Colorado Springs Regional Economic Development Corp.’s job numbers a mystery [Colorado Springs Business Journal, The (CO)]

Amy Gillentine; Amy Gillentine

Colorado Springs Regional Economic Development Corp. documents tout that the organization has brought more than 19,000 jobs to Colorado Springs during the past decade.

But that number isn't accurate.

The EDC keeps two sets of numbers, one that is the number of jobs companies say they expect to create when they move to the city, and another that tallies the actual number of jobs created.

The first set of numbers is reported to the organizations that fund the EDC: taxpayers and private companies listed as "major investors."

The Colorado Springs Business Journal is a major investor with the EDC.

The second set is seen only by those inside the EDC, and the differences between the two numbers is significant in some cases.

Minnesota-based Lion Precision, which makes measurement sensors, made a Colorado Springs acquisition in 2002, and the EDC counts it as a local company that had planned to create 10 jobs.

COO Shanda Osiecki said Lion inherited one Springs employee through the acquisition, but that Lion Precision never had offices here.

"We don't do business there," she said. "I am not sure where they got those numbers."

EDC Executive Vice President of Marketing David White disputes that claim, saying they had four employees at their peak.

Another company HemoGenix, a high-tech biological research firm, moved to the Springs in 2003 and announced it would create 60 jobs. The EDC still lists HemoGenix as having 60 jobs, but CEO Ivan Rich says the company only has six.

RockShox, which makes high-end cycling components, is headquartered in Chicago but has a local research division that employs 82 people.

The EDC lists the company as having 350, a number RockShox officials say they never reached in the Springs.

CareCore National, a benefits management company, moved some of its administrative operations here in 2004 and announced 330 jobs.

They have 162 employees at their local offices and 162 work remotely. They plan to hire 11 people during the next three weeks.

But the projections aren't always overly optimistic. Sometimes companies add more than the announced number of jobs. But even additional jobs aren't released by the EDC -- throwing the actual number of jobs even more into doubt.

WideOpenWest, a <location value="LU/us.co.denver" idsrc="xmltag.org">Denver-based cable operator, opened a call center in the Springs and announced 50 jobs back in 2000. In 2007, the company expanded and announced that it expected to create 180 jobs. Today, they have 350 people working in the Springs.

White cites DPix, a company that moved here in 2006, as another success. DPix has more jobs now than the 125 announced in 2006 -- although White wouldn't say how many -- and moved its company headquarters to the Springs.

The fact that there are two sets of numbers came as a surprise to Colorado Springs City Council President Scott Hente.

"This hits me out of the blue," he said. "I count on those numbers to be right."

Taxpayers, through City Council and Colorado Springs Utilities, provided $310,000 of the EDC's $1.4 million budget in 2010. The county kicks in about $75,000, and the major investors supply the rest.

Without the hard job-creation data, neither taxpayers nor investors can gauge the EDC's effectiveness.

"We could release an aggregate number, but there are a lot of stories behind that -- why jobs aren't here," White said. "It would take a lot of work to explain the number."

That extra work might be necessary, said C.J. Moore, spokeswoman for Kaiser Permanente, one of the major investors in the EDC.

"I think they've missed a step here," she said. "If we don't have the number, how can anyone know what the actual employment situation looks like in the Springs?"

White said counting jobs is a complicated task.

"This is not an attempt by EDC to hide information," White said in an e-mail. "It is the nature of our business."

Companies drive the process, he said.

"Sometimes, obviously, we think their number is too high," he said. "But who are we to tell the companies what they are or are not going to be able to do in Colorado Springs?"

And while they check annually on a company's employment figures, it's done with an understanding that the numbers will be kept confidential.

"We respect their privacy," White said. 'We gather yearly job counts from them, but the way we get those numbers is by assuring them that we will keep their information private. When a project is completed, the company issues a press release and/or holds a press conference. Sometimes they do neither. Most companies are OK with stating job projections. Some are not and wish to remain anonymous. EDC numbers reflect what the company wishes to disclose to the public."

EDC investor Cari Schaffer, CEO of Add Staff, says she has "total faith" in the EDC.

"If I didn't, I wouldn't invest," she said. "And I guess they are only trying to protect the companies themselves -- the ones they've gotten to know intimately through the process, so the public isn't asking them, 'Why didn't you create as many jobs as you said you would.' It does make sense."

It doesn't make sense to Hente.

"I plan to discuss this with Dave (White)," he said. "It's a surprise to me that we don't have job creation numbers. I'd agree we need the whole picture."

City councilwoman Anglea Dougan plans to bring it up in her role on the Colorado Springs Utilities board of directors. Council members do double-duty as the board for the municipal utilities.

"I am concerned," she said. "In this day and age, with jobs so critical, we need real numbers. The city is giving money to groups based on information that we think is accurate. To find out it isn't -- it's amazing to me."

Moore also had an issue with the secrecy.

"This is a question of transparency," she said. "It bothers me. If they have a double set of numbers, they should release both sets."

White said releasing the figures would require approval from the EDC's board of directors. But that doesn't seem likely.

Board member Debbie Chandler, who is CEO of Colorado Springs Health Partners, said she has no problem with the EDC's accounting.

"There are other ways to count success -- wages, for instance. The wages for the jobs they bring in are high-wage jobs," she said. "I think they are doing a great job there."

Board member Bill Berenz, president of American National Bank, which also is a major investor, said he stands behind the EDC's numbers and practices.

"I think we'd only need to release that number if it became a major issue or concern," he said. "Then, we might have to. But I don't think there's anything fraudulent going on."

White thinks the organization's success speaks for itself, and any further delving is merely a "distraction."

White points out the city audited the EDC at the request of the city council. While it found an 11 percent discrepancy, White stands behind the numbers.

"We've vetted these numbers," he said. "We've been through this with the city audit. Why are we having to do this again?"

The city audit covered a single year, 2009-2010 and checked with selected companies to make sure their jobs announcements matched the EDC's numbers. The audit didn't cover actual jobs created, and found an 11 percent discrepancy, based on an outside consultant counting one job announcement twice.

The question of value

According to the EDC's rules, it can only count jobs from primary employers, those that derive most of their revenue from outside the Pikes Peak region. In addition, it can also count jobs once in a five-year period, and it must "deliver value" to prospective companies.

But value is not easily defined.

"It can mean a lot of things," White said. "Sometimes we have to hold their hand the entire time. Sometimes, we have the whole dog- and-pony show. Sometimes we just have to put them in touch with the right people at the city for rapid response treatment for permits."

Hemogenix's Rich said the EDC was instrumental in moving his company to Colorado Springs, while Northrop Grumman officials say it helped very little with their expansion.

Northrop Grumman, a defense company that does some work in the Springs expanded in 2005. The EDC lists the expansion, and 450 jobs it announced, as one of its successes. Today, Northrop has a hefty presence in the Springs -- more than 1,000 employees in offices near Schreiver and Peterson Air Force bases.

But Northrop Grumman spokesman Randy Belote said the expansion required little EDC assistance.

"We had help from the Air Force bases, but that's it. We had a presence here for decades, it didn't require much help," he said. "And I don't think it created 450 jobs all at once."

But White also has an explanation for that.

"Sometimes the people who help make the deal aren't still with the company," he said. "They move on, and when you call years later they don't know we helped."

Questioning the EDC's success doesn't benefit taxpayers or investors, he said.

"Is it worth paying the EDC to do this?" he asked. "Anyone with half a brain can tell that it is. Progressive Insurance and T. Rowe Price are here because of the work we do. It's important work. And being constantly under scrutiny, constantly under the microscope, isn't beneficial."

White said the way the EDC tracks jobs is one of the "most conservative in the country."

It's at least the way other similar organizations count jobs.

In Oklahoma City, the Chamber of Commerce is responsible for economic development and tracks jobs much the same way, said Vice President of Economic Development Robin Roberts Krieger,

"Organizations (like ours) don't create jobs, companies do," she said. "We're very careful about that. We track announcements, and we go back and keep the actual jobs data in a confidential database. We keep conversations private, because if we announce a company hasn't done something, they'll stop talking to us."

Dougan said that explanation isn't acceptable.

"I understand that this might be the industry standard," she said. "But in this day and age, we need real information. Jobs are critical right now. We give the EDC money based on jobs -- and the information they give us. It's amazing to me that this is the way they do things."

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CompanyYear AnnouncedStill Here?Jobs Announced

.

Cardio Continuum2000No25

.

Comsilica2000No / 200125

.

Hansen Corporation USA, Ltd.2000No / 200150

.

Intel Corporation2000No / 20082,200

.

On-Line Systems Support / AESBUS KNOWLEDGE SOLUTIONS2000Yes10

.

RegNet - The Registration Network2000No23

.

RockShox / SRAM CORPORATION2000Yes403

.

VoiceStream Wireless / T-MOBILE USA, INC.2000Yes550

.

Tribal Voice2000No / 2000100

.

WideOpenWest2000Yes50

.

Wireless, Inc.2000No / 200020

.

Zurich Financial Services / ZURICH INSURANCE SERVICES2000Yes194

.

Actiontec Electronics, Inc.2001Yes500

.

ATMI Fab Services2001No / 200225

.

Catalina Research, Inc.2001No / 2007100

.

Classen Computer Consulting, Inc.2001No / 200718

.

ITT Advanced Engineering & Services2001No / 200450

.

Linear Technology2001Yes73

.

The Liaison Council on Certification for the Surgical Technologist (LLC-ST)2001No / 200510

.

Gray Hawk Systems Inc. / SECURITY & MISSION ALLIANCE2002No / 200620

.

Lion Precision2002Yes10

.

Myers Internet, Inc.2002No / 2007130

.

Pavestone Company2002Yes100

.

Blue Mountain Avionics2003No / 200420

.

Electro Energy, Inc.2003No / 201053

.

HemoGenix LLC2003Yes60

.

ICT Group2003No / 20071,050

.

St. Paul Fire & Marine Insurance Company / THE TRAVELERS COMPANIES2003Yes50

.

Barrios Technology, Inc.2004No / 200910

.

CareCore National2004Yes330

.

Computer Generated Solutions / VOLT - VMC CONSULTING2004Yes360

.

ConfigureSoft, Inc. / EMC2004Yes300

.

CSAA / AAA OF NORTHERN CA2004Yes500

.

EFT Source, Inc.2004Yes50

.

Empirical Testing Corporation2004Yes8

.

FedEx Ground / FEDEX FREIGHT2004Yes48

.

Focus Publications2004No / 200915

.

<p>Provident Pharmaceutical2004No / 201070

.

Sharene Sportswear, Inc.2004Yes15

.

Westwood College Online2004No / 2011125

.

Barclays / FIRSTSOURCE SOLUTIONS2005Yes450

.

Chef's Catalog2005Yes270

.

Northrop Grumman Corporation2005Yes450

.

Quantum Corporation2005Yes37

.

RT Logic, Inc.2005Yes168

.

SAIC (Science Applications Int'l Corp)2005Yes400

.

SI International / SI Int'l Telecom / SERCO2005Yes100

.

SkyWest Airlines2005Yes200

.

Xanthus Higher Education Loan Program2005No / 2007100

.

Accounts Receivable Management, Inc..2006No / 2010100

.

Aerospace Corporation, The2006Yes12

.

Bal Seal Engineering2006Yes115

.

Community Bible Study2006Yes35

.

dpiX, LLC2006Yes125

.

Glassical Designs Inc.2006Yes10

.

Oceania Cruise Lines2006No / 200925

.

Pantel Systems, Inc. / PSI CORPORATION2006Yes20

.

PRC / RYLA2006Yes550

.

T.Rowe Price Associates, Inc.2006Yes650

.

Vincera, Inc.2006No / 200740

.

Seagate Technology / XIOTECH2006Yes60

.

America's Friends of the Blind / WORLEY ENTERPRISES2007Yes50

.

Buywell International2007Yes30

.

Coast IRB2007No / 2009180

.

FedEx Data Center2007Yes105

.

Frontier Airlines2007CANCELLED225

.

Luce Research2007Yes100

.

Marvell Semiconductor2007No / 2009100

.

MediaNews Group Interactive2007Yes200

.

MyHealthFunds, Inc.2007Yes200

.

PRC / RYLA2007Yes450

.

Quantum Corporation2007Yes90

.

Spectranetics / THE SPECTRANETICS CORPORATION2007Yes300

.

Stealth Technologies / STEALTHCOM SOLUTIONS, INC.2007Yes50

.

Tech for Less2007Yes100

.

Telematrix / CETIS, INC.2007Yes10

.

Term 1012007Yes40

.

USA National Karate-do Federation2007Yes2

.

USAA2007Yes200

.

WOW! Internet, Cable, Phone / WIDE OPEN WEST2007Yes180

.

ATB Services2008Yes30

.

Braxton Technologies2008Yes100

.

CodeOne2008Yes300

.

Cyber Command2008CANCELLED100

.

Diversified Machine Systems, Inc.2008Yes90

.

MEI Technologies2008Yes100

.

Neumann Systems Group2008Yes75

.

Nexgen Pharma, Inc.2008Yes100

.

SESC2008Yes100

.

Springs Fabrication, Inc.2008Yes108

.

Sticky Sheets2008Yes30

.

TechConFed2008No / 201030

.

Verizon Wireless Data Center2008Yes10

.

Wells Fargo2008Yes100

.

Women's Professional Rodeo Association2008Yes7

.

Affiliated Computer Services Inc. (ACS)2009Yes600

.

Alliance Financial Partners2009Yes37

.

Association of Gospel Rescue Missions2009Yes6

.

Billet Racing Products2009Yes10

.

CodeBaby2009Yes500

.

Convergent Performance, LLC2009Yes30

.

FedEx Services Corporation - Data Center2009Yes68

.

FirstSource Solutions, Ltd.2009Yes150

.

Hewlett Packard - Data Center2009Yes10

.

Jabil, Inc.2009Yes15

.

NEK2009Yes80

.

Ranch Hand Truck Accessories2009Yes10

.

WP Aerospace, Inc.2009Yes30

.

Affiliated Computer Services Inc. (ACS)2010Yes450

.

ARES Corporation2010Yes10

.

Auxsol, Inc.2010Yes10

.

Everest University Online2010Yes600

.

Granada Corporation2010Yes110

.

NCT Technologies Group, Inc.2010Yes18

.

USAA2010Yes200

.

Space Foundation2011Yes23

.

Outreach, Inc.2011PENDING162

.

Xiotech Corporation2011Yes30

.

Cosmic Advanced Engineering Solutions2011Yes20

.

Howell Precision Machine & Engineering, Inc.2011Yes7

.

Olson Motor & Control Co., Inc.2011Yes12

.

Chapman Foundations2011Yes10

.

Entegris2011Yes100

.

Walmart2011PENDING30

.

Receivable Management Services - iQor2011Yes100

.

Agilent Technologies2011Yes131

.

.

TOTAL JOBS ANNOUNCED 2000 - 2011YTD

19,128

.

.

Company name / COMPANY NAME is equal to lower case name is company announced and UPPER case name is how the company is currently known

.

.

.

Company cancelled project after announcement was made

.

.

*Please note that after companies announce an initial investment into Colorado Springs, they will return to EDC for assistance with expansions.

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