Fort Collins staff outline measured incentive framework to retain employers, revitalize retail

At a Fort Collins City Council work session, city economic development staff presented a proposed evolution of the city's business assistance package aimed at retaining primary employers, reducing sales-tax leakage, and supporting neighborhood retail centers.

Sana Kendall, Fort Collins' economic health director, said the goal is a strategic, performance-based approach rather than broad giveaways. "It's not about hitting a panic button," she told council, adding that the city would tie any assistance to measurable public benefits and verify performance before payments are made.

The presentation highlighted past packages for primary employers and compliance lessons. Kendall cited an earlier Avago (now Broadcom) arrangement in which the company promised substantial capital investment and jobs; staff said Broadcom delivered more jobs and has invested heavily in Fort Collins since 2011. By contrast, staff noted that Woodward did not meet later employment targets and therefore did not receive a full rebate.

Michael Bussmann, who led the retail study portion of the briefing, said Fort Collins has captured a declining share of regional retail growth and outlined three retail typologies—regional nodes, neighborhood centers and neighborhood strips—each of which would receive different policy support. He described two primary incentive tools under consideration: an enhanced sales-tax incentive (SDIP) targeted at large, regionally significant projects tied to specific community-benefit improvements, and a lighter sales-tax share-back aimed at neighborhood-center reinvestment. Both types, he said, would be performance-based, time- and cap-limited, and require city council approval.

Council members pressed staff on likely trade-offs: whether incentives reduce current general-fund revenue, how staff would avoid subsidizing projects that simply shift sales from one Fort Collins business to another, and how small businesses would be supported. Staff said the incentives under discussion would apply only to incremental revenue created by a project (not existing revenue), that the city would perform third-party economic-impact analyses for any assistance package, and that they were exploring an economic development fund to provide smaller support (facade grants, technical assistance) for neighborhood businesses.

Kendall said the city has not issued a formal assistance package since 2015, though the economic health office has supported businesses through other channels. She said primary-employer incentives are already structured to be performance-based and rebated after the city verifies tax payments and employment compliance.

On process, Kendall said primary-employer recruitment typically takes a long runway—often a year to two years of competing with other states and jurisdictions—and that the city currently routes retail inquiries through the Urban Renewal Authority or the city manager's office. Staff said they will return to council at the end of Q1 with proposed qualification measures, guardrails and a recommended three-tier framework for incentives that would include tools targeted to large regional projects, neighborhood reinvestment and a small-business fund if council wants one.

The work session included questions about the state's enterprise zone and a Fort Collins "chip zone" for semiconductors; staff said the state had awarded a $2.5 million tax credit to a project in the chip zone and that additional companies are exploring expansion options.

The council did not take formal action; staff will come back with a recommendation and proposed resolution language for council consideration.