. Districts similar to NWC (i.e. close-in older manufacturing. industrial areas proximate to downtown) can zz The broader set of infrastructure be found across the county, improvements proposed as part of NWC 2. Many districts still support industrial activity, revitalization are likely to improve access including modern “advanced manufacturing” through the broader area of influence, and activity, which necessitates conversations gradually encourage land use change. about freight movement and truck impacts. A series of maps were developed to illustrate 3. Many districts are seeing pressure for land variables. Site and neighborhood use change; in Chicago, areas zoned for planned industrial use, such as the Clyburn Corridor and the Near West Side (long the traditional home of wholesale food companies) are now in transition. These Districts tend to move along one of two divergent trajectories:

1. Districts that are clearly in transition toward higher value mixed use: CORTEX in St. Louis, RiNo in Denver, the Menominee Valley in Milwaukee, and Scotts Addition in Richmond, VA. 2. Districts that are expected to remain largely in industrial use: Examples include the Mt Elliott Corridor in Detroit, and the Park Hill Industrial Corridor in Louisville.

140 City and County of Denver Local Impact global reach

Businesses in or near area of influence 7 Site and neighborhood zz This map shows business locations in and zz A number of cluster businesses are located near the NWC economic area of influence. in the area, but there is room for additional The analysis identified more than 3,000 jobs businesses to locate in the area. across an array of industry sectors.

Legend Industry ! Accommodation and Food Services ! ! Administrative and Support and Waste Mgmt ! ! ! Arts, Entertainment, and ! Recreation Agriculture, Forestry, Fishing ^_ and Hunting ! ! Construction Heron ! Educational Services ! Finance and Insurance Pond/Heller ! ! ! ! ! Health Care and Social Open Space Assistance ! ! ! Information ! Manufacturing ! ! Other Services (except Public Adams County Administration) ! !! Professional, Scientific, and ! ! !! ! ! Denver ! Technical Srvcs ! Northside ! ! ! !! ! ! ! Public Administration ! Park ! ! ! !! ! Real Estate Rental and Leasing ! r ! ! ! ! ! ! ve ! ! ! Retail Trade ! Ri ! d ! ! ! e lv ! ! Transportation and tt ! Warehousing ! ! la ! ! B ! ! ! . P ! ! Unknown ! S ton ! ! h ! ! Wholesale Trade ! ! ! g ! !r!i ! ! ! B I2 Rail Station ! ! ! ! National !N ! ! ! ! !! NWC Area of Influence ! ! ! Western Stock ! ! I2 ! Commuter Rail ! ! ! ! Rail t Show Station !

S (! ! New Road Argo Park ! n ! NWC t o

S t

g! ! ! ! k n i ! (! !!! or h ! ! Y s !!

a

! ! ! N W ! !

N ! ¦¨§70 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !

! 38 th S ! E 40th Ave t t t t S S u 38th - Blake ! ke ln 0 ¼ Miles I2 la a Station B W ¯ September 2016 141 National Western Center

Number of employees by block group 7 zz This map summarizes the number of zz The level of employment is varied across the employees in each census block group with area of influence with the largest density of a scaled dot. employees at 38th St and Brighton Blvd at the Pepsi Bottling Group

) Site and neighborhood

Heron Pond/Heller Open Space

Adams County

Northside Denver Park r ve Ri vd te l at B Pl S. ton gh ri Legend B

N Number of t

S I2 Employees

n

Argo Park o 1 t

g

t

n S i 10

k h NWC

s

a or

Y

W

N N 1,000 ¨§70

I2 Rail Station NWC Area of Influence Commuter Rail Rail New Road E 40th Ave t Park t t S S u n 38th - ke al 0 ¼ Miles I2la W Blake Station B ¯ Source: US Census LEHD

142 City and County of Denver Local Impact global reach

Parcel Value 7 Site and neighborhood zz Parcel value including assessed land value Vacant parcels generally have the lowest and improvements is shown on two maps. value when compared with parcels that have Total parcel value for each parcel broken structures. down into five cost categories ranging from zz The parcels with the highest value include less than $100,000 to more than $10 million. the Denver Coliseum and the National Parcel value is shown on the other map on a Western Complex. value per square foot map which normalizes the property value based on the size of each zz When normalized to value per square parcel. foot, the majority of parcels in the area of influence are valued at less than $10 per zz Factors that increase parcel value are square foot. improvements and the size of the parcel.

Heron Pond/Heller Open Space

Adams County

Northside Denver Park r ve Ri vd te l at B Pl S. ton gh ri B N

I2 t

Argo Park S Legend

n

t

o

S t

g k Parcel $ per Sq Ft

n i NWC or h

Y < $10.00

s

a

N

W $10.01 - $20.00 N $20.01 - $30.00 ¦¨§70 $30.01 - $40.00 > $40.00 I2 Rail Station NWC Area of Influence Commuter Rail Rail 38 New Road th S E 40th Ave t t Park t t S 38th - S u n ke al 0 ¼ Miles Blake I2la W Station B ¯ Source: City and County of Denver Assessor

September 2016 143 National Western Center

Building to Parcel Ratio 7 zz The building to parcel ratio was calculated zz The southern area of the area of influence by dividing the total area of buildings in including the National Western Complex located within a parcel by the total area of has a higher building ratio than areas to the parcel. Parcels with a higher ratio have the northeast and northwest. The Denver a greater ratio of buildings to unbuilt area Coliseum has a low building got parcel ratio contained within them. due to a large surface parking lot. zz A lower building to parcel ratio indicates a greater potential for infill development than parcels which have more building coverage.

Site and neighborhood

Heron Pond/Heller Open Space

Adams County

Northside Denver Park r ve Ri vd te l at B Pl S. ton gh ri B N

I2 t

Argo Park S Legend

n

t

o

S t

g NWC k I2 Rail Station

n i

or

h Y NWC Area of

s

a

N Influence W

N Commuter Rail ¨§70 Rail New Road Building to Parcel Ratio < 0.25 0.26 - 0.50 0.51 - 0.75 38 > .75 th S E 40th Ave t t Park t t S 38th - S u n ke al 0 ¼ Miles Blake I2la W Station B ¯ Source: City and County of Denver Assessor

144 City and County of Denver Local Impact global reach

Age of Structures 7 Site and neighborhood zz The year structure built attribute from the zz Structures on parcels were broken down into City and County of Denver Assessor data before 1900, 1901-1950, 1951-1975, and newer was used to calculate the age of the building than 1975. stock within the area of influence. Some zz Structures in the north on both sides of the parcels, including vacant parcels, do not Platte River are newer with many being built contain this information and are shown in since 1975. Most structures in the northeast gray. are generally built since 1950 with a few smaller parcels having structures built earlier than that.

Heron Pond/Heller Open Space

Adams County

Northside Denver Park r ve Ri vd te l at B Pl S. ton gh ri B N

I2 Legend t

Argo Park S

n t I2 Rail Station o

S t

g k

n NWC Area of i NWC

or

h Y Influence

s

a

N

W Commuter Rail

N Rail ¨§70 New Road Year Structure Built Vacant or Unknown Before 1900 1901 - 1950 1951 - 1975 38 Newer than 1975 th S E 40th Ave t t Park t t S 38th - S u n ke al 0 ¼ Miles Blake I2la W Station B ¯ Source: City and County of Denver Assessor

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8 Conclusions National Western Center

8 NEXT STEPS

Findings lead to roughly 1 - 3 million square feet of lab, office and flex space for the homes of The study has resulted in an improved hundreds of companies and joint ventures, understanding of the economic opportunities and thus thousands of jobs. related to the National Western Center 8. The broader area of influence around NWC redevelopment and adjacent area development, includes a significant number of companies including: that support more than 3,000 jobs. The Conclusions Conclusions 1. Reaffirmed the economic significance of an analysis reinforces the need to further clarify emerging agriculture innovation economy the types of business opportunities that are across the Front Range. likely to emerge at the NWC and across the area of influence in coming years. 2. Focused on the catalytic role of the NWC in context with the Agriculture Innovation The concluding finding is that the NWC and the Triangle, to serve as a place-based Agriculture Innovation Triangle must be a critical innovation anchor to accelerate Front Range partner for the economic success of Denver, the economic development and job creation, with metro area, and Colorado, and serve in at least emerging focus on food, water and animal / four focused efforts: human health innovation sectors. zz Agricultural and sustainable resource 3. Identified the critical role and importance literacy and awareness, as the place of anchors, such as CSU and Denver Water, where rural and urban Colorado connect as institutional anchors for the development to the world and the future – and serving projects and ensuring related economic as a formal and informal place where the opportunities. exploration of an idea, our history, or our 4. Recognized the National Western Stock connection to the world occurs in a living Show’s role as critical link to both to NWC’s classroom. agricultural roots and future economic zz Entertaining and convening the best of opportunities, from cattle markets to Colorado and the American West, from the environmental sustainable agriculture NWSS to new events that brings the best and life stock production. NWSS plays an of the world to our community and allows important connecting role in all facets of the Colorado to show, demonstrate, share and NWC, entertainment, education, research and promote products, skill and prowess, and economic opportunities. ideas to the world. 5. Defined and measured key industry clusters zz Research, from the lab to the “dining room across the Front Range that likely will table”, focused on developing products, drive economic sustainability, business tools, and technologies to meet the food and development, and employment opportunities. resources challenges facing our nation and 6. Emphasized innovation and commercializing the world. research will lead to commercial successes zz Innovation and Business, along with public- (i.e. expanded opportunities in existing private ventures, are delivering innovative and new end markets), which takes a step products, services, technologies, and beyond scientific and applied research in practices – created through the linkage of labs leading to new products, services and science, technology, and agriculture and business success. resource practice and knowledge – to meet 7. Framed the scale of opportunity, mix of food and resource demands of the world. business and innovation opportunities, which influences types and timing of development and supportive programs. Specifically, the NWC-led agri/innovation economy could

148 City and County of Denver Local Impact global reach

Next Steps 2. ANALYSIS: This study explored global, 8 national, state and local economic and Conclusions The NWC NextGen Agribusiness Economic demographic data to frame the economic Development Study has evolved and advanced situation and opportunity, investigate current our understanding of partnerships with the business activity, and identify economic private sector, as well as community and clusters where apparent comparative institutional partners. The study builds a advantages exist for NWC, the Agriculture foundation for an economic strategy and Innovation Triangle, and Colorado. business development work program, which Additionally, the study focused on best together will enable the realization of economic practice NWC-type innovation district opportunity for NWC, the adjacent area of developments to analyze factors influence influence, and the Agriculture Innovation Triangle their success. The next steps call for an in Colorado. The following provides a roadmap, advancing of this analysis, both a continuous and some of the specific next steps for building updating to ensure data-driven information on this foundation, through four linked elements: for decision choices and digging deeper into active engagement, advanced analysis, strategy the data for specific actionable strategies development, and foundational implementation. and steps. Recommended advanced analysis includes: 1. ENGAGE: Active engagement with current and future stakeholders and partner, including a. Update agriculture-related patent data elected and appointed officials, institutional (matching the strong research completed anchors, neighborhood residents and by CSU) for local companies to support organizations, business leaders (local and in identification of priority companies that can identified clusters), and education leaders. support ag-related innovation at NWC, a. Hold an Agriculture Forum (Fall 2016), b. Continuously update firm data analysis, featuring the business and agriculture at the national and local level, to monitor changes and opportunities, briefing and market changes and identify gaps a release of this report, and a discussion and opportunities for business cluster on economic/business opportunities and prioritization. Additionally, expand the challenges. outcomes data to provide information for determining attraction and growth targets. b. Continue engaging and communicating with neighborhood residents and c. Link firm data from public and private stakeholder groups. sources, like CSU’s patent data, Denver tax data, and other economic data, to confirm c. Brief partner and industry business market leading firms and clusters. organizations to discuss business and contracting opportunities. d. Evaluate industry output per worker trends or employment / output multipliers for d. Leverage and advance opportunities for agriculture-linked sectors in comparison Denver Water and other water-oriented with the broader economy. partners at NWC. e. Update information and analysis regarding e. Convene educational partners and global regional venture capital as well as university research networks to begin university R&D spending, with emphasis on developing the future workforce training ag-related sectors. and education opportunities and promote local residents access. f. Monitor business and cluster performance and characteristic information to better f. Inform and convene business technical understand location and business assistance providers, financing and requirements to ensure the NWC and the other business services partners and Agriculture Innovation Triangle are focused organization to coordinate and provide on providing lab, office and flex space and business services to Globeville Elyria- program support desired by the targeted Swansea (GES) firms. firms.

September 2016 149 National Western Center

g. Maintain information of foreign direct

8 Providing the opportunity for investments and export activity, in partnership with other global economic serendipitous collisions on-site development efforts, with an emphasis on national and local activity in products, is necessary to encourage services and technology related to innovation and economic agriculture production and resource sustainability. development. h. Regarding the area of influence, conduct additional infrastructure and land use Triangle. Identify shared strategy elements, Conclusions Conclusions assessments to better frame re-use and opportunities to collaborate, and mutual revitalization opportunities. reliance in specialization across these local and regional strategies. Strategies f. Create workforce and business development programs that both link with the broader Create a comprehensive economic development strategy and explicitly drive job creation. strategy, with a specific focus, leading to growing an innovative, globally-focused business area. This strategy builds on the economic cluster Implementation findings, and sets a plan for growing, starting, A business development program that aligns and attracting firms that would strategically public and private resources should be initiated. benefit from locating in or working with Denver OED’s city-wide economic development businesses, researchers, and stakeholders within strategy and the JumpStart work plan identify a the envisioned NWC campus. number of initiatives that are critical for achieving a. Update trends in global agriculture that will the NWC economic and business success, these influence demand for Colorado products in initiatives include, but are not limited to: existing and emerging end-markets. a. Development of a building with laboratory b. Complete interviews with companies in the NWC influence area, for the purpose in specific NWC economic clusters to of locating and growing cluster-identified understand specific dynamics and sector firms into the area to begin building the linkages/needs, as well as evolving business cultural connections and provide workforce requirements, both short- and a location where the scientific and applied long-term. research can be commercialized and c. Identify connections and systems which will created into business enterprises. enable serendipitous collisions between b. Further strengthen global business businesses, researchers and thought leaders connections through Foreign Direct causing an environment of innovation and Investment (FDI) and export development cross cluster opportunities or solutions. activities (building on City and State d. Assess the extent of and capacity within resources) to identify and foster export the supply chain in Colorado and the Front ready companies, linking them with global Range for manufacturing, to understand market opportunities. source markets for raw materials, B2B c. Establish an NWC Innovation Investment products and services, and commodity Fund to support growth of agribusiness flows, as well as local global end markets opportunities that align with identified for finished goods. priority sectors. Federal agencies such e. Understand the existing and evolving as the U.S. Department of Commerce, economic development strategies for Economic Development Administration key areas in the Agriculture Innovation should be pursued for funding.

150 City and County of Denver Local Impact global reach

d. Identify potential neighborhood businesses h. Continue collaborative partnership 8

with potential interest and capacity development work between Denver Water Conclusions (existing or to be developed) for prime and CSU at NWC. or sub-contracting projects related to i. Develop a 10-year job training plan that the infrastructure, public and/or private links with agribusiness opportunities. building construction, or other needed Possible workstreams include: services and products, 1. Focus on Science, Technology, e. Build on the existing workforce data to Engineering, and Math (STEM) better link neighborhood residents with job programs at the K-12 educational training, and connect firms with capable levels. employees. 2. Increase deliberate linkages between f. Actively recruit and grow existing firms companies, schools, and workforce in agriculture-related sectors to Denver, intermediaries. with a goal of locating or relocating these firms (at the appropriate time) in the NWC 3. Align training priorities with end market influenced area. industries that have growth prospects. g. Host partner organizations and programs to provide technical business assistance in the co-working laboratory and flex pace building – serving building and area businesses.

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CITY AND COUNTY OF DENVER LOGO GUIDELINES

These guidelines demonstrate how to correctly use the City and County of Denver logo. UPDATED 2013

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