Business

End of an era

Business Updates 2022
News  /  Business

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This was a massive year for Colorado Springs business news — and while the Business Journal covered all-around important stories, not much of our top news is necessarily “good news.”

The region’s home and rent prices shattered records, deepening the region’s housing affordability challenges. Concurrently, the construction industry and many other subsets of the local economy dealt with supply chain issues and historic inflation, as they continued to recover from the COVID pandemic. The year also began with workers in short supply, a problem fueled by the “Great Resignation.”

In childcare, for one, we need more local providers, and that’s something employers should keep an eye on as it relates to getting people (parents) into work. El Paso County schools also struggled to find enough teachers and ancillary staff members ahead of the 2022-2023 school year — an issue made worse by turbulence on school boards and superintendent turnover.

Also, following some controversial development battles in 2022, it appears neighbors are paying attention and using their voice when it comes to new construction proposals. See debates about the Ivywild Kum & Go and RetoolCOS, the city’s zoning code rewrite, a process that will continue into 2023.

Another bright spot on the housing front (depending on your perspective), is more units are on their way to being built. Multifamily projects are helping to catch housing quantity up to population growth.

Below, we’ll review, cite and update some of the Business Journal’s biggest news coverage from the last year. Each of these topics span multiple months and articles, so we’ll include a collection of headlines that readers should look up on our website or find in our print editions to take stock of 2022.

Apartment boom and ever-increasing rents

Developers started more multifamily projects in the region in 2022 compared to the previous year, as they tried to keep up with the region’s growing population and need for more housing quantity and affordability.

But despite the building boom, the cost of apartment rent continued to soar throughout the year, reaching its highest point ever recorded, the Business Journal reported in September.

From spring to early summer (second quarter of 2022), the median monthly rent price in the Colorado Springs metro area was hundreds of dollars more than in the second quarters of 2020 and 2021, according to research from Dr. Ron Throupe and Jennifer Von Stroh, who together compiled quarterly reports on the local rental market.

Median monthly rent was $1,587 during the second quarter of 2022 — an increase of $68 from the previous quarter — and $156 higher than the median rent in the second quarter of 2021 ($1,431). The 2022 Q2 median rent was also $340 higher than the median in the second quarter of 2020 ($1,247).

We also covered the wave of apartment construction taking over Downtown in 2022.

Downtown: Springs city living comes into its own (January)

East side of Downtown sees new life (April)

Building frenzy hasn’t stopped rent rise (September)

Small businesses displaced by Downtown apartments (October)

The latest: Throupe, a professor at the University of Denver’s Burns School of Real Estate and Construction Management, suspects that apartment rents have risen, and will continue to, through the remainder of 2022. Don’t be fooled by reports that rents are slipping nationally — this is a typical winter trend, he said. Folks should be on the lookout for spring 2023 prices for an accurate picture of what may come next year, Throupe said.

(The above Q2 numbers are the latest Throupe was able to provide, as he and Von Stroh did not produce another quarterly report on the Springs this year. Throupe told the Business Journal he hasn’t been able to get the funding or support for the analysis, and has been ill.)

On the construction side, there’s even more apartment construction projected for 2023, according to the Pikes Peak Regional Building Department (PPRBD).

By Dec. 8, there were 4,836 total multifamily units permitted to be built in the region in 2022 (year-to-date), which exceeds the 2021 total of 3,887 permitted units, PPRBD reported. These numbers reflect current or upcoming apartment construction in eight jurisdictions in the area — El Paso County, Colorado Springs, Manitou Springs, Fountain, Woodland Park, Green Mountain Falls, Monument and Palmer Lake, PPRBD Public Information Officer Greg Dingrando said.

Overall, there are 9,672 apartment units currently under construction in the region, PPRBD said Dec. 8 on its Facebook page.

Post-pandemic economic woes

The dominant economic news in 2022 was all about inflation, rising mortgage rates, supply chain issues and worker shortages — the after-effects of the COVID pandemic.

We covered multiple facets of these challenges, and examples of industries enduring and overcoming them in the Springs. Like, how the Colorado Manufacturing Network was created to be a central resource for the industry, a response to the supply chain and workforce crises. The network is “functioning as a supply chain tool that connects manufacturers with business partners locally and beyond, and helps customers to find them.” Or when inflation hit a 40-year high and the Federal Reserve raised its benchmark interest rate in July, in turn escalating mortgage rates.

UCHealth tackles workforce shortages (February)

Construction focuses on building workforce (March)

Dark outlook hangs over local auto dealers (March)

Rising interest rates buffet mortgage markets (July)

Manufacturers get creative on supply chain (November)

The latest: The Fed increased rates four more times after our July report, landing at 4.5 percent on Dec. 14, Forbes reported.

Childcare shortages pose major challenges to working parents. Photo by Greta Anderson Johns

The concerning state of childcare and preschool

Speaking of worker shortages, childcare providers and schools faced some significant ones of their own in 2022, even as the state plans to roll out its universal preschool (UPK) program next year. All 4-year-olds in Colorado will be able to get at least 15 hours of state-funded childcare or preschool starting in fall 2023, so look out for more discussion on that next year.

We covered the early questions surrounding that program, and the lack of childcare in El Paso County.

The private side of universal preschool (May)

Childcare crisis pressures employers, workers (June)

Kids in the Springs far outpace childcare (September)

The latest: The state has unveiled a crucial component of UPK — how much it plans to pay providers for each 4-year-old they enroll — and upped the amount of free preschool for 4-year-olds from 10 to 15 hours per week, Chalkbeat Colorado reported in November.

For kids who get 15 hours of care per week via UPK, childcare providers and preschools will receive an average of $6,040 per year, Chalkbeat reported. For kids who attend 30 hours a week (these increased hours are proposed for children and families with greater need), they will get $10,646 per year. The amounts are in the proposal stage and will vary by location, Chalkbeat reported.

The Colorado Department of Early Childhood reported that more than 250 providers had signed up to offer UPK as of Dec. 20, which equates to more than 12,000 preschool slots under the program, so far. Family sign-up begins Jan. 17.

School executives out after boards flip

Three El Paso County school districts have or will soon see superintendent or executive leadership changes, after their Boards of Education flipped to conservative majorities in the November 2021 election.

First out in March was former Superintendent Dr. Michael Thomas in Colorado Springs School District 11, in what the district called a “mutual separation” — although Thomas later said the political divisions and “public meltdowns” on the board contributed to his decision to leave.

The D11 board then hired Superintendent Michael Gaal on a one-year contract, in hopes that Gaal will start to turn around the district’s years-long declining enrollment and academic performance issues.

Then School District 49 saw two of its three chief executives leave over similar issues with political grandstanding and false statements by conservative members of that board. Chief Business Officer Brett Ridgway and Chief Operations Officer Pedro Almeida both resigned in July, leaving Peter Hilts as sole chief executive officer. At the time, Ridgway said his decision to leave had a lot to do with conservative board members’ strategy of stirring up anger about non-issues, then seeking support by fighting about those issues. D49 is currently examining whether to keep its “three-chief” model moving forward.

Finally, Academy District 20 Superintendent Tom Gregory announced that 2022-2023 would be his last school year in charge of that district, which is also run by a conservative-majority board. Gregory maintains he wasn’t pressured to leave the job, but told us in December that politics were a factor in his decision — he’s been spending most of his time since the pandemic clearing the air of false right-wing claims about the district (that Critical Race Theory is being taught, and that transgender students are abusing bathroom privileges, among others).

D49 board drama pushes out two leaders (July)

D11’s Gaal: One year to prove ‘immediate gains’ (July)

D20 parents, leadership reject former teacher’s

push for LGBTQ student segregation (December)

The latest: The political and at times offensive rhetoric from local school board members hasn’t stopped. More division can be expected through 2023, with several consequential school board seats up for grabs in November.

Neighbors push back against development

There was a months-long battle over the summer between Ivywild neighbors and the gas station and convenience store chain Kum & Go, which is now building a new location at South 8th and West Brookside streets.

The Ivywild Improvement Society and Skyway Association — organizations that represent the historic neighborhoods nearby — fought against the new Kum & Go alongside residents and the owner of Brookside Garden Apartments. Those apartments are located just feet away from the new gas station site. The Kum & Go opponents argued it will decrease their quality of life, and isn’t compatible with the neighborhood.

At any rate, City Council approved the new Kum & Go after several back-and-forth appeals over the project.

Ivywild neighbors win appeal against proposed Kum & Go (June)

KUM & GO AWAY: Zoning code section is neighbors’ fighting chance (July)

Kum & Go overrides Ivywild opposition (August)

The latest: The Business Journal was recently told that residents at Brookside are already being negatively impacted by heavy construction on the site. The Kum & Go debate also prompted the city’s Planning Commission to create a new buffer requirement for gas stations built in residential areas, in the rewrite of the zoning code, RetoolCOS, although this won’t affect the approved Ivywild gas station.

There’s another prominent development battle worth mentioning — Westsiders are again preparing to fight a plan to build apartment buildings at 2424 Garden of the Gods Road.

This is a second attempt by developer 2424GOTG to build 420 units at the site, after City Council rejected the same plan in August 2021 over public safety concerns. The council decision sparked appeals by 2424GOTG to district court (one of which was rejected earlier this year, and one that is still pending).

Developer’s rejected plan sparks outcry, again (December)

The latest: Prepare for 2424 Garden of the Gods to be an ongoing issue in 2023 — the city must reconsider the unchanged project as “new,” now that it’s been a year since it was first submitted to the planning department.

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