Colorado Officials Hail 'Fortune 140' Company Relocating
New York-based Arrow Electronics is relocating its corporate headquarters to Colorado for a number of reasons; one of them a tax incentive package offered by the state. KUNC's Kirk Siegler looks at whether these types of investments pay off.
The number of Fortune 500 companies headquartered in Colorado will grow from nine to ten starting next month. Global electronics supplier Arrow Electronics announced Tuesday it’s moving its corporate offices from Melville, New York to Arapahoe County, Colo, where the company already employs some 1,000 workers.
After months of dismal and downright stagnant unemployment numbers, Governor John Hickenlooper, a Democrat in his first year, beamed broadly as he introduced Arrow Electronics CEO Mike Long inside his wood paneled office at the state capitol.
"I just can’t express how proud and excited we are that Arrow is moving their global headquarters here," Hickenlooper said.
After a firm hand shake, Long said a combination of things went into his decision to relocate to Colorado.
"We believe with the government cooperation, with the universities, that Colorado will be the best state to help propel Arrow into growth in the future," Long said.
Arrow Electronics has become one of the world’s biggest suppliers of computer and specialized electronic equipment, now doing business in more than fifty countries. And Long says much of the company’s workforce is white-collar; highly skilled labor, which he noted more than once that Colorado has an abundance of.
"We are a growth company, we’re looking to grow in the future, we have a history of growth, and we believe the best place for us is Colorado to keep that growth going forward globally," Long said.
But Long didn’t pin any specific job numbers to growth projections like those yesterday. Nor did he say how many of the 1200 or so employees from the New York office would simply just pick up and relocate here.
Economists aren't surprised that executives in his position are keeping mum for now.
"I think anytime you move a headquarters there’s going to be some new jobs created," said Martin Shields, director of the Regional Economics Institute at Colorado State University.
But Shields quickly added that overall job predictions are hard to make because the economy is still shaky.
"The national recovery is pretty stalled, there’s a lot of turmoil in Europe," Shields said. "I just don’t know where all these jobs are going to come from."
Still, Shields said Arrow’s announcement is significant because it sends a signal to other companies that Colorado is an environment where innovative, global firms are welcome.
State officials helped sweeten Arrow's relocation by cobbling together $11 million worth of tax credits over the next five years if the company creates some 1200 jobs.
This even as Colorado is about to face another tough budget year.
But Tom Binnings of Summit Economics Group in Colorado Springs figures that’s an investment that will pay off.
Why? Because he said it’s modest compared to what most other states are offering.
"I was actually surprised it was that low of a number, if you’re talking a thousand plus new jobs," Binnings said.
And Binnings said Colorado will be able to recoup its investment easily because Arrow’s new employees will bring in more sales and income taxes.
Economists also note that eleven million is peanuts for a company like Arrow that did $18 billion in sales last year.
Indeed, CEO Mike Long said Tuesday that while incentives can be an important tool for states like Colorado, in this case, they’ll mean little to his company’s bottom line.
"Colorado didn’t come to us and say, ‘we have incentives,’ because the truth is, Colorado doesn’t have a lot of incentives compared to other places," Long said.
In his experience, Long said, location and whether a place has the tools a company needs to be competitive are the biggest factors for businesses looking to expand or relocate.
His company is expected to finish that process formally, November 15th.