Tim Vanderhoof has jobs on his mind. High-paying jobs, especially.
Vanderhoof joined the Colorado Springs Chamber & EDC in late February as vice president of economic development, heading the nonprofit’s efforts to attract new businesses to the Colorado Springs area and help local firms expand.
He spent most of the past decade with Enterprise Florida, a statewide public-private partnership that had focused on business development since 1996. After leaving Enterprise Florida in 2021, he worked about a year as a consultant for Walt Disney Co. and was director of business attraction for a nonprofit in Lake County, Fla.
Before joining Enterprise Florida, Vanderhoof spent seven years in the financial industry, working as a branch manager for several major banks and in business development for an accounting firm. He started out with Enterprise Florida recruiting financial services companies to Florida and was promoted several times, eventually becoming senior vice president and managing the agency’s staff and business attraction and retention programs.
While at Enterprise Florida, he was involved in 142 economic development projects that resulted in creating or retaining more than 34,000 jobs with more than $3.6 billion in capital investment.
He got off to a fast start in Colorado Springs with two economic development projects announced since his arrival that involve more than 600 high-paying jobs — by Spectrum Advanced Manufacturing Technologies and Omni Federal. (He replaced Theresa Metcalf, who headed the Chamber & EDC’s economic development efforts before leaving late last year.)
Vanderhoof was interviewed recently by The Gazette about what attracted him to Colorado Springs, how economic development efforts in Colorado are different from Florida, what challenges the Chamber & EDC faces in attracting and retaining companies to the area, and industries the group is targeting for relocation or expansion.
What attracted you to this job and Colorado Springs?
I love the time I spent in Florida, and I had done economic development there for 10 years, working my way up in the organization, but the climate and appetite for economic development had changed from both a public support and legislative perspective. We lost a lot of tools we had to compete (for economic development projects). The Southeast is one of the most competitive (economic development) markets in the nation.
You are competing with the Carolinas, Georgia and Texas, so the loss of those tools made it extremely challenging. The Florida Legislature disbanded Enterprise Florida, saying what we did was corporate welfare and picking winners and losers. They said we have natural features like beaches, the weather and no income tax, so why do we need incentives. That is short-sighted in the long run.
I wanted to get back to my roots of helping communities find not just jobs, but careers. Our mission is to diversify the economy with high-wage jobs and capital investment. When this job became available, I jumped at the chance to do what I love to do. I have the opportunity here to create an environment to do economic development the right way, which is a team approach. That includes not only the Chamber & EDC but also our city, county and state partners, education partners and brokers and developers.
What is the role of financial incentives in economic development?
Companies are making a financial decision to relocate or expand. If you have talent, real estate and infrastructure, how can you soften the blow (the cost) of capital investment? If you have a $30 million budget to do a project in Colorado Springs but it will cost $35 million in Albuquerque, then Albuquerque has to make up that $5 million (difference). Incentives don’t make a bad deal good, but they make a good deal better. Incentives is a dirty word in many people’s minds.
Are you afraid that the climate for economic development in Colorado Springs will change like it did in Florida?
This is a totally different market. In Florida, we had to lead with incentives because of the competitive market in the Southeast and companies saw how historically large incentive packages are. Colorado Springs is a different animal; I haven’t seen anything remotely close to that level of incentives here.
There isn’t the emphasis on incentives here and that is not the first thing companies ask for. One of the key drivers here is talent. The most critical factors in a site search are talent and real estate. What is most meaningful for companies is that 250 to 400 people a month here are separating from the military and they (companies) see motivated employees who will show up on time and have great acumen for their jobs.
We have 249 aerospace and defense contractors in the Colorado Springs area and that is why we have such a strong cluster of those companies here. You have five military bases plus U.S. Space Command in the Colorado Springs area.
What is the biggest initiative you are working on to improve the competitive position of Colorado Springs for economic development projects?
We are in the middle of a site readiness program, having just completed the first round. We reached out to (commercial real estate) brokers and developers to submit greenfield (undeveloped) sites or any facility of substantial size coming on the market. There were not as many submitted as we had hoped. We received 11 sites and seven were submitted for the next step.
We sent those sites to site selection firms and engineering and design-build companies to conduct a due-diligence desktop analysis, including any environmental studies, endangered species (issues) and mitigating factors, utility capacity and other considerations to give us a good base from a cost perspective on getting these sites shovel ready. They have one month to get (their analysis) back to us. We should have final packets on these sites in about three months.
While I was hoping for more than 11 sites, it gives us something to work with. We may eventually start a sites and buildings database on what is on the market. We don’t have that right now. We first need sites identified and what it will take to get them to where we want them to be.
Given that Colorado and Colorado Springs are in the midst of a labor shortage, do you believe available talent will be a long-term issue?
I don’t think labor will be a long-term problem. We have found that 18– to 26-year-olds are the most likely to move to Colorado Springs, so we want to connect them with business leaders and show them the beauty of this region as a place to live and work.
We also have a concierge program to help new arrivals find places to run (Vanderhoof is a runner), the best restaurants and coffee shops. I used it when I came here and it makes you comfortable in the community immediately.
Colorado Springs has had a historic series of economic development successes during the past two years (more than 4,000 jobs and $2 billion in capital investment); what does that mean for this community?
It means we are doing the right things, but we can’t get complacent. We need to be replenishing the pipeline (of prospects) and continue our lead-generation practices. These wins mean more people in Colorado Springs spending money in our community at local businesses, and hopefully some of them will start their own businesses.
Our lead generation involves attending industry-specific conferences, including the Space Symposium here in Colorado Springs. We will be attending a space technology conference next month in Long Beach, Calif., to generate leads. We will walk the exhibit floor to identify companies who may have a need to expand or relocate from higher-cost markets. We also need to reach out to the site-selection community as product (sites) become available.
For our market size, we still have growing to do, but it needs to be smart growth, not just growth. That means the right companies and the right type of investment. We want companies who will make a long-term investment. We don’t want a five-year flash in the pan that leaves a 500,000-square-foot facility empty after they leave. We need good corporate citizens who pay more than El Paso County’s average wage.
Is the rising cost of living — now higher than the national average – a concern for economic development?
The cost of living is a concern for most communities. We faced that in Florida. A lot of communities Colorado Springs competes with are facing the same problem. Affordable housing is a concern and should be a focal point. I don’t think Colorado Springs is anywhere close to the situation that Seattle or San Francisco are in. Wages will continue to rise and partly offset the higher cost of living.
What industries are the focus of the Chamber & EDC’s economic development efforts?
We focus on aerospace and defense, cybersecurity and software development, and semiconductors and advanced manufacturing. Most of the recent (economic development) wins are in aerospace and defense, semiconductors and advanced manufacturing. Those are our primary focus because we have clusters here in those industries. That doesn’t mean we would turn down a project in another sector, but those three sectors are the ones we are actively pursuing because they have wages well above the state average and make higher capital investments than other sectors. If a call center or retailer wants to come here, we would assist them, but we would not offer incentives. We have some secondary sectors that we also work on, including financial services and technology, medical-device manufacturing and bed springs and hardware manufacturing.
Editor’s note: Questions and answers have been edited for clarity and brevity.
