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15th of November 2018

Real Estate

Colorado checked all the right “boxes” when The North Face parent company VF Corp. went looking for a new home

When Merrill Lynch executives in the 1990s were scouting a possible location for a new campus, an antelope appeared on a ridge in the Meridian area of Douglas County. They interpreted that as a sign they should bring thousands of jobs to the state.

And when Ardent Mills, a newly formed joint venture controlling a third of the country’s flour production, was hunting for a home base in 2013, Gov. John Hickenlooper swept in with a last-minute pitch that convinced the company to come to Denver, which wasn’t even in the running.

There were no such tipping points or eureka moments when VF Corp. picked metro Denver as its new headquarters to replace Greensboro, N.C., the city it has called home for 20 years.

Instead, one-by-one, metro Denver and Colorado met every item the parent company of several well-known apparel brands considered important, said Steve Rendle, VF’s president and CEO, at a roundtable on Wednesday in Denver.

“Colorado started to tick the boxes,” said Rendle, who was in town with the executives of the five outdoor brands VF will move to metro Denver to meet with state and city leaders.

Boxes included the state’s leadership in preserving outdoor spaces, a physically active population, its emphasis on recruiting the outdoor recreation industry, Denver’s ability to attract and retain talent, and a business climate that encourages innovation and collaboration.

The boxes that the Front Range couldn’t check off, such as plentiful and affordable housing, a lower cost of living and available labor, were items the company felt it could overcome.

VF’s move to metro Denver, which should start in earnest next summer, is part of a larger shift by the Fortune 250 company to focus on its activewear business lines and to have its brands work in closer collaboration.

On the same day the move to Denver was announced, VF Corp. also said it would spin off its slower-growing denim business, which includes the Wrangler and Lee brands, into a separate company based in Greensboro. About 600 of the VF jobs now in Greensboro will stay behind.

Vans, synonymous with Southern California, and Timberland, based in New Hampshire, will stay put. But five of the brands most closely associated with the outdoors will come to metro Denver, including The North Face, JanSport, Eagle Creek, Smartwool and Altra.

VF still hasn’t sorted out exactly where it is going and whether it will put its employees into one building or set up a campus, Rendle said. But working closely together should benefit everyone, most of all shareholders, he said.

Hyoung Chang/The Denver Post

Roger Spatz, president of Eagle Creek.

Hyoung Chang, The Denver Post

Brian Beckstead, president of Altra.

Hyoung Chang, The Denver Post

Jen McLaren, president of Smartwool.

Hyoung Chang, The Denver Post

Arne Arens, president of The North Face.

Hyoung Chang, The Denver Post

Steve Rendle, VF Corp Chair, CEO and president.

Hickenlooper, speaking at a news conference in Montbello Open Space Park where The North Face funded a climbing wall, said the region’s collaborative approach to economic development was a likely draw, as well as the “love of place” that residents in the state show.

About three quarters of the state’s population participates in outdoor recreation and the industry was responsible for $28 billion in spending and 300,000 jobs, he said. Denver’s reputation also rose last year when it snagged the coveted Outdoor Retailer summer and winter shows away from Salt Lake City.

Hickenlooper brought a Jansport backpack to the news conference that he purchased in 1975 and rode hard in his prior career as a geologist.

“It is in peak condition,” he boasted.

Colorado’s love of place, however, has also contributed to a backlash against more crowded streets and highways and empty lots filling up with new apartment buildings and row homes. Critics also question the $27 million in state payroll tax credits that VF will receive if it delivers on bringing the 800 jobs it has promised.

But Rendle defended the incentives, saying the move to metro Denver will cost VF $70 million, and that he has an obligation to deliver value to his shareholders. If other cities and states offered incentives, and Colorado offered none, he would have had a hard time justifying picking Denver.

“The incentives were an important aspect,” he said. “The incentives will help us offset the costs (of moving).”

It is still too early to know how many of the 800 jobs, which include 80 top executive positions, will be filled locally versus relocated.

All the workers whose jobs are relocating to Denver will be offered the chance to make the move. Whether they come or not, especially given the metro area’s higher housing costs compared to Greensboro, is another question.

“Every individual has to look at the opportunity,” Rendle said, promising the work environment at the new headquarters will be equal or better than what employees now have.

In that regard, VF Corp. is taking a different tack than Chipotle Mexican Grill, which is dumping much of its Denver workforce as it prepares to move its headquarters to Newport Beach, Calif.

Beyond the 800 jobs that will come directly from VF and its brands, the expectation is that suppliers and vendors will relocate offices and move jobs to be closer to a major customer. Rendle also noted that VF expects to acquire other brands over time, which could boost its presence in metro Denver even more.

Hickenlooper said his goal is to have some of those ancillary jobs get located into rural parts of Colorado, especially Steamboat Springs, which is losing 70 high-paying jobs as the headquarters of Smartwool moves to Denver.

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