May 12, 2014 8:54 PM by Andy Koen
PUEBLO - The pewag group is one of the recent success stories for the Pueblo Economic Development Corporation (PEDCO.) The Austrian-based chain manufacturer put 16 new employees to work when production began last month at their new 27,000 square foot factory on the south side of Pueblo.
The company was encouraged to locate in the community by an incentive package put together by PEDCO, which is a non-profit corporate partially supported by a voter-approved 1/2 cent sales tax.
"Companies are looking for the lowest cost of doing business package," explained PEDCO President Jack Rink. "That involves incentives, but it also involves, what's the property cost, what's the land cost, what's the tax rate, what is the cost of doing business in Pueblo?"
Puebloans have faithfully renewed the PEDCO sales tax since it's creation in 1984. The City of Pueblo is responsible for collecting the tax money and spending the funds on PEDCO related projects. Often the money goes to infrastructure needs tied to a project like the creation of the airport industrial park.
Along with pewag, PEDCO can claim the Vestas plant, the Target Distribution Warehouse and Goodrich for helping create some 16,000 primary jobs in the community in its 30 year run.
"We've been very cautious about how do we apply that money," Rink said. "It would have been easy to throw money at some deals and some companies that probably weren't in the best interest long term of our community."
The sales tax generates roughly $7 million per year for PEDCO and is set to expire in 2016. The City currently has $40 million in savings for PEDCO and some on city council are asking whether it makes more sense to spend the money now on needed infrastructure projects.
A plan supported by council president Sandy Daff and councilman Chris Kaufman would ask voters to renew the sales tax and allow the City of Pueblo to spend half of the current reserve balance on infrastructure. The city would then split any future revenue with PEDCO.
"If you approve that half cent extension, we will generate in the $80 to 90 million dollar range in the next few years," Kaufman explained. "Half of that is going to continue to be used for primary job creation."
The city's total list of infrastructure needs is estimated to be as much as $200 million dollars. That estimate includes public safety needs for structurally deficient bridges such as Union Avenue as well as aging police and fire department fleets.
"We are not recruiting enough business to generate enough tax in order to pay for the roads," Kaufman said. "I think we can afford one mile of road a year in maintenance; it just does not equate."
But Rink says even the $40 million in savings is barely enough to stay competitive with other communities trying lure away companies.
"That $40 million really just keeps us in the game. It's not a lot of money by the standards of big economic development."
Kaufman, Daff and other council members will hold the first in a series of town hall meetings discussing their proposal for the PEDCO money on Tuesday May 20, at 5:30 p.m. at East High School located at 9 Mac Neil Rd in Pueblo.