Rural Colorado Economic Status - Mid 2009 (Denver, Fort Collins: appointed, sales, real estate)

[jazzlover]

On another thread I promised an update about things in rural Colorado. Specifically, I have just spent nearly two weeks on one of my business-related periodic trips through the southern part of Colorado--nearly all of it in the rural areas. I also had a chance to meet with a lot of folks who have their finger on the pulse of things like the local economic situation, as well as water issues. I can't say that I was surprised much by what I saw and heard--things are pretty much a mess economically, and damned likely to get a whole lot worse. Bad enough to cause real hardship in rural Colorado--and very likely to severely adversely affect Colorado's metro areas not far down the line.

First, though, the good part. Southern and western Colorado has had one of the wettest (and coolest in many spots) June's on record. The mountains, especially, are as green as I have seen them in June in recent memory. Absolutely gorgeous. Wildflower lovers will be disappointed so far--it has simply been too cool for most high country wildflowers to bloom. When the do, it should be a riot of color, but they are not out yet. The cold and wet weather has raised hell with some of the hay crop so far. It is has been too cool to get good growth and the rains have seemed to come right when ranchers are trying to cut and bale hay--not a good thing for that. One other pleasantry, but one that shows the comatose economy, is highway traffic. It is way down for summer tourist season--some lesser known highways I traveled were practically deserted. Even weekend traffic was not heavy. Made for a very pleasant drive--mostly devoid of the usual tourist idiot drivers. (Yay!) One other thing of note: Unlike many years, the summer road construction season is pretty sparse--mostly what is happening is "patch up, fix up" kind of helter-skelter maintenance. The impact of shrinking highway maintenance budgets is very plain. Expect Colorado highways to be in much worse shape within a year or so--a lot of maintenance is getting deferred--probably for a long time.

Now, the "real deal" about the rural economy:

Summer tourism is way down. Actual tourist numbers have dropped modestly, but tourist spending is WAY down. Some tourist business operators who are friends of mine told me their business is down from 30% to 70% compared with last year. Since many Colorado tourist businesses rely on summer business to tide them over the winter months, it appears likely that many businesses will lack a sufficient cash cushion from this summer to survive the coming winter. My friends expect a major washout of tourist businesses to occur over the winter of 2009-2010. The frustration of these businesspeople is very apparent. One told me, "We've got a fair number of tourists in town, but nobody is buying anything. Having them mill around here costs money for the town to provide services for them. If they are not going to support the businesses and buy stuff, we wish they just wouldn't bother to show up at all." That statement would have been called sacrilege just a year or two ago.

The energy patch is also now in real trouble. Low natural gas prices have sent that industry into a tailspin in southern Colorado, with many layoffs. Things are also rough at the coal mines in western Colorado. Production is down due to weak demand in the Midwest and East. Several mines have had substantial layoffs. This is economic disaster in the area, since the mine jobs are about the best-paying jobs in an area that has some of the lowest family incomes in Colorado. Alternative energy is gong nowhere fast. Some people I talked to in that industry candidly admit that they can not compete without massive tax credits and subsidies--so much for the idea of "cheap" alternative energy. They also admit that--even under the most optimistic of scenarios--alt.energy will only be able to supply about 10%-20% of Colorado's energy needs. Even that level would require a capital investment and government subsidy that is unlikely to be practical. One of the people directly involved in solar energy development candidly admitted to me that solar energy (and wind) can only provide a marginal part of Colorado's future energy needs, and that a "massive energy conservation program" requiring (as I have repeatedly said) a simultaneous massive change in how and where we live in this state will be necessary to avoid an "energy shortage" catastrophe here within just a few years.

Some other people I met with were equally depressed about the water situation in Colorado--these folks were not some granola-crunching environmentalists or anti-growth mongers; they are people that are actually trying to manage the state's water resources. Put simply, every major river basin in the state is in serious trouble when it comes to managing it water resources--there simply is not enough water to go around--even in normal or above normal precipitation years.

In the Rio Grande River basin--which underlies the massive San Luis Valley, which contains one of the most productive agricultural areas of Colorado--water compacts with New Mexico and Texas are going to cause water managers to dry up somewhere between 15-40% of the irrigated land in the San Luis Valley in the next ten years.--this in one of the economically poorest regions of Colorado. Even with that bleak scenario, there are still Front Range water interests who would like to divert water from the Valley to irrigate those Kentucky Bluegrass lawns in metro areas of the Front Range.

The South Platte River Basin is in even more trouble--the combination of downstream river compacts and increasing municipal diversions of water for residential use (again, primarily to irrigate those ****ing Bluegrass lawns) will dry up tens to hundreds of thousands of irrigated agricultural lands in the South Platte Basin in coming years. As an adjunct, the non-recharging Denver Basin Aquifer, which supplies a lot of the domestic water in growth-ridden Douglas County, continues to deplete. New grandiose schemes are being proposed all the time to divert water from other basins--the beleaguered Rio Grande, the Upper Gunnison, etc.--in a desperate attempt to recharge the aquifer before the water runs out. One water manager, who shall remain nameless, said to me, "How ****ing stupid was it for the State Engineer's office to issue permits to allow 200,000 people to tap into a non-renewable aquifer that will deplete in 25-40 years max? Damned stupid, but the developers brought political pressure you wouldn't believe to make it happen." He said he saw that first hand.

The Arkansas and Gunnison River Basins are also facing similar issues. The bottom line is this: Every additional household that is built in Colorado--at least with the sprawled water-wasting lifestyle we embrace today--essentially means that more irrigated farm and ranch land in this state must be retired from producing food. Period. The growth-lovers on this forum are loathe to admit it, but that is FACT. That dooms rural Colorado to economic decline, and--just as importantly--may actually jeopardize local food production at a time when we may have to rely upon that production to supply local food more than ever. That is insane public policy, but that is what we do in this arid state today.

Finally, development and construction. Happily, it's nearly dead in rural southern Colorado right now. Excepting a couple of road construction projects, and a few projects already "in the pipeline," construction is in a coma. A lot of construction workers--especially the transient "boomers"--are leaving. Good riddance. Among the rest, they are either subsisting on unemployment or what work there is, changing careers, or working temporarily or permanently outside of the area. That can be a personal tragedy for them, but expunging that speculative, environmentally damaging, and largely unproductive industry from rural Colorado may prove to be one the few very beneficial long-term effects of this economic debacle.

As a sidebar, real estate prices are not yet substantially declining in many areas of southern Colorado, but little is selling. That kind of very low sales volume usually precedes are severe market correction, and southern Colorado sorely needs one. As it stands, the out-of-state equity locusts are disappearing, the speculators are starting to get their ***es handed to them (yay again!), and there is an increasing tide of foreclosures.

So, there it is. As I have time, I may post some more specific stories from my travels that quite plainly illustrate the above observations, but--for now--that is what is happening out there. And, frankly, I don't think we've seen anything yet. There are going to be a lot of sacred cows gored, and a lot of economic bloodletting yet to come.

[SheridanL]

As I read your post Jazzlover,..I tend to agree with you!
I do know that the tourist area in Canon City,..has gone down tremendously. I have a friend that lives ( year round) at Buckskin Joes ( above the candy store). The new tourist season is in effect now and, she says it is waaay down! She has to hide going up her stairs to the apt. and...the gunfighters live on the property too during the season and they all have the run of the town without a care in the world!!Usually chasing tourists out and trying to keep late ones from coming in are,...no longer a problem!
With the water problem/question,...I hear that Colorado, after a very long time, are allowing rain collecting!!YAY!! I think?!
As far as economics,................................I fear we have only just begun!! It scares the pajazes out of me!! Taxes and fees to pay for this and that are horrible!
Green energy jobs and impacts will take until the year 2042 or longer!!

[DOUBLE H]

I was off the board for the last several days, visiting friends and family in Albuquerque, Durango, and Denver.

Jazzlover has the bases covered in western Colorado, for sure. There was a sizable layoff just recently at the mines at Somerset, just a ways from Paonia. The people who have stayed in the Grand Junction area after the Halliburton (and other energy companies) are into their third month of drawing unemployment. When you file you draw for 26 weeks, and if you don't have anything lined up, you can apply for an 8 week extension. With a Democratic regime in charge, fortunately people can draw on that. It's not a good scene here in Mesa County right now. There is a big heavy equipment auction coming up soon, companies selling off maintainers, front end loaders, back hoes, rollers, and other equipment. The people I know here in the Junction area say it's the slowest it's been since the 1982 oil bust. Where I kind of worry is the construction related "spinoff business", companies like Stewart and Stevenson, W.W.Grainger, Pete Honnen Equipment Co., companies like that. Companies like that can stick around for a while, but if things don't start cranking by early next year, well....

Down Durango way, things are off. When I stay overnight there, it's usually at the Budget Inn on the north end of 550. The owner told me he's down a third. There is still a sizable amount of tourism, but not where it usually is. Earlier this year, the Durango-Silverton train folks saw trouble ahead and decided to run a special. For $100, you can get a season pass and ride the train as much as you want this year. Darn good deal. When I saw the train near Needle Junction off the highway, it looked like it was half full. Construction wise, things are at a standstill. There is some highway construction on the south end of the 550/160 split, but not much of anything else.

Things are lean this year, and probably next year. We're gonna have to tough it out, pure and simple.

[Josseppie]

None of this is a real surprise as we are in a recession, now from what I can tell things will be better in 4th quarter and next year but even then the rural areas will struggle as most of the Generation x and y people want to live in cities. To be honest I cant blame them as there is nothing to do in rural areas while in cities there are plenty of things to do and we only live once. As far as energy, with all the developments planed in Colorado I don't foresee any kind of energy crisis in the future.

[livecontent]

Originally Posted by Josseppie

None of this is a real surprise as we are in a recession, now from what I can tell things will be better in 4th quarter and next year but even then the rural areas will struggle as most of the Generation x and y people want to live in cities. To be honest I cant blame them as there is nothing to do in rural areas while in cities there are plenty of things to do and we only live once.

Your post is very troubling to me. Living in a city is well and good, but not at the expense of sucking all the resources from rural areas for extravagant lifestyles. "We only live once" is your mantra, but those who "live once" exist on the resources of people who have lived, are living, and will live many lives to support that "once" living life of one wasteful individual.

That is why the "grass is blue" because it knows that it contributes to this sad story.

Livecontent

[Josseppie]

Originally Posted by livecontent

Your post is very troubling to me. Living in a city is well and good, but not at the expense of sucking all the resources from rural areas for extravagant lifestyles. "We only live once" is your mantra, but those who "live once" exist on the resources of people who have lived, are living, and will live many lives to support that "once" living life of one wasteful individual.

That is why the "grass is blue" because it knows that it contributes to this sad story.

Livecontent

My quote "we only live once" was meant to explain that we only live once and there are more things to do in cities then in rural areas. Some examples are more and better restaurants, plays, movies, the theator, sports etc. Thus, I can see why someone would choose to live in a city along the front range versus a small rural town in eastern Colorado. It was not meant to talk about how people choose to live their lives in cities or rural areas for that matter.

[jazzlover]

Originally Posted by Josseppie

None of this is a real surprise as we are in a recession, now from what I can tell things will be better in 4th quarter and next year but even then the rural areas will struggle as most of the Generation x and y people want to live in cities. To be honest I cant blame them as there is nothing to do in rural areas while in cities there are plenty of things to do and we only live once.

I have lived in both small towns and urban areas in Colorado, and I'll take living (and the people) in the small towns every time. The small town folks--for the most part--know how to enjoy and appreciate those simpler but more satisfying pleasures of life far better than their metropolitan brethren. They also understand the importance of community and neighborliness better, as well. Maybe most importantly, they tend to be better connected to the land and the natural world, and understand that we humans are just a part of that natural environment. Generation x and y people tend to want to live in urban areas because many of them don't know any better. They have been totally disconnected from the natural world, agriculture, small-town culture, etc. They think milk comes out of a carton, water out of the tap, and electricity out of the outlet on the wall--with no concept of or connection to how those things get to them. They often can be best be called ignorant about what it really takes for them to live--and what impacts their demands have upon the world around them. What little they know of rural Colorado it what they see driving through it on some 75 mph Interstate Highway, or by staying in some "cartoon" resort in the mountains--in an air-conditioned artificial environment divorced from the very outdoors that those "tourists" are supposedly there to embrace. They are often so disconnected from the natural environment that--even when they are thrust into it--they really don't have the capacity to understand it. Their understanding of the history of this great state is often equally as ignorant--often little more than scraps of what has happened in their own lifetimes. Long-time small-town Coloradans have a much deeper sense of history because many of their own ancestors lived it.

To be sure, many rural Coloradans go to live in metro areas--often by economic necessity. Some do go because they long for the "city lights." But many, if they have a choice, will choose to stay in small town Colorado. Many, many of those who wind up in the metro areas wish that they did not have to be there.

The statement that "there is nothing to do in rural areas while in cities there are plenty of things to do and we only live once" is a ridiculously shallow statement. There are plenty of wonderful things to do in rural areas, and most rural folks can make it to the cities to absorb some "big city culture" once in a while. In fact, because it is a treat, many rural Coloradans avail themselves of the cultural aspects of the cities more often than the metro residents do.

[sterlinggirl]

Originally Posted by jazzlover

The statement that "there is nothing to do in rural areas while in cities there are plenty of things to do and we only live once" is a ridiculously shallow statement. There are plenty of wonderful things to do in rural areas, and most rural folks can make it to the cities to absorb some "big city culture" once in a while. In fact, because it is a treat, many rural Coloradans avail themselves of the cultural aspects of the cities more often than the metro residents do.

I thoroughly enjoy the cultural treats of cities, but I'm always happy to leave them after a few days. Libraries, zoos, museums, water parks, etc. are a treat, but if I have a choice between spending a few days riding a horse through unspoiled wilderness or going to a concert, I'll take the horse any day. There's a lot to be said about escaping the things of man.

[Josseppie]

Originally Posted by sterlinggirl

I thoroughly enjoy the cultural treats of cities, but I'm always happy to leave them after a few days. Libraries, zoos, museums, water parks, etc. are a treat, but if I have a choice between spending a few days riding a horse through unspoiled wilderness or going to a concert, I'll take the horse any day. There's a lot to be said about escaping the things of man.

I think that is how most, not all, people think from Generation X and Y. I know I love living in a city yet I am looking to buy a cabin in Salida so I can do exactly what you say, get a way for a few weekends a month and enjoy the mountains. I love to go hiking, skiing in the winter, horse back riding etc. That being said I would never leave the city permanently as I enjoy the city life to much with the restaurants, arts etc. That is why I love the front range urban corridor as I think we have the best of both worlds in a short drive from any major city from Pueblo to Fort Collins.

I do think because of the fact most people would rather live in cities, for various reasons, you will see the economies of the rural areas continue to struggle. Especially the areas where people don't like to visit as much or have second homes.

[CosmicWizard]

Josseppie wrote:

there is nothing to do in rural areas while in cities there are plenty of things to do

During my 60 year ride on this planet revolving around the sun, my experience has been mostly the exact opposite of that. Even though I lived in a metropolitan area of 1.7 million people for 16 years, I rarely indulged in the city things, preferring instead to spend my time at the beach or in the nearby state park. Living now in western Colorado, my lifestyle is similar with many more opportunities to spend time in awe inspiring natural settings. IMO, the most magnificent cathedral in all of Europe doesn't hold a torch to the splendor of a place like the Colorado National Monument.