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|City Manager, Don Williams, right,
whispers to Mayor Pielin before the
Council meeting begins Jan. 8, 2008.
|Loveland - Feb. 6, 2008
Colorado Vnet, a Loveland company, asked the Loveland City Council for help in moving its existing employees plus 14 more now in Longmont to somewhere else in
Loveland once a location is found. A little more than two weeks later, the City Council voted to direct staff to draw-up a resolution that will give Colorado VNet
$900,000 as a result of moving 14 employees to Loveland and with the expectation that more jobs will follow as the company grows in the future.
The public was not allowed to speak nor were the two staff alternatives provided (Option A or Option B) provided to the public while they were discussed by the
council. The proposed resolution will likely provide incentives for future jobs with the hope the company can grow to employ a total of 450 people as they projected
in their presentation to council.
The company founder, Bill Beierwaltes, provided the council his own life story beginning with his employment by HP in the 1960's while slowly winding through his
education and other experiences from the 1970's to his creation of Colorado VNet. Beierwaltes talked about 5 other companies he was involved in creating that were
later sold or merged into other enterprises.
As the discussion regarding the incentive plan was wrapping-up some two hours later, someone called a plea from the audience to be allowed public comment.
Councilman Klassen finally pointed to his colleagues and the Mayor that he could hear people calling out to comment to which the Mayor explained his reason for
ignoring the plea by stating;
"There are people way out in the audience who want to comment on this and we don't even have a resolution at this point in time so when that comes
back I will be happy to take public comments."
The City Attorney, John Duval, followed-up the Mayor's comment by reminding the Mayor for the record that Colorado law will require public comment before the
resolution can be passed since it will appropriate $900,000 of taxpayer money. Members of the audience were caught in a Catch 22. While the applicant was allowed
to slowly describe (literally) his entire life story to the Council, no members of the audience could comment on the issue. This is because during the earlier time for
public comment called "public reports" no one is allowed to address an item already on the meeting agenda presumably because that time will be allowed later when
the item is raised.
Councilman Kent Solt pointed to the fact the City of Loveland, in Option B, would be required to give a upfront payment of $500,000 whether or not the company
could create a single new job in the city. In addition, Councilman Solt pointed to inaccuracies in the staff report where the council was told the money would require
the company "create" a specific number of new jobs when, in fact, the proposed agreement was over how many jobs the company actually had (meaning the existing
64 in Loveland and 14 in Longmont) thus 78 must be deducted from the number the report stated they would need to be created. In other words, Option B called for
the company to "have" 250 jobs by a date certain and not "create" 250 new jobs in Loveland.
Solt also pointed to the fact everyone agreed at the council retreat to forge a new policy on what kind of incentives would be offered and what would be required to
provide the incentives. He questioned the current method of deciding on an ad hoc basis instead of first requiring some fundamental information about the company.
He pointed to the fact Ft. Collins doesn't provide cash incentives to companies but they also require some basic information before considering other incentives. For
example, Solt stated the City of Loveland should probably examine a P&L (profit and loss) statement for the company and know a little more about the validity of the
basis for the claims of expected future growth as a standard criteria for those seeking help from the city when re-locating in Loveland.
Solt also pointed to the history of the business development program saying there is no precedent for providing cash incentives versus the more standard fee
waivers. He expressed concern over the risks involved in providing such a large amount of money especially since the recent downtown facade program for
downtown Loveland at $150,000 was the largest amount allocated to date.
David Clark agreed with many of Kent's comments but qualified his support by stating, "I am one who is not very well educated on how to do that" and encouraged
staff to hire experts to guide the council on how to proceed in the future. He also reverted to a common tactic of the previous City Council be trying to make the
debate over whether the applicant could be trusted as a person. Clark said he had known of the applicant for many years and had faith he would succeed in bringing
the additional jobs his plan contemplates in the future. Colorado VNet is a limited liability corporation so with the lack of any personal guarantees to the City of
Loveland by Mr. Beierwaltes, his personal credit, standing in the community or reputation would do nothing to ensure the city is paid if he folds the company or sells
it to a new owner.
Councilman Cecil Gutierrez referred to a presentation made to the Council the previous Saturday during their annual retreat by Rocky Scott (an employee of
McWhinney Enterprises and advocate of cash incentives for economic development). Scott told the Councilors that during his time heading an economic
development council in Colorado Springs they lost a few opportunities to Pueblo to bring primary jobs because Pueblo offered cash incentives and Colorado Springs
did not. The anecdote was provided to Loveland's City Council was to include cash incentives in any future policy regarding future economic development incentives.
Gutierrez stated he has family in Pueblo and happens to occasionally read the local newspaper (Pueblo Chieftain). By coincidence, Gutierrez pointed out the very
same day Rocky Scott was providing this information to the Loveland City Council the local paper in Pueblo, Pueblo Chieftain, reported the City of Pueblo is suing
Adam Aircraft, the very company provided incentives that Scott was touting, for $2.3 million (read the article "City to seek $2.37 million from closed Adam
Aircraft"). Gutierrez stated the very same article also noted Pueblo lost the other two companies that received cash incentives.
Gutierrez stated given these facts he would not be supporting any ad hoc gesture to provide cash incentives.
Glenn Rousey responded to these comments by saying, "I would like to call for the motion."
Mayor Pielin responded that Larry Heckel still wanted to speak and Darryl Klassen also wanted to make additional comments.
Klassen paid lip service to the objections raised by two of his colleagues but voted in favor of "Option A" while Heckel did the same. Option B failed on 6-3 vote and
Option A passed with Councilmen Gutierrez and Solt voting against the direction to staff to prepare the ordinance.
Colorado State law provides citizens the right to speak on the resolution appropriating the finds for the cash payments to Colorado VNet when it comes back to the
City Council likely in the next couple weeks.
|Mayor Pielin Denies Public Chance to Speak