Springs to make more than $26 million
Read more: Local, State, Business, Politics, Economy, Community, Colorado Springs City Council, Hewlett Packard, Ten Year Deal, Jobs, Economy, Danielle Leigh, Colorado Springs, Money Matters
COLORADO SPRINGS, COLO. -- Colorado Springs has struck a 10-year economic development agreement with Hewlett-Packard (H.P.).
H.P. has been providing jobs to the Springs since it began operating in the city in 1961.
Recently, the city learned about 125 high paying jobs that were at risk because the company was looking to consolidate to locations outside of Colorado Springs.
According to Colorado Springs City Council members, this 10-year deal not only keeps those jobs local but will also create new jobs.
As part of the deal, H.P. will be building a $260 million data center facility in the Springs.
H.P. will get 100 percent rebates for many of the taxes it will have to pay the city associated with that project.
In less than one month, the world's largest technology company will add the 185,000 sqaure-foot facility to a site off of Rockrimmon Blvd.
That means near-instant jobs for the construction industry.
"They're estimating 300-400 construction jobs, and of course our construction industry right now is really hurting so that will be good," said council member Bernie Herpin.
The project will be completed over four years. By 2012 city development managers anticipate the new center will also add 25 new permanent jobs in the Springs.
"It's an excellent fit, especially during the economic times when we have high unemployment," Herpin said.
In exchange, the city will pay close to $5 million in rebates to H.P.
Meanwhile, the city council is facing the possibility of more budget cuts after cutting close to $50 million in the last year.
Certain viewers have asked how the city can afford this deal.
"We anticipate -- and that's why we do these kinds of things -- that we are going to bring in more than the $4.8 million we are going to pay out. This is money we wouldn't have gotten if they didn't move here," Herpin said.
To be exact, $26.14 million, between taxes the city doesn't rebate and utility use.
"This is a benefit not only to Colorado Springs but to the county and the state through their collections of sales and income taxes," Herpin said.
Herpin also said there is a low risk to the city with this deal.
Hewlett-Packard will only be reimbursed after spending money here in Colorado Springs.
The company will be given no money up-front.
