In Colorado and the mountain West, site selectors get savvy on water supply

Most water-intensive businesses eyeing a location in Colorado already know this isn’t exactly the Land of 10,000 Lakes.While that may naturally deter some manufacturing companies from expanding to the Centennial State, its blend of Western entrepreneurialism and an educated workforce has always more than made up for those moments by attracting other industries. That’s according to Larry Gigerich, executive managing director of the Site Selectors Guild.In fact, Colorado has been a “rising star” among site selectors nationwide for more than a decade, said Gigerich, who heads up the trade organization from his site selection company in Indianapolis.That has been evident in the Denver metro area’s rapid rise in population over the last ten years, which contributed to a booming real estate market and dozens of new companies.But for businesses mulling a location in the area, the question of whether its expanding population can be sustained by local water supply has grown in importance — not just for industrial space, but for offices and large headquarters, Gigerich said.”One of the things we are seeing our clients being more and more conscientious about is making sure when people move to an area, that there are not issues with water,” Gigerich said.That is in part because water is intrinsically tied to development, and down the road, to the availability of a talented workforce, he said. Now more than ever, he said talent is the No. 1 driver behind where a company chooses to plant its roots.The state’s economic development leaders say they don’t spend too much time worrying about whether the state has enough water to sustain an economic boom. They say Colorado and its municipalities have planned well for water storage projects, and new innovations that more effectively reuse and conserve water are helping.As water supply grows more scarce across the nation, though, the mountain West faces competition from other water-rich states that are already marketing that asset, Gigerich said. To prepare for a potentially arid future, the state’s business development efforts must remain in step with enough water to sustain growth.Manufacturers welcomeIn Denver, water isn’t often a “top three” issue for companies considering a move here, said Deborah Cameron, chief business development officer for Denver’s economic development officeFor those that are high consumers of water, such as manufacturers or beverage producers, Cameron said ensuring a secure water future is often a simple conversation with Denver Water, a public utility that serves the entire city.expandThe Coors plant in Golden, owned by Molson Coors, is a high-consumptive water user. The plant says water is involved in nearly every part of the beer manufacturing process. Kathleen Lavine, Denver Business Journal”They have taken a very long-range view and attained water assets that are going to position Denver to be competitive, from an economic development standpoint, for a long time,” Cameron said of Denver Water.As a result, the city is far from shutting out companies that would bring in new manufacturing roles, she said. The area critically needs middle-wage jobs that help more people afford to live here and balance the area’s economy with diverse job roles, she said.Such is the case for the state’s interest in attracting chip manufacturers and others in the semiconductor supply chain. Some of those companies are large water users, but Cameron said the city has the go-ahead from Denver Water to continue conversations with the industry.At the Colorado Office of Economic Development and Trade, semiconductor talks are an example of the more nuanced discussions that state officials have about what companies are the right fit for the state, said Mike Landes, the department’s senior business development manager.Of course, companies that know they need access to large amounts of water might not even be looking to locate in Colorado.”I would say the market itself knows what its limitations are,” Landes said.At OEDIT, he said the job then becomes more about what other parts of the semiconductor supply chain might find the state attractive.“These are just conversations we have internally where we say, ‘How do we in economic development do this in a way that keeps in mind the needs of the communities and constituencies’” in Colorado, he said.Residential developmentPerhaps water’s biggest area of business-related impact is in residential and commercial development, said Jason Brinkley, a Denver-based partner at the law firm Snell & Wilmer.While requiring new developers to bring their own water supply to their projects is not a new phenomenon — counties south of Denver such as Douglas, El Paso and Elbert have long required it — water sources have been getting more difficult to find, Brinkley said.expandA view of Douglas County from Bluffs Regional Park.Mark Harden | Denver Business JournalThat, of course, adds to the cost of development and housing overall — an issue that has been particularly salient in Colorado politics.Drought in Arizona made national headlines in recent weeks after the state said it would not grant certifications for new developments in the Phoenix area due to a lack of groundwater supply. Some in Colorado have referred to the action as a cautionary tale for other states in arid climates.But Snell & Wilmer told its clients in a recent notice that Arizona’s groundwater is at present in good condition and that ample opportunities exist for developers to continue.In Colorado, getting access to a water supply could be challenging, but it is far from halting development altogether, Brinkley said. Even in the future, he said new technologies emerge every day that could help developers and other businesses stay sustainable, such as desalination plants that treat ocean water to be used on land.”I don’t see a lot of moratoriums on development because of water,” he said. “It’s just a condition to be approved.”expandJason Brinkley, Denver-based partner at Snell & Wilmer.Snell & WilmerLooking aheadTo give prospective companies a better idea of what their water supply might look like, Gigerich said his company uses population growth rates and water consumption trends from the past ten years to project needs for the future. He also factors in whether those consumption rates have changed in recent years.”The good news is, you see a lot of areas being really smart about managing their water resources,” he said.James Witwer, a water lawyer for Denver-based Davis Graham & Stubbs, said those projections can give businesses a good idea of the future. But as the water supply grows more erratic from year to year, he said his advice to clients is to be more wary of water-related risks.expandJames Witwer, a water attorney with Davis Graham & StubbsDavis Graham & Stubbs”The question that has come up in these evaluations is, how reliable, really, is a backward look at historical use to predict the future anymore?” Witwer asked. “I don’t think you’re doing your job anymore if you don’t at least carve out a comment to a client that the past is not necessarily a predictor of the future.”For businesses needing an industrial-sized tap, there will always be a degree of due diligence needed, he said.Even so, he calls Denver one of the “Cadillac water systems of the West.” The city knows how to provide and price it, and municipalities have redundancies in place for dry years.”That is essentially a turnkey operation for business,” Witwer said.

See the full article on Arizona residential development, or, read more Arizona real estate investing news. Feel free to share our site with your investor friends.