The city and Colorado Springs Chamber of Commerce & EDC are partnering on a new $3 million financial incentives program they hope will help entice new and existing businesses to add high-paying jobs in the Springs.  

The Deal Closing Fund, as the program is called, is designed to do just that — close the deal with employers by giving them an extra incentive to choose Colorado Springs over cities in other states that the employers also are considering as a location to add jobs.

Employers who qualify for the Deal Closing Fund could receive direct cash awards of $1,000 to $5,000 per net new job they add in the Springs, under the program’s guidelines.

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Those awards would be performance-based; among other requirements, qualified employers must add a minimum number of jobs and retain them for a certain number of years. The awards would be on top of other financial incentives  they might receive from the state or city.

“This is that last money in,” said Johnna Reeder Kleymeyer, the Chamber & EDC’s president and CEO. “In a competitive situation … all things being equal, what makes them choose Colorado Springs over that other jurisdiction? This is that last deal-closing piece, to help a company realize just how bad Colorado Springs wants them and is ready to compete. That is exactly the purpose of this fund.”

Said Mayor John Suthers in a statement announcing the program: “The performance-based program incentivizes the creation of new high-paying jobs in our city, jobs that we need to acquire and retain talented individuals who contribute to making our city a great place to live.”

The use of financial incentives to woo employers and high-paying jobs has gone on for decades nationwide, and many cities and states use a variety of tools as they jockey for position and compete with each other.

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The cash awards that would be available under the Deal Closing Fund and made directly to a business would be unusual; often, financial incentives take the form of tax credits, tax rebates, low-interest loans or job-training funds, among other mechanisms.

Reeder Kleymeyer, however, said the Deal Closing Fund’s direct cash payments to eligible employers would demonstrate the seriousness and commitment on the part of the city and Chamber & EDC when it comes to bringing good jobs to town.

Under the public-private partnership, the city will provide the $3 million that will be used to fund the program for 2022.

That money might come from the city’s general fund or it could come from federal dollars via the American Rescue Plan Act, which provided economic stimulus funding to states, cities and other local governments in response to the COVID-19 pandemic, said Bob Cope, the city’s economic development officer. 

Suthers prefers to use the American Rescue Plan Act money, and believes the Deal Closing Fund qualifies for use of the federal funds under recently released guidance from the federal Department of the Treasury, Cope said.

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Which pot of money would be used to make Deal Closing Fund payments wouldn’t be decided until employers qualify for the program, he said.

The city hasn’t committed to funding the program beyond 2022, but will evaluate it at year’s end, Cope said. City officials, however, expect the program to be successful and they likely will consider additional contributions beyond this year, he said.

At the same time, the Chamber & EDC will seek to increase the roster of funding partners, such as El Paso County, other local governments, foundations, business groups and community organizations, Reeder Kleymeyer said.

“I am committed, the Chamber & EDC are committed, to growing this fund because we know the importance of having competitive tools,” she said.

“We would like to expand and have El Paso County,” Reeder Kleymeyer said. “We’d like to expand to our entire MSA (metropolitan statistical area), which is El Paso County and Teller County. We’d like for foundations to want to contribute to this. Any organization or individual that is committed to seeing this region grow high-paying jobs and a strong economy should be interested in these kinds of tools. And we want everyone to come to the table and partner.”

Reeder Kleymeyer said the chamber was approached by the city soon after she came on board last December as the organization’s president and CEO. The city wanted to know, in effect, what other economic development tools might be available to use in the pursuit of high-paying jobs and top-flight employers, she said.

The chamber then pitched the Deal Closing Fund to the city, and the program has been in the works since then, Reeder Kleymeyer said.

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While Colorado Springs will fund the program, the Chamber & EDC will administer it, which relieves the city of that burden, she added.

As envisioned, the program will emphasize financial incentives for employers and jobs in the Chamber & EDCs primary industry sectors, which include aerospace and defense, health care and medical technology, manufacturing and cybersecurity and information technology.  

The program also will target so-called primary employers — those that export a large portion of their goods and services to other markets, yet attract wealth and investment to a community where they operate.

Primary employers typically pay higher salaries and make significant capital investments in the areas where they operate, such as equipment purchases or the construction of offices or manufacturing plants.