This year’s annual Economic Development Summit hosted by the Steamboat Springs Chamber on October 19th was themed “Backcountry to Boardroom: the business of the outdoors.”
Few Colorado communities outside a metro area have grown outdoor sector manufacturing better than Steamboat Springs which boasts local startups Smartwool, Big Agnes, HALA Gear, and Moots Cycles. With an isolated location and a population of over 12,000, few are as independent and close-knit as Steamboat. While not exactly shrinking in population, according to data from Elizabeth Garner, the State Demographer, it is also true that few communities have a talent pool aging as rapidly and not being replaced by young people or their children as Steamboat Springs.
So, while every respectable town in what OEDIT has newly coined the “Rockies Playground” region wants to grow or attract outdoor recreation businesses, in Steamboat itself, the question lingers, how can a community retain those businesses, grow/attract the needed talent to support them, and overcome some of the structural challenges of a remotely located business?
One unspoken observation of the day—especially from listening to Sarah Shrader, owner of Bonsai Design in Grand Junction who was the last speaker–was that outdoor recreation business people have passion for what surrounds where they live – meaning the public lands, and usually strive to connect their employees to the nearby outdoors, but they don’t often get to connect the dots with how that passion has the power to alter their community and the built environment that makes places great. Shrader told a story that depicted how she has made that leap as a business owner and citizen.
Kicking off the day, Luis Benitez, Colorado’s first State director for the Outdoor Recreation Industry Office addressed the elephant in the room, the August announcement of Smartwool relocating from Steamboat to Denver in a consolidation move by parent company VF Corp solicited by the State of Colorado. His presentation roamed from the outright boosterism one might expect to a message echoed by other speakers—a softly delivered tough-love.
First the boosterism: Benitez boasted that the outdoor recreation industry is larger than the U.S. auto industry “fiscally,” citing Colorado specific data from 2017 which is scheduled to be updated this next week, pointing to
- 229,000 direct jobs
- $28 million in consumer spending
- $9.7 million in wages
- $2 billion in state and local revenue.
Nationally the industry accounts for $887 billion in consumer spending and over 7.6 million jobs, approximately 2.2% of the national economy. So, you would think an industry that large would know how to throw its weight around to affect policy. Not really notes Benitez referring to only 3 industry lobbyists in D.C. Contrast that to the coal industry which OpenSecrets.gov says has approximately 64 registered lobbyists and extremely well-organized influence on policymakers.
You would also think the outdoor recreation industry would know how to leverage its values to educate consumers to keep up the playground they share. Other than some of the big players like Patagonia which lobbied to move the Outdoor Industry Association trade show from Utah to Colorado, the outdoor recreation industry is only just beginning to feel its oats in this area as well. According to Benitez, Colorado is trying to change that through a formal relationship with “leave no trace” and development of the not-yet-publicly released quirky carton video “Care for Colorado; It’s the only one we got” which he previewed for the group. He mostly steered clear of references to climate change. The message was that locally, communities need to actively share outdoor ethics with consumers if they want the rapidly growing industry to be economically sustainable.
Benitez spoke of “baggage” about how we recreate which needs to be shed in order to see change clearly. For instance, the resistance of “pay to play” on federal lands which millennials, hunters and motorized users embrace, needs to become the way to fund the management and repair of public lands for future users. Evidently, in the old model my own baggage is that federal land agencies used to fund maintenance and we enlisted ambitious efforts like a Civilian Conservation Corps to build beautiful outdoor infrastructure for increased use and enhance the public domain. Reality is that nationally we continue to defund agencies that actively manage premier public assets such as land, water and air, in a race to manage these assets to the bottom in an ideological effort to shrink the federal government. OK, no one at the summit said that, but that is what I was thinking.
From a local policy as well as a business development standpoint, we also need to shed old perceptions about new technologies like e-bikes, doing yoga on a SUP or camping in a trailer “the size of a coffin.” Benitez joked that he never thought he would “lust after” something like a teardrop trailer as he does today. How we learned to enjoy the outdoors, the tools, like an aluminum canoe, are no longer relevant and keep us from adapting for the opportunities that will drive the industry in the future.
Speaking of baggage to be set aside, Brian Lewandowski, of the CU Leeds School of Business who also spoke at the event said we need to get used to nearly a decade of “free money” in the form of low-interest rates. That is gone; as is unemployment making this officially “an employee market.” Lewandowski also gently pointed to how immigration policy will affect mountain towns since historically 20% of construction workers are “foreign born” as are approximately 13% of service workers. These figures seemed far undercounted. He followed Elizabeth Garner, the State Demographer who presented a wealth of data as usual, and underscored that although Colorado is growing, the rate at which it is growing is slowing. The impacts (and the advantages of growth) are not equally dispersed. For instance, most of the population (and job growth) in the state will be occurring a few mountain passes to the East of Steamboat.
Having heard Benitez’ pitch a few times, Jessica Valand, Director of Workforce Development in Northwest Colorado finally had the chance to pose some counterpoints (although he had left); specifically that outdoor recreation thrives off of tourism, and that for our mountain service sectors most workers at $12 – $14/hr are “paid about half a living wage and are living in poverty.” She continued, “by and large the kind of jobs that tourism creates do not pay the bills,” and said the issues to which we “whack-a-mole with policy—housing, child care, health care– all come down to a discourse around what workers cannot afford.”
There was push-back to that from the audience about how service workers “make bank” from tips, though it was also pointed out that no community is helping visitors navigate how much to tip a housekeeper, or a raft guide or a shuttle driver. Valand pointed out that while we all know we are paying extra to be in the mountains that relying on tips and “paying with powder days” are no substitute for wages. Her pitch: that the outdoor recreation industry has an opportunity to do what just about every other industry has failed to do lately – champion workers earning livable wages for the places where they live.
While Valand was pointed and on-point, other than the big players owning ski resorts, outdoor recreation is an industry in flux. Not known for CEOs owning yachts and Gulfstream jets (Rob Katz of Vail Resorts’ income aside) Benitez also focused on the tension between the creative lifestyle that spawns innovation and the sheer big-business of the outdoors. It is tough to translate for prospective company owners living out of their vans to investors on Wall Street, that “most of the ecosystem is small companies which are relationship-based” as opposed to having a purely bottom-line focus. Clearly, ski area management has made the shift to bottom line away from a focus on communities and relationships. The remaining quirkiness in the industry is good for Western Slope towns with a high quality of life, surrounded by wilderness product truthing grounds. Benitez noted that “most of the people in this industry know where they are and where they are going,” meaning, they don’t locate in Steamboat Springs or Colorado by accident. That doesn’t mean they have a clear pipeline to develop their business and capitalize and grow their ideas.
Benitez asked, “where does innovation come from?” He continued echoing Governor Hickenlooper’s praise of the citizens, that to find innovation, “you really need a baseball scout. A guy on the ground looking for the guy in the garage inventing things. They start out like this. How many of you know someone with great pride who knows how to fix things with bailing wire?” None of the afternoon speakers at the conference were still in the bailing wire stage, they were clearly engrossed in how to manage a successful business.
Then the afternoon Industry Panel underscored the question looming in the background–what would make a business stay once it became successful?
Scott Eckberg who is running Harvest Skis out of a garage in Steamboat with his partner, and Chris Tammucci, Director of Operations for Big Agnes each spoke of supply chains, logistics, and the travel times to Denver being a challenge. Eckberg already made it big in another sector elsewhere and clearly enjoyed the challenge of managing a dynamic start-up. Tammucci noted that in some ways it is not a big deal for Big Agnes to have corporate in Steamboat while doing logistics out of Salt Lake City. As a long-time citizen and community leader he certainly didn’t make it sound like his company was going anywhere either. Both spoke of the challenge of hiring for specific skills. By the end, one could almost feel jealous for Bonsai in Grand Junction which had a host of welders and other talent from the out-of-boom-cycle Oil and Gas industry to tap into. Listening to the Steamboat panel, it was difficult to not feel that their businesses existed there not because of the opportunities but in-spite of the hurdles presented by place, as an extension of the sheer determination and innovative spirit.
One de-facto answer from the day is to allow those business leaders to invest and shape the community. Steamboat appears to have already internalized that, though it is always worth reinforcing. Sarah Shrader, the last speaker of the day whose company Bonsai Design based in Grand Junction is regularly recruited to relocate to other places wanting to grow an industry cluster. When asked what made them stay, the answer was that she finally felt empowered to change her community. She wasn’t exactly invited to the table in Grand Junction, and in a way arrived in Colorado by accident. Not all business people want to stick their necks out to plan and envision the future of their community as she has in the Grand Valley.
In Shrader’s words, she spent the first seven years growing Bonsai doing work across the globe “with her head down” before seeing that her own town wasn’t investing in its people and placemaking like other places Bonsai was working. After being thrown together in a branding exercise, she and like-minded outdoor recreation industry leaders in GJ committed to organizing to change the conversation to “infiltrate” local boards and eventually for Bonsai, to “put their chips in the middle of the table” and get in the redevelopment business. It was a different situation in GJ, with an entirely different political dynamic than Steamboat Springs. Shrader’s is a compelling business story as well as an unfolding community story.
It was clear from most speakers that people intentionally come to Colorado. Then perhaps, they find or invent a business that allows them to stay. It would be worthwhile for communities to better tell these origin stories and collect them. Steamboat has somehow developed into an industry cluster emanating from the independent and innovative outdoor culture there. Most other places wish they were there, but in Steamboat, there seems to be a real concern about the sustainability of that model. The Colorado spirit aside, it seems that paying employees with quality of life bonuses only goes so far in economic development. Even places that have “made it” need to be looking ahead.
Take the example of Smartwool. In addition to addressing the move by VF Corporation which has owned Timberland since 2011, which has owned Smartwool since 2005, the move came as a major win for the Colorado Economic Development Commission which issued $27 million in tax incentives this year to get VF to consolidate various operations from outside the state to Denver. No one in the mountains can compete with that. There is a risk to having successful businesses in this sector—they are highly prized.
The question was asked of Shrader after she noted that their firm has been courted by a number of communities actively building such a cluster including Ogden and Nashville, what made them not leave Grand Junction?
Given her battle with the community there, her answer was one that couldn’t be lost on Northwest Colorado; “rural America has really been left behind. It is sad what we have done for the past 30 or 40 years neglecting rural development, and they voted in 2016.” Talking to the group at the summit, she showed an extraordinary degree of reflection and compassion for her community saying, “mining and extraction has been the economy in Grand Junction for 50 years. I did not understand what hopelessness was like. Even during the boom, waiting for the other shoe to drop is a destructive force. The cycle has an impact on the economy, but also on the psychology of the industry, the people and the community. ” Now that is a person sold on place, not because it is cool, or lucrative, but because it is the right thing to do and her company has put all the chips in the middle of the table.”
It was a strange anecdote of politics and compassion spoken to a group apparently on the upward swing of an industry, but concerned and eager to hold on to success.
