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DIA Agreement Opens Door for New Opportunities in Northeast Corridor

On Wednesday, June 3, Adams County, Commerce City, Aurora, and Denver concluded two years of negotiations, resulting in a new development agreement for land on and off Denver International Airport. The agreement lays out how revenues will be shared and how the Airport environs will be marketed.

During his first campaign, Denver Mayor Michael B. Hancock announced his intentions to develop an Aerotropolis and an Airport City at Denver International Airport and on the land surrounding it. The plan included airport land uses  that were in apparent disagreement with the 1988 Intergovernmental Agreement (IGA) negotiated by former Denver Mayor Federico Peña with Adams County Commissioners.

The 1988 IGA stipulated that DIA could accommodate business locations consistent with the types of companies that locate on “a passenger airport.” This seemed to include services such as food kitchens, rental car facilities, airline freight, restaurants on the concourses, etc. Hancock’s Airport City was far more threatening to his neighbors. It included high-paying jobs in employment clusters such as aerospace, aviation, bioscience, commercial agriculture, and others. Adams County and the cities within the county were vocal about what they perceived to be a violation of the IGA.

An uproar ensued. Threats of lawsuits seemed to be a weekly story in The Denver Post and the Denver Business Journal. And, almost every week for the next two years Adams County, Aurora, and Commerce City met to find a new development agreement. To Adams County and its voters, the 1988 IGA was the Holy Grail, assuring that development around DIA would come first to Adams County and its cities. As the region’s poorest county, the promise of good jobs with no competition from “BIG” Denver seemed like an insurance policy for new jobs.

Denver had other challenges. Its airport needed revenue from other sources than its air carriers, in order to remain competitive on prices charged to DIA’s tenants. Non-airline revenue and fuel sales are two major sources of revenue for the airport. New types of companies locating on-airport, with long-term land and facility leases mattered deeply to Hancock and his Airport CEO, Kim Day. The release of Hancock’s aggressive development plan stirred up long-held enmity from its neighbors to the north and east.

One June 3, after tough negotiations, the air seemed lighter; the humor coming easier, and a sense from all parties that they had accomplished something big could be felt all around the region. 

The deal is the following:

  1.  A 15 year “pilot project” on and around DIA. To be reexamined in 2030.
  2. DIA is permitted 1,500 acres of development on-airport. Any type of industry can locate within those fifteen hundred acres, except for bioscience companies. This provision was to stave off competition for Aurora’s Anschutz Medical Campus and the Fitzsimons Life Science District.
  3. Half the property taxes generated by any company locating on DIA’s 1,500 acres goes to the other communities. Denver keeps half the taxes and maintains all lease payments from its tenants.
  4. Land that Denver owns outside of DIA’s boundaries—and that are now open for development—will pay all its property and sales and use taxes to Adams County and the affected cities.
  5. Denver pays an up-front payment of $10 million to Adams County that will be distributed to cities within its boundaries.
  6. A marketing and development group will be formed to market not just DIA, but the area development surrounding the airport.
  7. Finally, in the spirit of the original IGA, each county will hold a plebiscite to seek approval of the agreement. If the vote fails in one or both jurisdictions, the counties are permitted to hold another election.

For those of us who are proud of our region and the success we have enjoyed through collaborative action and metropolitan cooperation, the new agreement is welcome. Had the four communities failed in their joint commitment of maintaining public silence, had not engaged in serious and deliberate negotiations, AND abstained from the easy road to the courts, this story could’ve had a very unhappy ending. Instead, the region remains intact. The communities each received a fair share of the future bounty sprouting on and around DIA. The impediments that once held the airport environs in economic limbo will now begin to see brighter days.

Commerce City has already started the party. Its voters approved a five-lane highway on what is now the two-lane Tower Road. Opening up the west side of DIA with an urban-sized road will bring a new crew of investors anxious to tap the region’s fastest growing quadrant.

Congratulations to Adams County, Aurora, Brighton, Commerce City, Denver, Federal Heights, Northglenn, and Thornton on your new relationship and a brighter future coming your way.

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About Phil Kalin

Phil Kalin joined Pinnacol Assurance as CEO in 2013. He has served as the chief executive of both public and privately-backed companies, including large hospital systems, as well as organizations focused on health care data, technology and education. He has been active nationally on health care topics related to insurance, data analytics, technology innovation, cost improvement and risk mitigation. Phil is providing an informed opinion on what we see in the Monthly Economic Indicators.

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About Pinnacol

Pinnacol Assurance is the Metro Denver EDC's Research Sponsor. Pinnacol is Colorado’s leading provider of workers’ compensation insurance. Pinnacol provides comprehensive, competitively priced coverage; immediate attention to claims; a highly qualified network of medical providers; and proactive safety programs to more than 55,000 Colorado businesses. Annually, Pinnacol supports nearly $500 million of Colorado’s economic activity, spends over 35,000 hours keeping Colorado worksites safe and provides compassionate care to over 40,000 Coloradans injured on the job.

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