Denver and the Economics of a Winter Olympics

Brandon Figliolino

PUAD 6600 Economic Development

Denver and the Economics of the Winter Olympics

March 4, 2018

            An exploratory committee in Colorado is investigating the feasibility of Denver hosting a future Winter Olympics.  Their discussions have renewed the debate over the economic benefits of hosting such a large-scale event.  Proponents of the games believe it could be a catalyst for economic growth, not just in Denver but across the state.  However, opponents are skeptical of such benefits and believe the Games would leave Denver paying off massive amounts of debt.

            In the past, host cities have focused on public funding to build the necessary infrastructure for the Games (McBride, 2018).  Over the decades, this infrastructure has proven to be expensive.  This is a primary economic argument against hosting.  Since 1960, no Olympic Games has finished under budget, and only a few host cities have made a profit on them (Aleem, 2018; McBride, 2018).  If past Games’ performance are a good predictor of performance, it is unlikely that revenues would exceed expenditures if Denver undertook hosting.

            Opponents also argue that the infrastructure that is built for the Olympics is not sustainable.  The Olympic Stadium in PyeongChang is set to be demolished after only several days of use because it is too big to be used again (Aleem, 2018).  Infrastructure that is not torn down is left to decay, all while the government makes payments on the construction loans used to build it.  In Rio, for example, stadiums and highways were abandoned, and athlete housing has yet to be converted to affordable housing (McBride, 2018). 

The opportunity costs for hosting are also extensive.  The money used for Rio’s infrastructure could have gone towards cleaning up pollution in their rivers, which might have drawn more tourists and businesses to the area (McBride, 2018).  Land use can also be an expensive opportunity cost, especially if the use is abandoned after the Games or not aligned with the needs of the community (Applebaum, 2014).  Lastly, taking on debt for the Olympics might make it more difficult for host cities to secure financing for future projects (McBride, 2018).

            Supporters of their cities hosting the Olympics believe that the Games can act as a catalyst for economic development.  While there are mixed results, some host cities have seen a positive impact on tourism during and after hosting an Olympics (McBride, 2018).  This additional revenue may not have come without the help of the Games.

            Hosting an Olympics also spurs major development projects, proponents argue.  Such projects can include transportation infrastructure, like highway improvements, railways, and airports (Aleem, 2018; Murray, 2018).  Transportation projects, when done well, can lead to economic growth (Adams & VanDrasek, 2007).  Because of its size, hosting an Olympics would require a host city to invest in the transportation system, which would improve mobility for residents long after the Olympic torch is extinguished.  

The Olympics exploratory committee in Colorado is moving forward with their investigation into the feasibility of hosting.  Over the past several months, they have engaged with community members and stakeholders to identify whether Mayor Hancock and Governor Hickenlooper should submit a future bid.  A primary focus of the committee is reducing the negative effects seen in past Olympics.  The committee is doing this by forging partnerships and leveraging resources. 

To reduce taxpayer costs, they are looking to finance most of the Games privately.  Athlete housing, for example, would be built by a private developer, and any expansion of I-70 West would be managed by a public private partnership (Dutta, 2018; Murray, 2018).  Supporters of this plan believe using private financing, coupled with federal funds, would eliminate potential risk to taxpayers if the Olympics fail to generate projected revenues, since very little public money would be used to pay for it.

The committee is also looking at how it can leverage current assets.  Instead of constructing large stadiums, they are hoping to use utilize existing properties, like Coors Field and Mile High Stadium (Murray, 2018).  Any other required stadiums, including a venue for skiing, would be privately financed and temporary, so it could be dismantled afterwards (Dutta, 2018).   

Denver should approach the Olympics with caution.  Much of the opposition to hosting the Games comes from concerns over how to pay for it (Hernandez, 2018).  While the committee plans on having private partnerships fund projects, they have no identified any partners yet (Hernandez, 2018).  If Denver fails to secure financing partners, taxpayers may have to pay to the developers’ share.  Some proponents argue that hosting the Games would bring in federal funds to improve infrastructure, including I-70 (Hernandez, 2018).  The President’s infrastructure plan, however, shifts most of the funding responsibility to localities, so federal funding may be minimal (DePillis, 2018).

            Compatibility is another issue that needs special attention.  The committee discovered that hosting would require Summit County to build 12 to 15 story housing structures (Dutta, 2018).  In a county with small-scale towns, such large buildings would be out of place, and may not be utilized to full capacity much after the Games conclude.  Infrastructure that is built but does not provide long-term benefits to the communities might become derelict and cause negative externalities, as seen with Rio’s athlete housing projects (McBride, 2018). 

            Lastly, the committee should look at the jobs that would be created by hosting.  Many of the jobs that come with the Olympics are in construction or are short-term (McBride, 2018).  For a state that is experiencing a shortage of construction workers, it may not be realistic for Denver to find skilled workers to build the infrastructure (Douglas, 2017).  Focusing on attracting businesses that can bring in long-term, high-paying jobs may be a better return on investment for city and state staff than courting the Olympics.

            Hosting an Olympic Games is neither easy nor affordable.  It poses challenges and opportunities for cities and their regional partners to undertake.  If Denver does decide to bid, it will be imperative for decision-makers to review past Games’ successes and failures, and work with community and business partners to reduce risks.  Hosting is a challenge, and it will take thoughtful planning to ensure it produces more economic benefits than costs.

References:

Adams, J & VanDrasek, B. (2007). “Transportation as Catalyst for Community Economic Development.” Center for Transportation Studies. Retrieved from: http://www.cts.umn.edu/Publications/ResearchReports/reportdetail.html?id=1546

Applebaum, B. (2014) “Does hosting the Olympics actually pay off?” The New York Times. August 5, 2014. Retrieved from: https://www.nytimes.com/2014/08/10/magazine/does-hosting-the-olympics-actually-pay-off.html

Aleem, Z. (2018) “Why almost no one wants to host the Olympics anymore.” Vox. February 21, 2018. Retrieved from: https://www.vox.com/world/2018/2/23/17008910/2018-winter-olympics-host-stadiums-cost-pyeongchang

DiPillis, L. (2018) “Trump unveils infrastructure plan.” CNN Money. February 12, 2018. Retrieved from: http://money.cnn.com/2018/02/11/news/economy/trump-infrastructure-plan-details/index.html

Douglas, E. (2017) “Colorado faces massive shortage of construction workers. A fix won’t be easy.” The Denver Post. July 2, 2017. Retrieved from: https://www.denverpost.com/2017/07/02/colorado-massive-shortage-construction-workers/

Dutta, D. (2018) “2030 Olympic bid for Denver would require major land, housing commitments for mountain towns.”  The Summit Daily. March 1, 2018. Retrieved from: https://www.summitdaily.com/news/2030-olympic-bid-for-denver-would-require-major-land-housing-commitments-for-mountain-towns/

Hernandez, E. (2018) “Cross-section of opinions at latest Olympics bid listening session.” The Denver Post. March 4, 2018. Retrieve from: https://www.denverpost.com/2018/03/03/olympics-bid-listening-session/

McBride, J. (2018) “The economics of hosting the Olympic Games.” Council on Foreign Relations. January 19, 2018. Retrieved from: https://www.cfr.org/backgrounder/economics-hosting-olympic-games

Murray, J. (2018) “Cost of a Denver Winter Olympics—and how to pay for it—are chief concerns in bid question.” The Denver Post. February 26, 2018. Retrieved from: https://www.denverpost.com/2018/02/26/how-to-pay-for-denver-winter-olympics/

100 Miles

Brandon Figliolino

100 Miles

February 19, 2018

            It was the last Saturday of June 2016. I had spent the past five hours with my butt on the saddle and my feet clipped-in to my pedals. My face was burnt from exposure to the sun, and my arms were caked in layers of sunscreen and insects. I hydrated myself with water and Gatorade, snacked on granola, apples, and lots of bananas. I relieved myself in hot, stench-ridden portable toilets. My bicycle and I shared the road with hundreds of other cyclists. My Instagram was updated frequently with spots I had visited: Erie, Niwot, Hygiene, Masonville, to name a few.

            It was the annual Colorado BIKE MS 150 ride, and I was having the time of my life.

            Having participated twice before, I was now a seasoned rider. I had cruised along at a great pace—the 500 miles of training that spring served me well! So far that day, I pedaled 60 miles, through the dreaded Horsetooth Reservoir, which had been a pain-point for me the previous two years. Horsetooth begins with a steady, long incline, before turning into steep switchbacks. It’s miserable, really.  

Despite the adversity that Horsetooth brought me, I made it down the hill. Gaining speed, I clamped my handlebars tight, and let out a triumphant roar.

My stride that day came with a choice. At the foot of Horsetooth, the road forked. Two electronic signs directed cyclists. To the right, we could beeline to the Fort Collin’s finish line, bringing our ride miles to 75 for the day. Cyclists who chose to turn left would add an additional 40 miles to their ride.

For obvious reasons, I veered left.

“Alright,” I said to myself. “Our first century. We’ve got this, right Caden?” I looked down at my bicycle.

He didn’t respond.  

The first year I participated in BIKE MS, I foolishly rode a mountain bike that weighed 30lbs—I could hardly ride the 75 miles before the sun began to set, let alone ride anything more than that.

I can’t remember why I didn’t ride the century my second year. Maybe I was being lazy and just wanted to rest with a beer. It was over 85 degrees that day, after all.

2016 was going to be my year! I was pumped. Nothing was going to stop me from hitting the goal I had just set for myself two minutes prior.

Then the road wrapped right back into Horsetooth. Uphill. Even steeper than before.

Well, shit, I thought out loud.

I jerked the bicycle into a lower gear. And then another. And another.

“Ugh! Why can’t I move?” I muttered to myself.

I couldn’t see any cyclists ahead of me. I looked over my shoulder. Two cyclists turned left, but a dozen others turned right.

Maybe they had the right idea.

At this point, I was crawling, my mojo gone.

As the two cyclists approached me, I did my best to maintain my breathing; there’s nothing more embarrassing than wheezing in front of other people.

“W—wow, this—is a—lot hard—er than I—thought,” I mentioned when they passed.

“Keep your eyes ahead of you and don’t stop. You can do it,” one woman said between deep breaths.

“Th—an—k—s,” I heaved.

Then they were gone. I was left alone. That’s when it started to rain.

I looked up to the sky. “Really? What’d I do?”

During my ascent up Horsetooth, I hadn’t noticed the congregation of heavy rain clouds overhead. They greeted me with pelting rain and blurry vision.

“I can’t see!” I shouted, to no one in particular.

I pulled off to the side of the road—exactly what the cyclist warned me not to do. I took off my sunglasses and stuffed them into my jersey pocket before pedaling onward; it made it easier for me to wipe the rain out of my eyes. With no one around, I decided to motivate myself by muttering profanities.

It made me feel better.

Forty minutes later, I descended Horsetooth, cheering and pumping my fist in the air.

“Take that, mountain! You ain’t got shit on me!”

 The rain had stopped, but the clouds hung overhead.

“Quit being a tease,” I shouted to the sky. “Either rain or get lost, clouds!” I hoped Mother Nature wouldn’t call my bluff; I was soaked, cold, and yearned for the sun’s warmth.

The next stretch of road smoothed out amongst farmlands and pastures. I didn’t see any cars, any other cyclists, or people.

“What up, cows!” I said on more than one occasion. All were too busy to moo in reply.

With the most challenging portion of the route completed, I steadied my pace. Each year I’ve participated in the ride, there were so many participants squished into bike lanes that I began to appreciate the absence of everything but my bike, my thoughts, and the surrounding countryside. Only yard signs with large, black arrows reminded me I was heading north and not any other direct. Mile after mile, there weren’t even volunteers to clap for me or cheer for me or tell me I was awesome.

I started to miss their cowbells, but not that much.

I arrived at a rest area. There were half a dozen cyclists mulling around the snack table. A volunteer wearing a bright orange shirt approached me before I could dismount.

“Hey, man! Congratulations; you’re almost there,” he said with a beaming smile.

“Well, thanks,” I said. “It’s been a little wet.”

He chuckled and pulled something out of his pocket. “We give these out here, but don’t celebrate yet; you still have ten miles to go before you can grab a beer and a shower.”

I extended my hand. He dropped a small round felt patch into my palm. It reminded me of the patches I earned—nay, tried to earn—in Boy Scouts many years ago when I thought it would be helpful to learn how to tie knots and camp outside.

The patch had a yellow border and blue background. The words 2016 BIKE MS CENTURY took up a majority of the space inside the circle.

“You can sew it onto your jersey when you get home,” the volunteer said.

“Thanks! I will definitely do that.” I waved him goodbye and gave the pedals two small strokes and rolled into the parking lot. I found a vacant spot of grass and dismounted. I rubbed the patch between my fingers, feeling the embossed letters brush against my fingertips. The volunteer told me not to celebrate prematurely, but I didn’t care.

This was an Instagram moment.

Thunder clapped overhead. Fearing the ride marshals might close the ride route before I could reach the finish line, I stowed the patch in my backpack, dashed to the row of portable toilets to relieve myself one last time, and was back to pedaling in minutes. I rode solo, and with a renewed sense of accomplishment, I pushed myself to go faster. Within forty minutes, I entered Fort Collins. The clouds had started to dissipate—in typical Colorado fashion—and I could see a few cyclists up ahead. They pedaled towards another pair of electronic signs. Century and Century + 20 miles flashed with arrows in different directions.

I was close enough to the cyclists to hear one of them scoff. “I just went 100 miles! Now they want me to go another twenty? I don’t think so!”

Her friend laughed and I silently agreed. I committed to 100 miles, not 120. My legs were beginning to spaz and if I went any further I might tip over into the fetal position forever.

I reached Colorado State University and slowed down. Passing a statue of their mascot, a large Ram, I cheered, “Go Buffs!” mostly because no one was around to boo at me or flip me off.

I rounded a corner and saw the finish line posts, with volunteers and ride participants flanking each side, screaming wildly as pop music boomed from the speaker system. I waved and cheered back at them, and when I crossed the threshold, I burst into tears.

I opened my phone’s fitness app and ended the workout at 101 miles.

Riding a century is not easy, even for someone who is slender and has practice riding.

I earned that patch, and the beer that followed!

For 2017, I was determined to repeat my success by riding the century again. Unfortunately, I missed the cutoff time by five minutes. For safety reasons, the ride marshals wouldn’t let me go left. I begrudgingly turned right, but I didn’t let that defeat me. When I approached the finish line, people still cheered for me, they still clapped for me, and they still told me I was awesome by clanging their cowbells while singing to a Katy Perry song that played over the speaker system. My ride, albeit shorter, still made a difference. My fundraising for MS still made a difference. I still made a difference, regardless of how many miles I pedaled.

On a whim in 2016, I rode a century. In 2017, I rode 991 miles. For 2018, I’m planning on doing both, and then some. With a positive attitude, confidence in myself, and a lot of sunscreen and bicycle tubes, I know I’ll be in for some great adventures.

For 2018, I have decided to explore more of Colorado (and possibly another state!), so I will not be riding in the Colorado MS 150. I encourage you to support my teammates, the RawHinies by clicking here. Hinie ho!  

Economic Development Roundtable Issue One: Parking Minimums

Brandon Figliolino

PUAD 6600 Economic Development

Issue Roundtable #1: Parking Minimums in Olde Town Arvada

January 29, 2018

            On January 22, 2018, the Arvada City Council rejected a preliminary development plan for a mixed-use apartment building.  The 9-acre site currently sits unoccupied; it was once a parking lot managed by RTD that is no longer in use. If approved, the apartment complex would have created an additional 250 residences for the city. Despite the recommendation for approval by city staff, City Council nixed the plan on a 4-3 vote (Fortier, 2018).

            According to city staff, the project, which was to be developed by Trammell Crow, would have had large economic benefits for the city.  Located just south of the Olde Town Historic District, the luxury apartments would have provided revenues that would “far exceed” the value of the land the city’s urban renewal authority (AURA) sold to the developer (Fortier, 2018).  Because of its proximity to several major commercial hubs, the apartment complex would have afforded residents quick access to many shops and restaurants; the sales taxes generated by those purchases would have gone to the city.

            One reason the preliminary development plan was rejected was due to citizen concerns over parking (Fortier, 2018).  Trammell Crow planned to offer less on-site parking than what was required in the city’s land development code.  Residents feared that by not offering adequate parking, residents would take up valuable spaces in Olde Town and surrounding neighborhoods, inconveniencing others who live near the project.  From an economics standpoint, they could argue that if residents of the apartment building took up parking spaces in the commercial areas, it could discourage others who don’t live within walking distance from shopping or dining in the area.  If that were the case, the city might lose out on sales tax revenues, and businesses potential customers.

            Regardless of the concerns of neighbors, Trammell Crow made the right decision to reduce parking in the project for many reasons.  First, the land they own is relatively small.  By reducing the number of parking spaces, and instead increasing the number of units they could sell, Trammell Crow maximized the property’s potential for generating revenue.  While they could, and most likely would, charge residents a fee to park their car, that fee would be nominal compared to the amount of money they could collect on renting additional units.  Not only does reduced parking benefit Trammell Crow, it also benefits the city by increasing the number of residents who could live, work, play, and shop in the city.  Since they are within walking distance of Olde Town, they most likely would not need a car to participate in Olde Town’s economy. 

            Second, since the project is close to a developing transit corridor, the reduced parking would help incentivize multimodal transportation.  Not only would it help foster wellness and active living, encouraging residents to walk, bus, and bike reduces congestion on the roadways.  This would make commuting easier for city residents who are not close to transit lines and need to use their cars to travel.

            By rejecting the Trammell Crow development, the Arvada City Council is rejecting alternative transportation and encouraging car ownership.  Instead of acting as vanguards for innovative thinking, they are sticking with the status quo—the antiquated land development code.  If a new project is proposed, it will most likely have more parking.  Adding more parking spaces will reduce the number of units available, lowering their profits.  It will also encourage car ownership, which will increase congestion caused by vehicles, and hurt RTD’s revenues from increased bus and commuter rail trips.  While the residents will believe they won they may end up losing, in terms of economic development.

            To better promote the benefits of reduced parking requirements, city staff, AURA, and the developers of future projects should engage with the public more.  Performing extensive outreach in the neighborhoods will help those unfamiliar with economic development better grasp the benefits of such a policy.  With that knowledge, they may be less likely to voice concerns, sparing innovative projects from being shelved.

Fortier, S. (2018) “Council votes down Olde Town Residences development plan.” Arvada Press. Jan. 23, 2018.

            

Candelas

 I used to live on the outskirts of Arvada, Colorado.  Our small neighborhood of single-family homes was surrounded on three sides by expansive farmlands. Trails and open space areas were within walking and biking distance. The grocery store, high school, and bank weren’t far either; just a quick five-minute car drive.  It was the perfect little enclave, a close community with easy access to everything important. It even included a tiny park.

               My family no longer lives on the outskirts of Arvada, even though we have remained in the same house for over two decades. What has moved is the city, expanding outward in an alarming display of backwards thinking and archaic logic.

The pastoral landscapes I loved are gone, replaced by wide roads that twist and meander through new neighborhoods like rivers of black asphalt. The homes all exhibit similar characteristics—features that developers believe are essential to fulfilling the “American Dream.”  They are expansive displays of opulence: multi-car garages, wide driveways, and two-story heights. Multiple bedrooms, bathrooms, and activity rooms are abundant in the floor plans. All homes are single-family in design.

With every planning commission approval of such projects, part of me whimpers, disappointed that opportunity after opportunity is missed to create something new.

Change is needed in this suburban community, which is why I was elated when I heard of Candelas back in 2011. In an undeveloped tract of land on the western edge of Arvada was the location for a master-planned community. Their website touted Candelas as  something different: a community that prided itself on sustainability, walkability, and mixed-use zoning. It was to have several town centers, complete with pedestrian promenades and apartments above shops. Instead of just offering single-family homes, Candelas would offer an array of different housing options and styles, including condominiums, townhomes, and apartments. Open space would be abundant, and trails would connect the town centers to parks and the Rocky Mountains. Offices would be incorporated too, so commutes to and from work would be a quick bike ride or walk.

Candelas was to be the largest building expansion in Arvada’s history. I hoped other Colorado mixed-use projects, like Broomfield’s Arista and Lakewood’s Belmar neighborhoods, would be envious.

In the past, as evident by the continuous approval of new single-family neighborhoods, Arvada and its City Council had been stuck in the mentality that the only way to get people into the city, and to establish a decent tax base, was to build houses. They saw no need to attract businesses or industry through improved connectivity between commercial and residential areas. This emphasis on single-family residential had been a disservice to the community. It promoted unhealthy lifestyle choices, and priced younger buyers and less fortunate ones out of the market.  With the development of Candelas, I thought there would be a transformation. I wanted to believe in Candelas’ slogan: “Life Wide Open.” I yearned for stronger community connections, better health, and more concern for the environment.

So far, Candelas has not met my expectations.

Further delving into the design of the project, it’s evident that it was intended for the automobile and the old way of living. While marketed as mixed-use, a majority of the land is platted for single-family homes; fifteen hundred, to be exact. Floor plans range in size from 2,000 square feet, all the way up to 5,000 square feet.

The developers have even made modifications to the project to convert designated higher density housing into lower density single-family units. They claim nobody wants apartments and condos. Yet, they can’t back up their facts with evidence, unable to cite anything but “the market” driving single-family sales. In just the past few months, several zones with signs designating opportunity for mixed-use, office, and multi-family residential have come down, too, replaced by ones offering land as “pad sites.” Still, the developer reassures the public that there is still plenty of opportunity for a blend of housing options in Candelas, despite their continuous requests for modifications to the master plan.

I’m skeptical.  

The project also relies heavily on a conceptual plan to build a tolled highway that connects the communities surrounding Denver. Proponents of the six-lane Jeffersonian Parkway claim that the highway will reduce sprawl by concentrating building projects alongside it. If the highway isn’t built, the developer has threatened to remove the town center elements of the project and replace them with strip malls. If there’s no visibility from the highway, they say it will be too costly to build such amenities. So far, there have been no discussions on alternative transportation options, like improving the bussing system in the area, or expanding nearby county roads to include bicycle lanes to broaden Candelas’ connectivity with the rest of Arvada and the Denver Metro Area.

I encourage development. Populations grow and evolve; the only constant in the environment is change. What I don’t accept is the idea that the “American Dream” is to have a house with a white picket fence in a quiet neighborhood for your wife and two children, and a large car to drive you to and from work and everywhere in between. That’s no longer relevant. The vision has evolved into something better. It no longer focuses on the quality of one’s possessions; it focuses on experiences. The way we live and the places we live in need to transform with that new dream.  

I have watched in dismay as sprawl consumed the landscapes I cherished growing up. People are starting to listen now. City Council has approved the development of two large apartment complexes, and has passed an ordinance streamlining the litigation process for multifamily construction defect laws. All of this has been done in anticipation of the Gold Line light rail stations coming in 2016. Yet, there is still much to do, and I will continue to advocate for smarter development, and smarter ways of living.  

With my eyes open to the real Candelas, I see that their motto doesn’t align with my vision of smart growth as much as I’d hoped, but that doesn’t mean I will be silent and resign to the status quo. There’s always opportunity to bring forth positive change in the community, and it starts with the citizens. I hope you, dear reader, will join me.