Issues and Opportunities Facing U.S. Local Governments: The Example of Denver, Colorado

3:30 P.M. EST

MR. DENIG: Good afternoon, ladies and gentlemen, and thank you very much for coming to the Washington Foreign Press Center. We are very pleased to be able to offer one in a series of briefings on major metropolitan areas of the United States, and we're pleased today that we can feature the hub of the West, Denver, Colorado, and that we have as briefers Mayor John Hickenlooper, and Tom Clark, who is the Executive Vice President of the Metro Denver Economic Development Corporation.

They'll discuss some of the issues that are connected with their metropolitan area, particularly issues such as transportation and job growth, which are the same issues facing all American cities, and some of the solutions they have come up with. And after that, we'll be very glad to take your questions.

Mr. Mayor.

MAYOR HICKENLOOPER: I guess the crux of what we're here to communicate is that in the most recent election, regional Denver -- as a frame of reference, the city and county of Denver is about 550,000 people. The metropolitan area is 2.5 million.
So it is an assemblage, it's a region of 31 municipalities scattered over seven counties, and it's a community that, unlike almost any other city in the country, all of those municipalities joined together to design and then make sure the voters supported a transit initiative whereby instead of rampant growth leading to more suburban sprawl leading to more traffic, the voters agreed to support a four-tenths of one percent, or four-tenths of one cent sales tax increase.

So for our regional transportation district it would go from six-tenths of a cent to one full penny, or one full percent, to build a $4.7 billion transit system, which is arguably the most ambitious in the history of the country, 120 miles of new transit, which will be built over the next 12 years, basically integrating all quadrants, all regions of the city, and allowing the workforce in the entire community sufficient mobility so that any employer in any part of the city can attract workers from any other part of the city.

What I thought was unique -- whereas many cities have an antagonistic relationship with their suburban neighbors in the region -- in this case, Denver, all 31 municipalities voted unanimously to support FasTracks, and all the, you know, all seven counties supported, all 15 Chambers of Commerce, scattered throughout the entire region, supported it.

So there was a consensus on a regional level that you seldom see. I mean, you're talking about an area larger than the state of Connecticut, where everyone agrees that this was what they were going to support.

Tom?

MR. CLARK: Okay, well, thank you. When you're a geographically remote area like metropolitan Denver is, sitting kind of in the middle of a very large --

MAYOR HICKENLOOPER: Not geographically remote. Geographically centralized.

MR. CLARK: Yes. Demographically remote. (Laughter.) Transportation is really kind of a defining issue for a community, and in the 1860s, for example, the U.S. transcontinental railroad was being built, connecting the two coasts, and Denver was viewed as a -- as the obvious location of the transcontinental railroad to run through. Unfortunately, the railroads had different ideas and wanted to go about 90 miles north of Denver through Cheyenne, Wyoming, because the mountains were easier to get across for the railroads. In those days, as today with airports, if the railroad did not go through your town, you became an economic non-entity. A number of prominent businesspeople in Denver rallied and raise $300,000 in a very short period of time to build an 80-mile spur to connect to the transcontinental railway --

MAYOR HICKENLOOPER: I thought you said it was 90 miles north. They were 10 miles short with the spur.

MR. CLARK: Well, no, they started 10 miles out of town, actually.

MAYOR HICKENLOOPER: Oh, okay. (Laughter.)

MR. CLARK: And actually, you know, if you read the report, it shows you how the West was different: The actual plowing of the first road bed was plowed by both men and women, which, in the 1880s or 1860s, was quite an achievement.

In the 1930s, a mayor by the name of Benjamin Stapleton saw that commercial air flight would be to Denver -- of the 20th century -- would be defined by air transportation, and built what became Stapleton International Airport, which became the nation's sixth busiest airport at its peak. And then in the late 1990s, or 1980s, the region commenced on building Denver International Airport, which is now the most efficient on-time airport in the United States and the second most popular airport in the world behind the Frankfurt Airport in Germany, in terms of customer satisfaction.

So we've always been able to use transportation as a way to connect us to more. But what happens in the West is that a lot of the transportation infrastructure, in terms of moving people within the region, has been overrun by rapid population growth, and one of the great decisions that this community made in the 1980s to build a new airport became kind of a stake in the ground to build this transit, to say, we need to make sure that not only do we have access to markets, but move within the marketplace of people and goods and services that is efficient.

And so we embarked on this ride, actually, to build the rail system. We believe that, long-term, that the challenges that all of America's great cities are facing, which is traffic congestion, can only be mitigated in the West by densifying population. You cannot continue to sprawl across the landscape and operate an efficient government system.

The Mayor of Denver led 30 other mayors in the region, along with the business community and the environmental community, in this campaign to build this entire system out in one, very different in the way in which most systems are built, where you build a corridor and then you build another corridor. This will be a simultaneous buildout.

And I think one of the things that you can say about Colorado and the metro Denver area is that people have a great sense of leaving something to future generations. We are a community of immigrants; only 40 percent of us are native born, 60 percent of us come from someplace else, and we come to Colorado as a location of choice. And when you choose to locate in a place, I think you become more passionate about it and people make decisions that are much longer term than you see in other parts of the country.

MAYOR HICKENLOOPER: In many ways, it was sort of the same 25 years ago. Denver was faced with an airport that was landlocked, and Tom alluded a little bit, but that was, again, a big, a huge commitment of resources, over $4 billion investment, and a lot of state people that attacked FasTracks attacked the airport then, but clearly, airports have been proven. I mean, in the 18th century, this country was connected by rivers, in the 19th century it was railroads, the 20th century it was roads, but I think in the 21st century it will be airports, to a larger extent.

And DIA [Denver International Airport] is, again, as Tom said, according to J.D. Powers, is the number one customer service airport in the country, the number two in the world, fifth largest airport in this country, the tenth largest airport in the world, the only major airport in the United States with nine consecutive quarters of where the average fare has declined, the fastest growing major airport in the United States in terms of low-cost carriers – such as Frontier Airlines, a homegrown success story.

I think that investment has clearly paid huge dividends. Our job, the 31 mayors, was to go out and convince the entire community that this [FasTrack] was a similar kind of investment, low-risk and a very high potential reward.

MR. CLARK: About a year ago, we completed a 16,000-foot runway at DIA, which was the sixth runway and completed the first phase of this large airport. Sixteen thousand feet have major market implications for us. We are a city at 5,280 feet -- that's where our name comes from, the Mile High City -- and flying large aircraft, fully-loaded at altitude and low humidity, it's very difficult to get a 747 off and fly it all the way to Asia.

We can get easily to Europe on a 12,000-foot runway. We needed a 16,000-foot runway to make sure we could get to Asia. We built that at a cost of $168 million, which sounds like a lot of money, but it's about a tenth of the price that other major airports in this country have built runways of a shorter distance, and that really had to do with the way in which the airport was planned and laid out on a very large piece of ground to make it that efficient and easy to expand on.

We’re going to do about 42 million passengers this year through DIA. It's built for a capacity of 100 million passengers, so we still have done a lot of great planning. We have a lot of capacity to grow that airport.

MAYOR HICKENLOOPER: Well, the other things that Denver all have -- that Denver has been attacking and addressing have all been around this kind of regional approach of finding ways to collaborate rather than vulcanizing one's efforts, and for everything from -- you know, one thing I've focused on is trying to bring the business community together with all the philanthropic community, the nonprofits, together to try and support the public school system as a different but similar example of collaboration. The region is, for the first time in its history, working together to secure a -- or to create a secure water supply for the future. You know, we're in a high, semi-arid climate. So that all those things are the kinds of group efforts that weren't -- and just in other communities aren't commonly undertaken on a regional basis.

These are our charts.

MR. CLARK: These are our Rorschach inkblot tests. (Laughter.)

I just want to give you some idea of how the region has grown since the 1920s. This is the seven county area that the Mayor referred to as being the size of Connecticut. This is the urbanized area of Denver in 1920; it had about 450,000 people. By 1940, this is the IL-20, and then the tan is the size of the growth, okay?

By the year 2000, we had grown to this size. And in the West in the U.S. there's always a concern about sprawl, and western cities have always had what they felt was an infinite resource, which was land, that they could continue to grow in a low-rise development pattern.

We got concerned about this pattern because population was growing rapidly but we were using up increasingly more land per resident than we had been in many previous years. So we created an urban growth area boundary around the region and said, is there some way we can contain population, increase densities and grow more efficiently and maintain these beautiful open spaces, these beautiful vistas that we have?

So with the growth of that boundary, we looked at what we would look like in the year 2020, and building this rail system was a part of this because the transit-oriented development permits you to densify around transit stations. This is the population by 2020, about 3.5 million people. That's what the urban area will look like in the region.

Had we not passed FasTracks on November 2nd and not created an urban growth area boundary, the same population goes from 700 square miles to 1,000 square miles.

QUESTION: The population will be how many million?

MR. CLARK: Three and a half million people. We're adding 900,000 people in the next 20 years in metropolitan Denver.

MAYOR HICKENLOOPER: Next 16 years.

MR. CLARK: Yeah, next 16. That's right. That's right.

MAYOR HICKENLOOPER: Time flies when you're having fun.

MR. CLARK: Time flies. The last time I looked at these numbers was in 2000. The next 16 years we'll have added 900,000 people.

MAYOR HICKENLOOPER: One of the nice things about allowing that growth to be concentrated is that passing FasTracks and building this light rail allows us to be proactive and instead of dictating where growth should not be allowed to occur, which is more common in Europe -- it's very difficult in the United States, where there is a great sense of entitlement by the owners of private property. This really gives great incentives to develop around these stations and closer in to the core part of the city, this will allow us to have a train going out to the airport and to deliver people to downtown. But we already have a train -- I believe I'm not mistaken that we are the only city in the country that does -- I know that we're the only city in the world that owns its own major ski resort, the ski resort Winter Park, which is one of the really great old ski resorts of North America. It's owned by the city and county of Denver now in partnership with a Canadian development company called InterWest.

But from our Union Station, which is where all this light rail will come together, there is throughout the winter a weekend ski train where get on the train at the station and you take the train up through, I think it's 27 or 28 tunnels through the mountains, and the train drops you off at the lift so that you actually never get in a car. [In downtown Denver,] you walk out of the beautiful turn-of-the-century Oxford Hotel, you walk one block to get on the train – there is a special car for putting your skis and your equipment up -- and then you take this train ride for an hour and a half up into the mountains and it drops you off at the foot of the lift, and you ski all day, and you come down at the end of the end of the day, you have cocktails on the train, you take the train leisurely home, and there is a hot bath waiting for you at the hotel. Allegedly. I've never taken the hot bath, but I'm quite sure that it's there.

MR. CLARK: The trip is considerably longer than the funicular out of Montreux, (Laughter) and we don't go through cities. You know, that's the thing I love about the funicular out of Montreux. You go through about three different towns to the top of the mountain. But it is very good. (Laughter.)

MAYOR HICKENLOOPER: It's hard to argue that Montreux is a major city. Not that I don't love Montreux.

MR. CLARK: Hey, I want -- (laughter). Oh, I don't have my Swiss Army Knife. That was one of my great experiences in Switzerland was going in, and my little spring was broken on my scissor, and we walked down the main street in Montreux and I went in into the Swiss Army Knife place, and the guy looked at and he says, "This is broken." And I said, "Well, I just want to get a new spring." And he said, "Absolutely not." Took it back, gave me a brand new Swiss Army Knife. And I said, "How much do I owe you?" He says, "No, this is guaranteed."

MAYOR HICKENLOOPER: Wow.

MR. CLARK: I love the town for that.

QUESTION: We don't have cities like Denver in Switzerland. I mean, Zurich has the biggest population, some 350,000, so its not that scale of the problem we face, although, of course, the country is smaller so we maybe don't have the same population to have this sprawl that you would have in Colorado. Could you elaborate a little bit more on the history of the project, when the idea was born and what was the major incentive to do it? How did you fight for it? What was the major problem maybe to get it done?

MAYOR HICKENLOOPER: Sure. Similar projects have been defeated at the polls - 7 years ago, 15 years ago, 20 years. I mean, several different times. And in this case, what we decided was that we needed to be more detailed, show the voters everything we're going to build. And so no promises of, you know, well, trust us, give us the money and we'll build something good. We delineated where each line went.

We did all the research in terms of building consensus between the different constituencies so that -- and I think Tom and the economic development group did a great job in talking to the home builders and then the real estate developers and the major employers and making sure that each of the different business constituencies saw their self-interest as how important this could be to their future in the city.

And, you know, Denver is a place about the top -- among the top cities of the United States in percentage of people that have chosen to live there for quality of life, not for a career, not for a job, but they get -- they come to Denver and they either start a business or find what they can have, but they've chosen to live there. So there was a willingness to -- for people to invest in proactively instead of reacting against circumstances, but proactively trying to anticipate what the perhaps unintended consequences would be of rapid economic growth, and rather than waiting to build an infrastructure that could accommodate that growth so that it wouldn't dilute the quality of life.

MR. CLARK: We also had a very unusual coalition. The environmental community, which about four years had tried a fairly proscriptive land-use management system, joined forces -- and we had fought them in another election with a lot of money to defeat their initiative -- now joined forces with us, realizing that this was an incentive, an incentivized way of directing development and doing smart growth, not as proscriptive as down-zoning and driving businesses to places where they wanted them to go.

And so we had a tremendous kind of army of environmental organizations who manned the telephones, that walked the precincts, did the literature drops. And the business community is always good at writing checks but it's not really good at putting people -- you know, going door to door dropping literature. And so we had a combination of the local government leadership, the environmental community, the business community, all acting in what their best -- what they perceived as their best interest, putting this together.

We did have opposition. The opposition had been very effective seven years ago of killing a similar project that wasn't as well defined as Fastracks. Great for the jokes, but they didn't get any traction.

MR. CLARK: By the time they came out against the project, the train had already left the station. (Laughter.)

MAYOR HICKENLOOPER: And the reason was that, because the business community was so committed financially to this, when the opposition stepped up, the business community put more money into the campaign to be able to change the message and to push back against the objections. So, ultimately, the only real objections that they could get any kind of traction with was that it was a tax increase.

MR. DENIG: I thought we -- go ahead.

MAYOR HICKENLOOPER: So this going to solve congestion problems for me, it's going to make it easier for me to get back and forth to work, it's a sound plan, it's well thought out, I know what I'm getting, I know where the stations are going. And they voted for it, about 60-40.

MR. CLARK: It's really unusual in the United States, relative what would be more common in Europe, the (inaudible) island, the number of restaurants in Denver, the large restaurant that brews its own beer. And I made a number of friends as a brewer in Europe, and I remember one in particular was a man named Hans Hopf , and the Hopfweis Brewery is in Meisbach, which is just south, up in the foothills of the Bavarian Alps from Munich. And we were sitting in this beautiful village, and they have bus service in and out of Munich, from dawn till 11:00 at night, during the rush hour, running every 20 minutes, and this is, you know, an hour outside of Munich, this beautiful little village that can't enough -- that much traffic to justify these buses.

But it's so important to them to keep people off the roads and to protect, you know, keep the urbanization in the villages and the development in certain enclosed areas, so that they really appreciate how valuable are their natural areas, I think in many cases, more than people in the United States.

And what, I think, Denver was saying is this was that they were taking a more aggressive step to protect the natural environment.

QUESTION: I don't know if you explained this example of Bavaria to your voters, but I don't know how then to react, but the cliché, if I may, of the people in Colorado probably more there think, oh, this is Europe and but we have our own cars, we have a lot of land. Why should we make so much money on it, and we need the liberty of our own cars. We don't want to sit in the sticky trains.

MAYOR HICKENLOOPER: Oh, yeah. The interesting thing was, some of the opponents tried to say that, well, what's happening is we're all paying this tax. It's a sales tax so we're all paying this tax, and really what we're doing is subsidizing people that should be paying, instead of $1 to get on the light rail train and come into the city, they should be paying $5, and then we wouldn't have to all pay this tax. It would be private enterprise. It would pay for itself.

And what we've tried to argue was the fact that those of us that want the liberty of our automobiles, that want to drive into work and might need to go out for lunch or need to drive during the day, it is in our self-interest to subsidize those people that are willing to give up their cars and think we should all chip in to make it as attractive as possible, to give them an incentive to get off the roads and take the train so that we don't have to spend 20 minutes of traffic in the morning and 20 minutes -- and present it that way.

And I gave this speech -- (laughter) -- I spoke close to a hundred times in September and October, starting last winter, in January and February, and every time someone -- I was the new mayor and somewhat popular, and every time someone wanted me to speak, the office would say, oh, Mayor Hickenlooper is too busy to speak in February. March, April, very, very busy. May, June -- the summer -- June, July, August, so busy, just no -- ah, and September or October, if you want Mayor Hickenlooper to some speak to your rotary club, to your neighborhood organization, to your business association, he can come in September, but certainly in October.

So I was speaking several times every day and pitching this idea of that we want to all chip in to pay a very small subsidy to encourage people to get off the road, so we don't have to spend so much time in traffic, so that we can get home earlier and spend more time with our families in the evenings, and rarely did I have a problem with that. People understood that that was in their self-interest.

MR. CLARK: Colorado is the most highly educated state in the country, and so you're really dealing with a pretty smart electorate for starters, people you can sit down and engage in a conversation that you don't -- who don't kind of take the soundbyte approach, who will actually follow an argument. And one of the things that helped sway was that in most American cities, we're not out of asphalt. There is plenty of asphalt for cars. It's just that we're out of it at key times. We're out of it typically from 6:30 in the morning till 8:30 in the morning, and from about 3:30 in the afternoon until 6 o'clock at night. And so the argument became this transit system was going to take between 16 and 23 percent of the traffic off of all the major arteries in and around the region during those key times. The public understood that.

QUESTION: 26 percent?

MR. CLARK: Sixteen to 23 percent during those rush hour periods. The opponents argued that it was only going to take 1 percent of the car traffic off the road. Well, on a 24-hour cycle that was true, but even in Washington, D.C., at 2 o'clock in the morning, it's pretty easy to get around in a car. And so the public wasn't kind of fooled by people trying to play a lot of statistical games. They were a pretty sharp electorate and I think followed the arguments pretty carefully.

And I think the last thing that always struck me is that Denver International Airport was a seminal event in the confidence of the community to build a very large project. People said you could never build an airport that big, this is never going to be able to be done, and the community took that challenge on. So we went back and said we're going to build up this entire transit system in 12 years. It wasn't like, oh, my God, that's never been done before because we had done the same thing in building this very large airport.

MAYOR HICKENLOOPER: Which is remarkable considering that we had a baggage overhang that cost $800 million. (Laughter.)

MR. CLARK: And we should have never let the baggage engineers out of the shoebox.

MAYOR HICKENLOOPER: That was actually United Airlines that demanded that to sign their lease with the airport, to commit to coming into the airport and that was their -- they were hoist on their own petard because they're still -- their landing fees still incorporate all those costs from that baggage. So it wasn't the city's fault. One of the rare mistakes of private enterprise. Rare.

MR. CLARK: It's a great idea, you know, the idea that you could connect through Denver if you flew in on Northwest and you were flying out on Continental that this baggage system would -- your bag would track electronically. Just a disaster. A disaster.

QUESTION: Was there any difference in perception among people who came only recently to your state, in comparison to people who were there for all their life? Probably you have also people from California or from the east coast who have different ideas about public transportation.

MR. CLARK: People who had been in the community 10 years or less supported the initiative 2 to 1. People who had been in the community 20 years or longer, essentially were a little bit opposed, about 47 percent in favor, 53 percent opposed. So you did have that, people bringing their experiences from other places.

MAYOR HICKENLOOPER: Part of that also was that people who had been there a long time don't want to see any growth, don't want to believe that it's going to happen. And so they think by voting, being against something like FasTrack, they are somehow going to slow down progress.

MR. CLARK: It's one of the great advantages of being a state of immigrants, you know, where only 40 percent of your people are native born, is that there is a great openness to new ideas and bringing people's experiences from other places. State government, for example, is a very tiny government and the governors don't have a lot of power, and a lot of it is reflected from people coming out of the Northeast and the Midwest where, you know, political machines and stuff had -- you know, had kind of dominated the political spectrum and people said, well, I don't want that centralized kind of government. And so Colorado state government tends to be a very decentralized system.

And so when you bring people from so many different places like we do in Colorado, and we bring -- we're very successful in importing scientists and engineers, by the way. We have the number one concentration of scientists and engineers in the country per 100,000 population.

MAYOR HICKENLOOPER: A huge number of Asians, Indians --

MR. CLARK: Yeah.

MAYOR HICKENLOOPER: -- engineers.

MR. CLARK: And, virtually, all the Japanese business leaders in post-World War II were actually taught English at Boulder, the University of Colorado in Boulder. And so you bring all those folks in and then it's the West, so there is kind of this openness to say, well, what did you learn from your experience in California? What did you learn at Bart? And what's the experience in Chicago with the L? What's your experience in New York and Washington with the subway? So it makes for a very engaging, intellectual environment.

QUESTION: Was the vote on November 2nd the last battle, or are there any court battles or battles with landowners, or what do you foresee?

MAYOR HICKENLOOPER: No, I think with the right of way, it's all been acquired. There is always a lot of details. You know, part of it, the next big challenge, is to make sure that we take this opportunity and build a truly great system, that we take this opportunity to distinguish Denver as -- I mean, rather than just building a station, we have to build a beautiful station. And rather than just sticking the station here and leaving what happens around it to chance, we need to really work with the private sector to make sure that we build density so that we get maximum -- and the idea is that around every station you have this little village.

And, again, and we have lost so many manufacturing jobs over the last couple decades. We have many what we call brown field sites, you know, former factories that we can build 20 or 25 blocks of four- and six- and eight-story high buildings, with housing and offices and movie theaters and retail, so that you don't always have to get in your automobile when you want to buy a loaf of bread or a newspaper or when you want to see a movie. You can be pedestrian and yet still have a high quality of life.

And I think if we focus on those things of, obviously, on time and on budget, which is what we've done for the two previous lines, but we have to be very responsible with the public's investment. So, on schedule, on budget, but also great beauty and great -- you know, taking what our station can be and what trains can be and what that experience can be to a higher level, and then lastly, maximizing the impact of the project by making sure that we get as a great a benefit as possible in terms of less automobiles, cleaner air and maintain a higher quality of life.

MR. CLARK: There was one election complaint filed against my organization, and that was dismissed with prejudice by the judge about ten days ago. It was the opponents trying to find something to delay it. It didn't last very long in court.

MR. DENIG: They have to go catch an airplane. Maybe one last question?

QUESTION: If I may, but I don't want you to miss the airplane. The financial question, maybe the most difficult one. I mean, your .04 percent, is it just to build FasTrack or is it a commercial subsidy to operate it, then?

MAYOR HICKENLOOPER: Well, it includes a subsidy, although once everything's completely built out, we should be able to operate it with perhaps half, .02.

QUESTION: Okay, thank you very much.