Calif. fiscal woes could draw development to Colo. Local developers are keeping a close eye on the fiscal problems in California, according to a panel discussion at the annual conference of the University of Colorado Real Estate Council.
Incoming California Gov. Jerry Brown wants to shut down the state's nearly 400 redevelopment agencies and shift $1.7 billion to bridge a $25 billion budget shortfall.
That could open a door to draw development to Colorado and other surrounding states, said John Shaw, president of McWhinney Enterprises in Loveland.
Shaw said that when he heard the news, he contacted Tom Clark of the Metro Denver Economic Development Corp. and promoter of the "Colorado Loves California" campaign, about a fresh push to lure business from the Golden State.
But panelists don't want things to get so bad in California that local governments start defaulting on their debts. That would paralyze municipal-bond issuance nationwide, Shaw warned.
"We have serious reservations about buying property in California," said Paul Hogan, a managing principal with MillerGlobal in Denver. "There are a lot of sharks in the water."
Arizona also has done a better job of profiting from California's woes than Colorado, Hogan added, as the snow fell freely outside the Grand Hyatt Denver downtown.
The panelists cited easing credit, a greater willingness to invest in commercial real estate again and falling vacancy rates as positive signs.
They also noted a trend coming out of the recession — tenants are trying to pack more employees than ever into their spaces.
The old ratio of 2.5 to three workers per every 1,000 square feet of space before the recession has moved up to five and could reach six, Shaw said.
That higher density will make buildings designed for office-loving baby boomers obsolete and will require more heating and cooling capacity, faster elevators and more parking spaces.
Source : http://www.denverpost.com
