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Inside the Report The Durango Farmer’s Market: A Growing Business The 2010 Business Report: What’s It Going to Take to Survive? Networking in the Digital World


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Sales & Marketing Director Dennis Hanson General Manager Sharon Hermes Design Manager Brady Sutherlin Magazine Editor/Designer Dave Ohman

INSIDE

Publisher Richard Ballantine

Advertising Design/Prepress Mitchell Carter, Brady Choate, Jennifer Dickens, Laney Peterson, Michelle Uhl, Tracy Willbanks

4 Welcome

Advertising Sales Manager Dominick McCullough Account Executives Darryl Hunt, Karolann Latimer, Shawna Long, Larissa Lopez, Debby Morgan, Susan Wright

A publication of:

6 The Farmer’s Market: Locally-Grown Foods 20 The La Plata County Economic Review and Forecast: What It Will Take to Win 36 Will Networking with SmartPhones, Laptops, iPads and the Internet Help Your Business Grow?

Advertising Department The Durango Herald uses reasonable effort to include accurate and up-to-date information for its special magazine publications. However, all general information comes from a variety of sources and may change at any time for any reason. To verify specific information, refer to the organization or business noted. To view the online version of this guide, visit: www.durangoherald.com

On the cover: Emily and Mike Jenson, owners of Homegrown Biodynamics Farm at the Durango Farmers’ Market Photo: Dave Ohman

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Welcome Back

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n the course of preparing this report, the news involving domestic and international economic policies, events, unemployment data and the prospects for job creation seemed to change daily. This required expanded research to compile relevant information our readers can use. If anything defines the half-way point of 2010, it would be cautious optimism. On July 8, the International Monetary Fund (I.M.F) reported that, the world economy will grow faster than expected this year. Unfortunately, the recovery remains overshadowed by major risks, and the pace of growth is likely to slow next year. It almost sounds like good news. And therein is part of the problem in forecasting any sort of recovery. And bad habits on Wall Street remain hard to kill which means pulling out of this recession can still feel like skydiving: you hope everything works. Depending on which economists, politicians and pundits you favor, we may have hit the bottom of this recession. Or, not. As most European and Asian leaders at the recent G20 conference in Canada opted to trump further stimulus spending in order to cut their rising deficits, the Nobel-winning economist at Princeton University, Paul Krugman, is warning of another 1937 scenario when the Congress decided to cut stimulus spending. History tells us, he noted, that decision to pull back just as the economy was slowly coming out of The Great Depression’s deepest point of 1929-31, actually reversed the recovery’s momentum. So one of the questions for La Plata County’s economic recovery will concern our isolation from sluggish major metropolitan cities, and whether or not our isolation can translate into insulation from a possible double-dip recession. Businesses and local governments across La Plata County are already 4 La Plata County Business Report July 25, 2010

experiencing what has been taking place throughout the nation: getting by with fewer employees and the rising prospect that employees who lost their jobs since the fall 2008 meltdown of Wall Street will not be invited back to work. While technology is not the primary culprit in lost jobs, it will be technology that helps the survivors adjust to, and accommodate, the future. Our cover story salutes the Durango Farmers’ Market and the many vendors who come from near and far to sell their products. In particular, we are highlighting foods grown by local farmers and ranchers using sustainable and holistic practices. They are a source of pride for all of us, as well as an opportunity to eat healthy while supporting local farms and ranches. While not all are in La Plata County, their presence does enhance the Farmers’ Market experience. We also report on how entrepreneurs can tap into communications technology including the internet and the Smartphone technology, to help their businesses survive and thrive in these uncertain times and the future. As you peruse our second annual La Plata County Business Report, you’ll see that optimism and a willingness to evolve are key components in positioning governments and businesses for survival and growth during and after the recession. Given that most economists suggest that recessions will likely occur more frequently in the future, albeit with less impact than this one, there are lessons to be learned. We hope this report offers some helpful insights on the important issues affecting our local businesses providing the jobs that keep our economic engine running. We wish you all the very best for 2010 and look forward to your feedback. Eliza Searles and Ashley Bailey from Serious Delights Bakery


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COVER STORY:

Stories and Photography: Dave Ohman available, which means they will eat that corn non-stop all day, every day. Therefore, let them graze on grasses where our local farms and ranches focus on sustainable, ecological-

“When you shop locally, you support the local economy. When you support local farmers, you are supporting the local economy and the local ecology.” Dan James, The James Ranch, and board member of the Durango Farmers’ Market

ly holistic farming practices. While this results in higher costs of production, the quality of the yield is far superior. Local meat processor, Sunnyside Meats, is preferred by most ranchers for their humane practices and sustainable recycling systems. All of which makes the farmers’ market so valuable to our local economy and our health. For anyone who has made the Farmers’ Market part of their Saturday mornings, you know the sights, sounds and aromas of this weekly event. Displays of vegetables and flowers glow in the morning light; the massage booth is already busy getting the kinks out of sore muscles; meat samples are cooking sending wafts across grounds. The coffee is hot, the breads and pastries are fresh and the air is warm and friendly. Hydration Station manager, Steve Van Buskirk, arranges for local musical entertainment. From large ranches to small farms, these are the people who define the colors and textures of the fabric binding our local culture together. And they deserve our support. Here are a few examples.

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ver the years, an impression has emerged that farmers’ markets were places where you could find fresh meat and organic produce as long as you had plenty of disposable income. That may be true in the up-upscale communities of Beverly Hills, Silicon Valley, Chicago and the Hamptons. Not so in Durango. Farmers' market prices are a little higher than found in super markets but, consider that large “industrial” farms produce foods grown for maximum profit using pesticides to kill insects while poisoning the soil. When it comes to livestock such as cattle, sheep and pigs, grazing on pesticide-free grasses, their growth is all natural, not enhanced with corn or growth hormones. For instance, at industrial feedlots where large numbers of cattle are confined into crowded corrals, there’s no grass for grazing. Instead, corn is fed in inordinate quantities to livestock and poultry to hasten and enhance the growth process. Cattle will not stop eating when they are “full.” In fact, they will keep eating as long as the food is

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Located a few miles southeast of Ignacio, among spectacular rolling hills and pastures, Fox Fire Farms is a classic example of sustainable, holistic farming.

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ichard Parry, the third generation owner of this farm, along with employee Andrew Sterling, took me on an extensive tour of Fox Fire on a late spring morning. Richard continues to create and improve upon the family tradition of holistic organic farming overseeing the 1,100 acres, 900 of which are certified organic soil, including the relatively new vineyard where the grapes are grown for Fox Fire Farms wines. The wine tasting room is open 1-6 p.m. seven days a week. But call ahead to let them know you’re coming. Reservations are also required for tours of the entire farm where you can also visit the original school house which has been restored. Sustainable agriculture is a family tradition at Fox Fire Farms, from very efficient irrigation technology to the rotational grazing using multi-species herds. Multi-specie herds of cattle, sheep and goats means a more controlled grazing process since each specie grazes differently from the others. Herds are moved about in a grazing rotation process throughout the ranch. The constantly changing grazing habits and variations of manure nurture the soil that grows the grasses that feeds the animals. This eliminates overgrazing by any one specie. It's also about the varieties of manure. If each animal, with its own metabolism, is getting the proper foods while grazing in these pastures, the resulting, and unavoidable manure means soils rich in the nutrients needed to grow the grasses for said grazing. The farm is populated by 500 chickens, 16 heritage black pigs, 150 head of cattle and, from South Africa, 200 (Bore meat) goats and 1,200 Dorper Sheep.


Photo Spread: Multi-specie herds of cattle, sheep and goats means a more controlled grazing process since each specie grazes differently from the others. Inset: Pasture-grazed heritage black pigs are also moved around the farm to add to keep pastures in top condition.

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One would wonder how chickens roam freely without vulnerability to predators. Fortunately, two Great Pyrenees dogs keep the proverbial fox from the (mobile) hen house affectionately referred to as the “eggmobile.� These dogs bond with other animals at an early age so, as puppies these dogs were raised around chickens and are now devoted protectors for every one of their feathered friends.

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The irrigation system is very water-wise. The water flows downhill from the Vallecito Dam, a project Richard's father, Evan, helped build as a civil engineer in the 1930s. There are two primary ponds providing gravity-fed water to the irrigation system covering 560 acres. As the gravity-fed water system eliminates the need for electric pumps, the water is sprayed out with a system of KLine spray heads, an invention of a New Zealand dairy farmer. Fox Fire Farms selections include soy-free eggs laid by several breeds of chickens. These birds are pasture grazed (not to be confused with “freerange”) where they dine on grasses and bugs. The bugs provide a natural source of protein, a nutrient denied to factory chickens penned up and fed everything but grass, bugs and

The wine tasting room is open 1-6 p.m. seven days a week, but call ahead to let them know you're coming. Reservations are also required for tours of the farm. (L-R) Andrew Sterling and Richard Parry.

fresh air. Healthier chickens produce better eggs. One would wonder how chickens roam freely without vulnerability to predators. Fortunately, two Great Pyrenees dogs keep the proverbial fox from the (mobile) hen house (affectionately referred to as the “eggmobile”). These dogs bond with other animals at an early age so, as puppies these two dogs were raised around chickens and are now devoted protectors for every one of their feathered friends. The eggmobile allows the chickens to be transported to wherever their grazing habits are needed. Fox Fire Farms also provides certified organic beef to the 9-R school district as well as the schools of Ignacio, Cortez and Pagosa Springs.

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When Linda Mannix gave her husband, Jeff, a Texas Longhorn for his birthday, neither knew this would evolve into the Longhorns beef business.

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hese cattle, central characters in the “Lonesome Dove” series, may look a bit out of place in these parts but they have a lot to offer. Jeff has written extensively on the history of the Longhorn, a descendant of Spain's Andalusian cattle brought, originally, to the Western Hemisphere by Christopher Columbus. Jeff wrote, “The first cattle to set foot in North America, and the only breed of cattle to evolve without human management, the Texas Longhorn is a genetic goldmine.” The years between 1868-1878, when Longhorns were driven north out of Texas to Kansas City's railheads, amounted to the largest human-driven migration of animals in the history of the world.

This is Sancho Panza, reigning monarch and breeding bull at Santa Rita Ranch.

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Linda Mannix offers a little TLC to Flash Gordon (a.k.a. Gordie), a retired steer who spends his remaining days in the “assisted living� corral.

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One of the reasons for their original popularity was that Longhorns evolved genetically to take a punishing climate while grazing on all manner of plants unsuitable for any other breed. Then there are those unmistakable and glorious horns of the breed that stand out from all others. Before becoming the stuff of western-themed dĂŠcor, they served the original owners well. For cows, the tips of those expansive horns are curved backward to defend against predators such as wolves and coyotes. For bulls, the horn tips curve forward to fight off other bulls seeking to become the leader of the herd.

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Before Hereford cattle were brought from England, the Longhorn became ubiquitous from the southeast to the southwest regions of the new nation from the 16th century to the end of the 19th century. They provided the beef and the finances to pull the state of Texas and the West, out of a huge recession following the Civil War. One of the reasons for their original popularity was that Longhorns evolved Linda genetically to take a punishing climate while grazing on all manner of plants unsuitable for any other breed. Then there are those unmistakable and glorious horns of the breed that stand out from all others. Before becoming the stuff of western-themed décor, they served the original owners well. For cows, the tips of those expansive horns are curved backward to

defend against predators such as wolves and coyotes. For bulls, the horn tips curve forward to fight off

Mannix with Jeff Mannix in background other bulls seeking to become the leader of the herd. As shown in the accompanying photograph, the breeding bull at Santa Rita Ranch, Sancho Panza, is an imposing figure “with an eye for the ladies,” according to Linda. His prodigy are scattered throughout ranch. Then, there is Flash Gordon (aka

“Gordie”), a retired steer who lives a comfortable life in his golden years, sharing the “assisted living corral” with a couple of retired cows. The Santa Rita Ranch is the only local ranch raising Texas Longhorns for natural beef sales. Their hormone-free Longhorns have been grassraised, and grain finished (with beer mash (from the Steamworks brewery, no less) resulting in beef with “a fat and cholesterol content of the leanest seafood,” according to Jeff. So if you happen to stroll into the Durango Farmers’ Market, you are sure to find Linda and Jeff Mannix offering samples of Longhorn meatballs and sharing the lore of their Texas Longhorns. It’s “history on the hoof."

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ith 400 acres of the most comely pasturelands imaginable, beef cattle and Jersey cows are 100 percent grass fed, resulting in some of the best beef and milk to be found. Even their chickens graze about feeding on the grasses while picking off the insects in the process. The portable henhouse is moved about the ranch to allow the chickens to eat more insects that could harm the grasses needed for grazing. What? You didn’t know that chickens like bugs? Their systems thrive on insects which results in the healthiest of eggs, another product of the James Ranch family of businesses. The ranch has different businesses, all of which are run by members of the family. Kay and Dave operate the beef cattle business; their son Dan with his wife Becca run the Artisan Cheese and “Whey-Good Pork” side; Julie and Don Ott are in charge of the trees and eggs business; while Jennifer and her husband Joe Wheeling have been operating the garden business. James Ranch beef is so well-known in this region, instead, I would like to put the focus on two other businesses at James Ranch: The Artisan Cheese and Whey-Good Pork, and the Gardens at James Ranch. So let’s begin with the Artisan Cheeses of Dan James. I arrived at the James Ranch to watch Dan up close, in the clean room, start the cheese-making process. In one temperaturecontrolled vat, fresh, raw cow’s milk was being stirred. In an adjacent, smaller vat, fresh milk straight from the Jersey cows in the dairy was pouring in from a stainless steel pipe leading from the milking station about 20 yards uphill. No pasteurizing; all natural.

W The Animas River Valley was once known as the “Breadbasket for Silverton.” Cradled in the heart of the Animas River Valley, about 10 miles north of Durango, is The James Ranch, a family operation front to back. In 1961, Kay and Dave James purchased four farms and brought them together to create what has become a landmark ranch.

Opposite: Jennifer Ott operates The Gardens at James Ranch

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Jersey cows have a very rich cream content in their milk, perfect for making rich cheeses. It's also in a room adjacent to their modest store and separated by a window where shoppers and tourists can observe Dan perform his magic. You can see the cheese-making process by visiting www.jamesranch.net. Later in the day, after all that stirring, he drains the whey and is left with the cheese curd. The pigs at James Ranch love the whey, and, what can I say? It also makes better sausage. Opposite page: The process of making the James Ranch Aritisan Cheeses begins with milk straight from the dairy. The milk, still warm, is churned until they whey can be drained away (which will be fed to the pigs). The remaining curd will be used to make the cheese which must be aged for at least 60 days before Dan can sell it. At right: Pasture-grazed chickens love bugs so they’re transported around the ranch to help maintain healthy pastures.

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Story and Photography by Dave Ohman

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THE LA PLATA COUNTY OVERVIEW

Since our premiere edition of the La Plata County Business Report, the economy, from international, domestic and regional, is still hobbled by uncertainty for the future. With unemployment hovering at, or near, double-digit levels nationally, can there really be a recovery sooner rather than later? Some economists suggest the possibility of a "jobless recovery." For millions of unemployed Americans, that’s an oxymoron. Sustained high unemployment could force more consumers and businesses to seek, and use, more unsecured debt since the credit market has become tighter. The largest banks are still holding onto the bail-out money. If entrepreneurs can't get credit to start or expand their businesses, their survival can be thrown on thin ice. This, in turn, affects banks already feeling the strain of a weak economy as borrowers find it more difficult to pay off those lines of credit. Gains made in the economy could be all for naught if unemployment remains this high, or worse, if the economy takes a turn into a doubledip recession. As with the story about the European banks, our banks large and small are planning on maintaining larger cash reserves to cover loan defaults and other credit risks.

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s a jobless recovery possible? As the recession began to sink in, companies across the country starting laying off employees. If those companies survived with a reduced payroll, they may have figured out how to make do with fewer employees and will continue to recover without having to bring back former employees, or recruiting new workers, as sales and exports improve. Some job descriptions have disappeared along with the jobs and the employees. Will there be any jobs to come back to? It depends on who you ask. Robert Reich, former Secretary of Labor for the Clinton administration and current Professor of Public Policy at University of Californa Berkeley, wrote in an OpEd in the NY Times (June 1, 2010) that while unemployment figures remain high, the rate of entrepreneurship and new business start-ups are on the rise. The “Kauffman Index of Entrepreneureal Activity” cites that new business startups are at their highest level in 14 years. Normally, new businesses and consultants arise in good times when consumers have money to spend. But with the recession and such a high unemployment rate, there has been a corresponding urge for out-of-work professionals to start their own businesses as one of the last remaining opportunities left to them. In the past, according to Reich, it was the 35-44 year-olds that propelled the start-ups. Today, it is the gray heads who are leading the charge into selfemployment if only for their own survival. Consider: the ranks of the selfemployed over 65 expanded by 29 percent. With human resources managers trending nationally toward hiring those who already have jobs, rather than hiring the unemployed, those figures are not really surprising. While self-employment is not for everyone, challenging times like these are demanding new thinking.”

La Plata County at Large

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ow does that translate for La Plata County? Comments among local entrepreneurs and civic leaders are a mix of hopefulness and relief that it doesn't seem to be getting any worse. So far. La Plata County's concerns for the future are a mix of hope, fear, optimism and uncertainty. Recently, I met with Kellie Hotter, one of three members of the Planning Commission, and County Manager, Shawn Nau, to discuss what the county is doing to prepare for a future fraught with uncertainty. Nau was very clear that the strategic

plan was exactly that: a plan for longterm solutions. Given the economic downturn and the resulting drop in tax revenue, the county is preparing for a future with demands and expectations relative to the needs of the people and county governance. With the needs for mandatory and discretionary spending vying for the reduced revenue, certain costcutting measures are necessary to still meet those needs. In many cases, as a county job positions is vacated, there is a strong likelihood that it will not be filled. A lot of businesses that have had to do more with fewer employees, and getting comfortable with that paradigm, the county, too, will make adjustments, including the expansion and refreshLa Plata County Business Report July 25, 2010 21


upgrading of the computer systems. As we all know, as the technology is improving, it can also take charge of many tasks once performed by people. Within the county, there are several departments and agencies and each one has a plan while working with the County Manager. By working together and individually, to sort through the budgets, each department reduces the potential for conflict, also known as, “Whose ox is being gored?”

Durango. “The boomers are visiting but just not buying,” said LeBlanc. He also noted, “Given our current demographics and a nearly 25 year inventory, a true recovery for real estate and construction is a long way off.” A Land Use Development Code calls for more density in the downtown area, more open space, expanding the trail system, upgrading the water system, better street design, and maintaining our infrastructure at high levels including improved internet access.

Durango

Bayfield

eeting with Durango City Manager, Ron LeBlanc, there is a sense of stability at this point in 2010. With a current population of about 17,000 residents, and holding, LeBlanc believes Durango is poised well for the future. The city's efforts to create a brand seems to be paying off with the figures showing increases in airport use. Real estate and construction is off with the two largest projects, Three Springs and Twin Buttes, stalled as buyers from out of state remain unsure about the economy as a whole. Retirement portfolios of potential homebuyers have seen losses threatening the sense of security for those seeking to retire in

own Manager Justin Clifton is taking Bayfield to the cutting edge of communications technology and is looking forward to a wellconnected future for the town. With a plethora of cascading data, he is prepared to share the details of every plan and concept needed to take Bayfield to another level and beyond. What you quickly discover within Clifton's opening remarks is, Bayfield, with a population of about 2,000 inhabitants, is a town with a keen vision for the future. And unlike La Plata County government, most of Bayfield’s tax revenue comes from sales taxes, not property taxes. A spike in that “sales tax capture” can happen when small business, open their doors offering the kinds of merchandise and services that residents had to find in Durango. Bayfield’s finances are managed with a conservative flair. As the recession pulled revenue baselines downward, a keen sense of budget management allowed the town to reset some priorities, work with mandated services and create an operating reserve of 40 percent, which is twice the normal 20 percent model. How has Clifton been able to achieve the seemingly impossible? There have been some personnel adjustments without layoffs. In some

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cases, specific job descriptions have been modified to utilize newer technology. Water meter readers no long write everything into a log book which could take up to 150 hours with transcribing into the records. Now, it all happens with wireless data devices taking readings from new, wireless meters, all resulting in a mere 10 hours to accomplish the mission. Other cost-saving measures include pay freezes, energy savings (such as turning out the lights in rooms and hallways that are not in use), and advances in electronic connectivity. To help attract businesses with a need for his system, in turn, should help to attract high tech companies Bayfield’s communications technology is partnering with Durango and La Plata County to create an “open access network” connected to La Plata County’s “Fast Track” fiber optic system. This expanded broadband system will be built to handle a lot more traffic. The costs for expanding the fiber-optic network will be in part be a $400k share of a $4 million grant from the Department of Local Affairs secured by the newly formed Southwest Colorado Council of Governments. Taxes paid by tourists passing through are usually from sales along the 160 East corridor while it's the locals who keep sales alive along historic Mill Street. Other sources of sales tax revenue come from events such as the July 4th celebration and the Pine River Classic, an interstate basketball tournament which draws a significant number of visitors from out of state. As for construction and development, 2009 saw a surprising increase in building permits over 2008. Springtime is the usual period for most building permits and, as of mid-June of this year, Clifton is cautiously optimistic about 2010.


Ignacio

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his is a community of 720 full-time residents with a dream to attract tourists with a passion for the arts. I met with Kacey Correia, owner of Ignacio Floral & Espresso and head of the steering committee, and local cattle rancher, Caryl Schmid, who, with her husband, Cliff, own the nearby Schmid Ranch. The Town of Ignacio has not exactly been known as a tourist trap, perhaps, but chance upon the opportunity to meet with local leaders and you quickly discover an endearing soul struggling with the real and perceived sense of isolation, the highs and lows of tourism and the ebb and flow of energy production. Meanwhile, the businesses along its main thoroughfare, Goddard Avenue (Hwy. 172), are affected by the frequent rumblings and dust of tractor-trailer

rigs shattering the peace. Today, town planners and the local steering committee are actively pursuing a complete makeover to attract day-tourists. Correia said “We’re campaigning to wean Ignacio from its dependence on ever-shrinking government grants and the sagging fortunes of the energy industry, to become more self-sustaining. The goal for Ignacio's planners is to convert a wish list into a mandate for prosperity.” To get the ball rolling, the Town hired landscape architect, James Dietrich, to redesign the Goddard Avenue/Hwy. 172 streetscape, while store fronts are in for remodeling, as well. And if Ignacio Floral’s new patio entry is any indication of the baseline standards in progress, their vision for change has serious momentum. For instance, with outside sources of revenue, such as state and federal grants (lower in the short term), and energy (looking more unreliable in the long term), Ignacio is reshaping its

future as an "arts destination." This is the brand they believe will separate their town from “the herd,” as it were. This is a strong concept because, while the casino is a strong tourist draw, it's important for the town leaders to differentiate Ignacio brand from other Four Corners communities. Correia, with Ron Yellowbird, an energetic local artist and visionary, are working together to promote the arts. They see this project as more of a movement than a concept. It’s a longterm program that will increasingly attract the kind of tourism that creates more foot traffic for business owners along Goddard. With property taxes stabilized, the long view for needed tax revenue will come from sales taxes paid as a result from a “Think Local, Shop Local,” campaign for supporting local residents and businesses. One of the ideas to be implemented is a local “currency” consisting of a brass coin that will be circu-

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lated throughout the business community by customers who, in turn, will help to create more community awareness of the diversity amongst local businesses. They believe that as residents use these coins, a strong affinity link will develop between customers and local business owners thus resulting in a yin and yang that will support the town as a whole. Along with Ignacio Floral & Espresso, Roots Natural Food Store has continued to do more than survive as Amy Stuck and Jeff Ogden have made their store a fixture on Goddard Avenue owing, in part, to the Ignacio spirit of thinking locally. This is also a town that understands the effects the recession has had on everyone. For instance, Correia also owns other properties including residential units and she knew that some of her tenants were having a tough time paying the rent as their incomes became more strained. So rather than deal with vacant units and a loss of revenue, she opted to lower the rent to help her tenants in tough times while also maintaining a positive income stream on the properties.

Lodging

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ne indication of positive news has been the reservations coming into the RV parks. For instance, with so many “regulars” coming back year after year, parks such as the Alpen Rose on the 550 are booked out through the season, according to manager Joan Beverly. “In fact, many of customers stay for the entire season into October,” she said. Walking around the Alpen Rose RV Park, the sea of million-dollar RVs bears this out, The Durango Riverside RV Park, nestled between the 550 and the Animas River near Baker's Bridge, has enjoyed a fully booked summer.

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The Alpen Rose RV Park, just north of downtown Durango, is a busy landmark from spring into autumn. “We're slammed,” said general manager Melene Scott. While the recession may be affecting some travel plans, she notes, “We are way above 2009, which was better than 2008. Guests are coming in from Texas (the majority), Arizona, Albuquerque, and even as far as the East Coast. And we’re getting about 90 percent of our bookings online. Even retired senior citizens know how to Google, so we get them, too.” In the offseason, they offered a 35 percent discount and that generated a lot of repeat business without becoming a loss-leader. Noting signs of confidence, she said, “With the way things are going, we are planning on some remodeling, adding more riverfront cabins and making more room for those really large RV’s (40 feet

and longer).” However, as in 2009, reservations do not have the lead time of a few years ago when summer bookings were established by the end of that February. Now some of those reservations are being booked a week or two before guest arrivals. Some park the RV and stay until the end of October. Even the Haviland Lake campground with its first-come-first-serve system, has had campers lined up at the gate nearly every morning this summer, according to assistant host, Richard Gregory. We’ll have to see how the hotels and guest ranches fair by the end of the season. As with 2009, reservations are coming in but without much advance notice compared to past trends.

Durango Riverside RV Park sits between the 550 and the Animas River just south of Baker’s Bridge.


Banking Among our local banks, Bank of the San Juans, and Pine River Valley Bank have done a great job in navigating the troubled waters that have swamped much larger institutions.

Pine River Valley Bank As the only member of the State Banking Commission from our neck of the woods, Dan Ford, President, CEO and founder of Pine River Valley Bank, has a special perspective on the banking business. Ford noted that, unlike larger banks on the Front Range, which took some severe hits following the Wall Street debacle in the fall of 2008, our local banks took a more prudent, home-grown approach to the needs of local banking and local customers. For instance, according to Ford, “One would presume the board of directors of any given bank will provide prudent advice to the bank’s management team. Unfortunately, too many boards are made up of candidates with little or no banking acumen. So their advice from the boardroom may reflect more of their own personal interests rather than the needs of the bank and the community from whom the trust is given.” Mr. Ford, by contrast, is pleased with his selections for the bank’s board. Dan Ford, President and CEO) of Pine River Valley Bank. Photo courtesy of Pine River Valley Bank

So what is driving the success of this bank? Along with a healthy capital-to-assets ratio, the bank’s marketing has had to change with the times. For instance, their marketing campaign is based more on nurturing their existing customer base rather than pursuing new customers. Most successful entrepreneurs will tell you it is less expensive to get repeat business than to find new business. So the focus turns toward improving customers’ lives by providing additional profit-generating services such as loans and accounts. This also eliminates the expense of various loss-leaders in their marketing communications.

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La Pl Plata El Electric AAssociation… more than just the power company. 45 Stewar t Street | Durango | 970.247.5786

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Bank of the San Juans In an interview on April 21 of this year, Art Chase, CEO and founder of Bank of the San Juans, was guardedly optimistic about the prognosis of our local economy, an analysis similar to last year's report. Though the bank is not capitalized to accept the risks associated with 30 year mortgages, they do originate those loans before handing them off to a mortgage lending company. While new homes sales are down, remodeling has been a favorable option for homeowners who like their current location or simply can’t sell their home in this slow market. Thus there is a resurgence of home equity loans for home remodeling, and those loans are originated and held by the bank. In the past, those loans equaled up to 85 percent of the home’s evaluation. Now it’s more like a 75 percent limit on that same home evaluation. Other loans showing an up-tick, according to Chase, have been for used vehicles which are more affordable alternatives to the purchase of a new car or truck. “Some signs of the recovery are reflected in increased activity in savings accounts by consumers saving for a rainy day,” Chase noted. Frugality has just become more common among average American households since the recession was officially recognized by the Federal Reserve and the Department of the Treasury.

Retail Sector In our 2009 Business Report, timing was everything when it came to interviewing local retailers. In a nearly unanimous response to questions about sales performance in 2008 vs. 2009, we were advised to “check back in September when the summer sales numbers were in.” A common refrain in 2010 has been that while there seems to be a lot of 26 La Plata County Business Report July 25, 2010

tourist foot traffic, there aren’t many shopping bags in hand. So the tourists are here but will they spend their money this summer?

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Southwest Appliance oger Sterling, owner of Southwest Appliance, seems to have a clear idea of how to maintain customer loyalty while making adjustments to accommodate the shifting and uncertain economy. He has not wavered in his model for customer service. It sounds simple but, pick up the phone before the fourth ring; respond to customer messages in a timely manner; maintain the highest levels of phone courtesy; never over-

and medium price versions within those same brand groups. Another way Sterling has adjusted has been to increase his service staff from two to six employees. With more people opting to keep their older appliances rather than replace them, Southwest Appliance has created a business opportunity to service those customers, as well. This adds one more link in the trust between his company and the customers. By providing top-level service and repair, Sterling is also creating a repeat customer who will most likely buy their new appliances from the firm that provided the service in the past. Could sales be better? Of course. However, in today's economy, a willingness to adjust the business paradigm before things could get worse is how the survivors will be poised for new growth as the economy recovers.

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Appaloosa Trading Company

Roger Sterling, owner of Southwest Appliance, with a few examples of the latest product lines. promise or under-deliver; welcome that walk-in, don't smother him. In particular, while maintaining the brands that have helped bring success to the company, he has been adding a broader price range within those brands. Historically, Sterling has carried a more middle-to-high version of those brands and with great success. With the construction and real estate market putting downward pressure on the sales of higher end products, he has introduced low

e also returned to The Apploosa Trading Company owners, Debbie and Mike Gibson who’ve been in business for 28 years. In last year’s Report, when asked how they saw 2009, Mike said, “Staying even is the new up.” And while the recession has certainly had an effect on sales, they not only remain undeterred, they are poised for new growth. As they have done since opening their doors, they continue to reinvent, innovate and create anew to remain fresh while generating new excitement amongst repeat customers and new. Though the streetscape remodeling at College Drive and Main Avenue dampened sales at their store near the train station through the spring, the Gibsons are grateful that the construction project was completed before summer. Sales are back to a fairly brisk pace. The Gibsons are always gratified when old customers return and ask,


The Hermosa store is also headquarters for Appaloosa Trading Company

craftsmen working with leather and sterling silver in Mexico using American hides that he brought to the team. He recently returned after nearly 70 days at the Mexican facility to direct and work with those artisans.

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Backcountry Experience

“So what’s new this year?” The question always arises because their returning customers know Mike and Debbie always have something new merchandise to show. Since Appalossa Trading Company is the only store of its

genre in the region that makes all of its own products, Mike continues to design and/or direct the design and production of everything they sell. Years ago, the demand was outpacing their ability to make everything in the shop. So Mike hand-picked the

e also revisited the the sister-brother owners of Backcountry Experience, Becky and Ben Rockis. As the recession was literally sinking in, they were genuinely worried about the prospects for 2009. Instead, they found that families were opting for the outdoor experience with camping and hiking as an alternative to expensive travel plans. The summer had barely started as they adjusted to demand. This trend turned 2009 into a great year with 2010 showing positive signs as well. Last year, the Rockis’

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expanded their reach by opening another four-season store in the Village at Durango Mountain Resort.

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Honeyville ow Sweet It Is! The Honeyville store, about 10 miles north of Downtown Durango, is itself a tourist destination. The large colorful sign is difficult to miss, even in the dark. During a tour with owner Danny Culhane and his son, Kevin, it was clear that family pride and integrity are seamlessly integrated into all areas of production and sales. As for the recession’s effects on so many retailers, Honeyville, on the other hand, has not suffered any setbacks. One of the major changes some years ago was to sell off their beekeeping side of the business to a

As Danny noted, in order to handle the sales volume of this one and only store, the beekeeping side was too expensive and time-consuming to meet that demand. Hence the decision to buy honey from a firm that could provide the volume and the quality that is a hallmark of the company. The result has been a steady flow of honey from a reliable source combining with the ongoing in-house quality control in filtration and packaging. This has translated into yearly increases in sales and profits. In fact, there really isn’t an off season since their sales continue to thrive with the holidays, catalog and web sales and, of course, when the tourists start arriving in late spring, the main showroom rarely has a quiet moment. With only the one store, distribution to numerous other grocery and specialty retailers, showroom visitors and online customers.

while maintaining professional atmosphere. They also earned kudos from the Durango Design Board. Galinson has not been surprised by the store's success. He was surprised, however, by how quickly his first inventory sold out during the holidays, especially as a new startup. As he noted, “In hindsight, the only problem we experienced was becoming so successful ahead of schedule.” So far, Galinson’s marketing plan has been simple: “We focus on what the people want, not what we want.” He attributes much of that

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Pet Haus

Kevin Culhane sets the controls to fill jars with fresh warmed and filtered honey. local buyer and contract with a much larger commercial beekeeper in Greeley. The honey arrives in large drums and is poured through a rather high-tech (for the honey business) system of filtration and bottling. 28 La Plata County Business Report July 25, 2010

he Pet Haus, a pet supply store catering to dogs and cats, started out at a fast clip and has not slowed down since. In fact, keeping up with demand has been the only challenge. Since owner, Louis Galinson, opened the doors early last December, each month has been better than the last. His business model was based on the results of surveying more than 200 dog and cat owners seeking a store serving northbound customers driving home up the 550 or Florida toward Vallecito. While Creature Comforts, and Healthy Hounds & Fat Cats continue their success, Galinson’s research showed that folks driving home northward up Main Avenue wanted a shop on that side of town. The location he found was perfect but the old building needed a lot of updating. Using his own money, he created a masterful architectural remodel that combined a warm and funky playfulness, all

Pet Haus has been less than a year but has seen business improve each month success to repeat customers who've become very loyal in very short order. One point of pride has been the creation of a successful alliance with the La Plata County Humane Society. With some Society residents taking shelter at the Pet Haus, Galinson and his staff have happily placed many dogs and cats into good homes.


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Rocky Mountain Pawn & Gun ast year I checked in with a pawn shop in Bayfield because pawn shops are a pretty interesting marker for how the economy is going. This year, I spoke with Chris Burnett, manager at Rocky Mountain Pawn & Gun. According to Barnett, 2009 was a fairly normal year. That is, the old trends were still in place. A guy comes in to pawn a power tool to get some cash to meet an immediate need. He comes back and pays to take his tool home. In 2010, the recession with its pressure on personal cash flow issues has resulted in higher quality, bigger ticket goods being pawned with fewer “comebacks,” that is, fewer customers coming back to retrieve their goods. This means the shop may end up with too much merchandise and will have to soften pricing on goods on the shelves, or use some web sites to sell off overstocks. For firearms, they may go through the web site, www.gunbroker.com. For other merchandise, they may use CraigsList.

Restaurants

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erennially busy eateries include The Lost Dog, The Olde Tymers’ Café, Carver’s, Steamworks, The Durango Diner, Lady Falkenburgh's, The Diamond Belle (at the Strater Hotel) and others in that affordable, casual dining side. All are having a very good year. Their menus swell with fairly affordable fare including their days with burger specials. And burgers are selling well in a recession. The Olde Tymers'Café packs'em in for their Monday burger nights. On Friday, The Lost Dog carries their $5 burger with $2 draft beers all day on Fridays. The Cosmopolitan offers a happy hour James Ranch burger with a beer for $10 every day.

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ENO: Wine, Coffee and Tapas Bar mong the new business start-ups, ENO, the wine, coffee and tapa “bar” is in a great location with the right products, atmosphere and location for success. I met with manager and wine expert Allen Cuenca, to learn more about their business plan and how it’s been going since opening in the space formerly occupied by the Durango Custom Hat & Saddle Company. Eno, shares a patio with the Cyprus Café providing ample opportunity to capture spillover from the restaurant and nearby lodging guests who need a place to relax. This has all been quite by design as the owner, Alison Dance, who also owns the Cyprus Café, realized that if customers had to wait be seated at the Cyprus Cafe, they might perhaps go somewhere else for a glass of wine La Plata County Business Report July 25, 2010 29


and appetizer before returning for their table. However, it was not always easy to get them back, so opening Eno was a perfect solution to the problem. Eno has been open for several weeks and is already finding success easier than expected.

Durango Mountain Resort

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or Durango’s flagship ski resort, 2010 has been a good year for DMR as the ski season got off to a fast start with early snow and plenty of it throughout the season, resulting in a 6.3 percent increase in skier days over 2009. The 2010/2011 season will see some changes that should bring smiles to skiers and boarders alike. For instance, more trails, a winter Mardi Gras, Lift #8 is being replaced with a faster system with higher capacity and, there will be some terrain sculpting to create consistent extreme skiing/boarding runs. The 2009/2010 season featured 18 “Locals Days,” and this season will

Skis and boards stacked up at “the beach” in front of Purgy’s at DMR. 30 La Plata County Business Report July 25, 2010

offer even benefits for locals including more Partner-ship Passes with other Colorado resorts. Meanwhile, as DMR basks under the summer sun, the plaza and the mountain have been bustling at a good clip. There are also some new recreational opportunities including the Durango/Coco-Cola Bike Park at DMR. Of course, mountain bikers can take their gear on the lift up the mountain to explore the many downhill runs.

Automotive

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ur local automotive dealers were as vulnerable in 2009 as the rest of the country. Chrysler became part of Italy’s industrial giant, Fiat. Then GM went under the knife after a government loan/bailout. Ford turned down a similar bailout offer from the government and has since created its own turnaround, albeit the company remains deeply leveraged. This turnaround has been based on focusing on their core brand: Ford. Thus, in early June 2010, Ford Motor Company announced the demise of the Mercury line since there was not enough brand differentiation be-

tween the Ford and Mercury brands to justify keeping both. Ford had already been working to sell off their luxury brands, Jaguar, Aston Martin and Volvo. General Motors’ decision to retire Pontiac, Oldsmobile and Saturn, while selling off the Hummer and Saab brands, was necessary to reinforce the better selling brands while shedding those brands with diminishing sales. Thus, Chevrolet, Cadillac, Buick and GMC brands will take on flagship status with more investment in new engineering and styling. The results are already stunning as automotive writers gush over the new selections from Detroit.

Economy Nissan For Monte Roder, owner of Economy Nissan, things have been looking up since our 2009 interview with him. While sales of used vehicles remain important, there are signs that customers are beginning to open up their wallets. Nissan has done a lot of advertising to support dealers across the country. Another factor in some of their sales was the Toyota recall, a problem that tested long-standing customer loyalty. And brand loyalty is a marketing mainstay for nearly any business paradigm, especially for carmakers.

Economy Nissan keeps a steady inventory of new and used vehicles on the lot.


Near the end of May, Roder also took his company to another level in marketing by reinventing its web site. Along with a more contemporary look and feel, it is easier to navigate, provides video of the cars listed, and will link to everyone in the company. Link to a particular sales rep and you will go to their second tier page. That member of the team can then maintain communications with new and existing customers. The whole site has been designed to create “organic leads” with links to various search engines. In the first week since the new site was up and running, six potential customers arrived because of the new site. Three out of the six bought a car. That is a 50 percent response rate with closure, a result unheard of in direct marketing. As in last year’s interview, Roder said, “Innovation is a constant force for Economy Nissan.” Indeed, the age of electronic communications is not lost on Roder and his team. Members of the sales team can maintain contact with new and existing customers with Smartphones for texting or Tweeting to respond instantly to questions or concerns a customer may have. If the sales rep is out on vacation, or for medical reasons, and can't reach the customer, the “Carfinder” system will automatically notify a customer, who had come in looking for a particular new or used car, that the car they wanted had arrived. When asked about reflections on 2009, Roder said, “Despite the shaky economy, 2009 was a good year for us and 2010 looks like it will be just as good or better. Staying ahead of the curve pushes us to innovate every day.”

Morehart-Murphy Regional Auto Center Jim Morehart and Pat Murphy expressed a measured but upbeat tone reflecting a couple of seismic events since GM accepted a government loan early in

A special sales event under way at Morehart-Murphy Regional Auto Center’s new showroom La Plata County Business Report July 25, 2010 31


2009: GM’s decisions to jettison moribund brands Pontiac, Oldsmobile and Saturn, as well as Hummer and Saab; then, recently landing the local Chrysler/Dodge franchise. “One of the things that makes 2010 a bit better than ‘09 is, the recession and the bad news from The Big Three is old news today,” said Murphy. Buyers are seeing a clean slate, especially with automotive writers sending up promising reviews of The Big Three’s offerings for 2010. Repositioning GM’s remaining brands is also driving sales. For instance, Cadillac’s rock & roll marketing has successfully shed its image as the car for an over-55 buyer. Buick’s marketing, comparing itself to upscale Lexus lines, is also targeting a younger, upscale audience (seeking more value) with a focus on the resurgent styling and engineering revolutions at GM. Chevy’s retro-but-dramatic Camaro, and the iconic Corvette, continue to provide prime PR value for GM. Morehart-Murphy should also benefit from the creatively aggressive, edgy national ads for Chrysler,Dodge and Jeep. Cost controls for the dealership have also improved as Morehart and Murphy took control of inventory management. They noted, “There was a time when the manufacturers controlled how much inventory we had to keep on the lot. Whatever was on the truck was what we had to accept into inventory. Now we decide how much inventory of each brand to keep on hand.” For Morehart-Murphy Regional Auto Center, sales are up and costs are under control.

32 La Plata County Business Report July 25, 2010

Heavy Equipment

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Southwest Ag (SWAG) outhwest Ag was our cover story last year so we wanted to reconvene with the Hillyer family to see how 2010 is comparing to 2009. Garry Hillyer spoke for the family to describe some of the adjustments they have made to keep the company ahead of the game. To punctuate that game plan, Garry noted their constant philosophy: “Adapt or die.” So far, 2010 is doing better than 2009 with a larger market share as the company focused on their core businesses while increasing their sales activities in used equipment. One of the “secrets” of their success has been to not let complacency trump the need to innovate.

Real Estate:

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Prudential Triple S Real Estate arry Gardner has been with the firm for eight years and while he work on both residential and commercial property deals, his perspective on the commercial side of the business was particularly useful. While details remain confidential, Gardner is involved with a couple of potentially large land deals suggesting that commercial property development will be on the upswing over the next two years or so. If there are any inpediments in commercial transactions, there are the sizeable down payments of about 30-40 percent with a loan rate around 7-8 percent. Overall, Gardner is optimistic for a real turnaround by 2012 with more light manufacturing and retail development.

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Coldwell Banker/Heritage House n our 2009 Business Report, Gina Piccoli, partner at Coldwell Banker/Heritage House, described a very long recovery process for the real estate business. For an update on this segment of our local economy, I asked Piccoli, who is also on the Colorado Real Estate Commission, to compare 2009 with the first-half performance of 2010 and for a prognosis for the rest of the year. “The fourth quarter of 2009 showed improvement over the rest of that year while the first quarter of 2010 also showed incremental improvements, as well,” she said. “With low interest rates and a wide selection [of properties], the good deals are here with investors moving into this market.” “Land sales are pretty much dead in the water which means those potential buyers who might have purchased land to build their home, are finding that they’ll get a better deal buying a house with the land,” Piccoli said. Heritage House agent, Linda Logan, focuses most of her listings and sales in the mountain areas from Hermosa to Cascade Village. She notes this is a great time to buy in the mountains. Logan reflected, “Back in 1981 an acre of land in Purgatory sold for $10,000. Just last January a lot sold for $115,000. For investors or dreamers, this is a great time to buy.” In the credit arena, home loans are available, such as an 80/20 (20 percent down) at a current interest rate hovering in the 4.0-4.375 percent range for a 30 year fixed rate loan. There also are FHA loans for 97 percent of the purchase price, or jumbo loans with higher interest rates for those more expensive homes of $500k and upward.


The Gamble Oaks development at Tamarron is undergoing a dramatic makeover with completion scheduled for November 2010.

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Wells Group ohn Wells, owner/broker of the Wells Group, noted, “We have a feeder market for residential sales, mostly from New Mexico, Arizona, Texas and California. And these relocations are motivated by employment, retirements and second, or vacation, homes. We shouldnt be surprised that so many visitors

eventually become residents.� Recently, Julie Houston from The Wells Group, and Sandy Ratchford, Tamarron’s H.O.A president gave me a tour of Tamarron. Updating the look of the community has become a high priority in an effort to upgrade and re-brand Tamarron as a great place to live, rather than to just visit. This has been a resort community originally

developed in 1973 with the lodge and the Pine Cone condominiums followed by a second phase, Gamble Oaks. The most recent phase was the Highpoint development which has undergone major renovations by Keystone Construction, while High Country Construction is currently renovating Gamble Oaks. Upgrades and renovations for the Pine Cone development are up for bid. Eventually, Tamarron will evolve into a community of homeowners with some rentals available.

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Horizon Properties eof Schlittgen, owner/broker of Horizon Properties, confesses to being an optimist. It's an investors market as he keeps his eye on some of the big hitters ready to jump in. He also believes Durango is undervalued, especially compared to other Rocky Mountain towns with high profile

La Plata County Business Report July 25, 2010 33


Construction:

W Geof Schlittgen, owner/broker of Horizon Properties resorts and a diverse local economy. Lenders have gotten tighter on loan qualifications than a few years ago while appraisals are sometimes difficult because, with sales down, there are fewer comps to work with. Schlittgen also knows communications with clients will depend more and more on the electronics revolution, yet, the one-on-one contact will never be replaced. Even with email and the web, the deal will require that real contact time. So how does he view the rest of 2010? The market seems to be picking up a bit though the economy will continue to be fairly volatile with threats of a double-dip recession owing, in part, to the rumored jobless recovery. Nevertheless, he prefers to take things as they come with guarded optimism. Indeed, Piccoli, Wells, and Schlittgen all agree that it is a great time for anyone with the cash or a solid line of credit to buy a home while sellers need to be mindful of the amount of current inventory available. The consensus suggests sellers should take a realistic approach when pricing their home and property based upon current downward pressure on the market. For buyers with cash in hand, they're definitely in the driver's seat.

34 La Plata County Business Report July 25, 2010

ith new home construction down significantly, most contractors are taking on just about any project that comes their way. For homeowners who bought their current homes because of location, remodeling the old homestead makes perfectly good sense. First, while home prices and valuations have dropped, it means you might not get as much for your own house than you had thought. And even if you list your place, it may sit on the market for a year or longer. From a simple bathroom remodel to adding a room over the garage or to expanding the house, contractors are offering lots of experience in design/build, quality control, cost-containment and the latest in energy and building technology as inducements to be selected for your project.

Durango/La Plata County Airport

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tatistical results from Durango/La Plata County Airport show relatively strong increases in passenger activity from 2009. As of April 2009, there were 9,932 boardings. For April 2010, there were 11,131 which was an increase for April of 12.1 percent. And for the YTD, it was 18.5 percent. The higher March figures may reflect a lot of spring break activity targeting DMR and Telluride. On May 21, The Durango Herald reported that a name change for the airport was under consideration, due in part to the momentum in passenger traffic since Frontier Airlines

brought service between Durango and Denver. The name floating around with the most energy is Durango Regional Airport, since Durango has more name/brand recognition than La Plata County. Some Durangoans have been criticizing the name change simply because of the related costs including new signage and any and all revised printed materials. Other work includes alterations to the main intersection into the airport and this, too, has launched some local heat because of the deal with a California contractor with a Denver office. Those concerns may be assuaged if that contractor hires locals for the job.

Healthcare

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ercy Regional Medical Center and Animas Surgical Hospital are two of our largest healthcare facilities. Earlier this year, I asked Brett Gosney, CEO of Animas Surgical Hospital, about how his group is coping in the current economic climate and for his prognosis for moving the quality of healthcare forward. “The costs vs. the GDP (Gross Domestic Product) are steep while the vagaries of healthcare economics give rise to consumer fears,” Gosney said. As a physician-owned and managed facility, their success, Gosney said, “involves several dynamics working in harmony including shorter patient waiting times, empowering the medical and administrative staff to make decisions without layers of bureaucracy, treating patients as customers, and providing a billing system that is both comprehensible and quick.” Mercy Regional Medical Center is our largest healthcare facility with additional emphasis on trauma and


Mercy Regional Medical Center critical care, a wide range of specialists, and an array of medical imaging systems. According to Mercy’s public relations and marketing officer, David Bruzzese, as Durango grew, so did the need for more specialists. Mercy has expanded its roster of specialists to include orthopedic, spinal cord, reconstructive/cosmetic,ob/gyn, ENT (ear, nose, throat), urology, podiatry, ophthalmic surgery, low-dose diag-

nostic imaging, and pain management. Our appetites for outdoor activities and sports has also necessitated the recruitment of sports medicine specialists.

In Review

Jack Llewellyn, Executive Director of the Durango Chamber of Commerce and the La Plata Economic Development Action

Partnership is in for the long haul. And it’s all about bringing more companies and jobs to Durango. And Llewellyn believes his groups can attract the employers we'll need for a real recovery. As Llewellyn notes, in this recession, as we look for new ways to attract other businesses to La Plata County, business survival is going to have a lot to do with an entrepreneur’s ability to read the tea leaves, reinvent themselves, innovate with new ideas for products and services and, above all, to never forget the value of customer service. Fundamentally, economists, pundits, entrepreneurs and civic leaders are guessing on the how long the recession will last, and what it will take to turn the economy around. But one thing does seems abundantly clear: surviving and/or thriving through this recession feels like building an airplane while in flight.

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NETWORKING IN THE WIRELESS WORLD: WILL IT HELP YOUR BUSINESS? Hunting for new business? Trying to keep the business you've got? Can SmartPhones, laptop computers, wireless devices, the internet, and social networking sites make the word “isolation” obsolete? On the 150th anniversary of the first Pony Express courier riding hell-bent-for-leather for 10 days from St. Joseph, Missouri to Sacramento, California, it seems fitting to discuss the role technology plays in our daily lives, and for business. The gadgets are out there to help you manage, monitor and grow your business. From the necessary to the frivolous, it can be a daunting selection of devices and services. Is it time for you to wade out of the shallows into the deep end of technology? 36 La Plata County Business Report July 25, 2010

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nalogue. Digital. Google. Twitter (have you Tweeted lately?). Skype. eBay. Amazon. MySpace. YouTube. Facebook (“friend”: noun or verb?). LinkedIn. Monster. Craigslist. SmartPhone. BlackBerry. Droid. iPhone. iPad. iPod. MP3. Wireless. WiFiSatellite. Laptop. Mac. PC. Still with me? The Black Hole of Upgrades: Curse or Blessing

The technology in computers and now SmartPhones is advancing at such an exponential pace, when do you jump in? When do you upgrade? Remember your old pager? How about that Personal Digital Assistant (PDA) aka Palm Pilot, or Apple’s Newton? It was a digital appointment calendar, address book and reminder of important dates such as birthdays and anniversaries. Yet, have you noticed that Day-Timers are still around while those PDA’s are, ummm, obsolete? The fax machine that began in the early 1980s is still around to serve the instant gratification needs of modern entrepreneurs sending documents back and forth. But its days seem to be numbered. During the early 1990s, before AOL and the squeaky dial-up modem that gave us email, cell phones really

got some traction as they became better and smaller. But no matter how sleek or compact they became, they were still portable phones without wires. Then, along came a Canadian group, Research in Motion, with their BlackBerry. Now we could receive and send email, text, and surf the web, all on the fly. However, along with “progress,” there is also foreboding to balance the applause. For instance, when Steve Jobs, Apple’s CEO, introduced the iPhone to a waiting presscorp and multitudes of developers at the Macworld convention on January 9, 2007, he had, essentially, pulled the proverbial rug out from under the BlackBerry, at least for the moment, even though an iPhone meant signing up with AT&T. As a small computer, as well as phone, it sent all other cell phones into techno-purgatory. But it looks like a recall is coming on the iPhone4 because of a defect. Stay tuned. In the meantime, are we really hooked on this stuff or do these devices really deliver the goods as business tools? Can we really multitask with the gear and the app's. Are there dangers lurking with multitasking? Take the recent story in The New York Times, “Your Brain on


Computers,” by Matt Richtel (June 6, 2010) about a Silicon Valley family of four obsessed with gadgets. They can’t stop texting, emailing, gaming and otherwise multitasking. Those pesky but invaluable iPads and Smartphones are keeping the entire family plugged into the world but out of touch with each other, day in, day out. Here are excerpts from that story. Richtel reports, “…Tests at Stanford, an important center for research in this fast-growing field, showed multitaskers tended to search for new information rather than accept a reward for putting older, more valuable information to work. Researchers say these findings point to an interesting dynamic: multitaskers seem more sensitive than non-multitaskers to incoming information. “The results also illustrate an age-old conflict in the brain, one that technology may be intensifying. A portion of the brain acts as a control tower, helping a person focus and set priorities. More primitive parts of the brain, like those that process sight and sound, demand that it pay attention to new information, bombarding the control tower when they are stimulated.” For the entire story and photo essay, visit www.nytimes.com/2010/06/07/ technology/07brain.html. Is the PC becoming passé? Enter the iPad: Smaller and lighter than a laptop computer; bigger than an iPhone. Until recently, you still had to have a cell phone, too. Now Skype has offered an app’ that allows you to use that iPad to make calls. Perhaps the iPad's true value to the entrepreneur is the large selection of business app’s and the touch-screen keyboard that makes it feel like an indispensable, portable computer. Plus you can download books and publications from anywhere. Is there any adjustment to your habits? You may find yourself leaving the laptop at home. Then there are the tens of thousands of app’s to download. Is there a downside? Apple still has a few years left

on their contract with AT&T so, you may have to wait for AT&T to complete their 3G conversion of the Alltel system. Search Engines and Social Networking in Business We’re not here to judge the value of these sites to your business. However, you will need to keep your wits about you if you plan to register with any social networking sites. A lot of promises are made to their effectiveness to communicate your message. On the surface, these sites appear as chat rooms and, unfortunately, gossip mongers. Is this a safe environment in which to work? In some cases, yes. Promises of online security on networking sites have not been held in high regard as international hackers have a special gift for breaking past firewalls to access personal and business data that can be used to backtrack into credit card accounts and banking information. On May 25 of this year, the CEO of Facebook promised to install new and improved security software to protect subscribers from hackers. If you are already a Facebook member, are you feeling better yet? Not much, eh? And as of June 10, 2010, according to Nick Bilton, writing for The New York Times, "Twitter announced that it had acquired Smallthought Systems, the company behind an analytics service called Trendly that tracks real-time changes and user trends for Web site owners. The announcement, which was posted on Twitter’s company blog, explained that as Twitter had grown to handle millions of message updates a day, analytics had become an increasingly crucial part of improving our service. Twitter’s goal in acquiring Trendly will be to track users and their message updates as the site continues to grow.” Now do you feel better? It feels like a cyber version of a home invasion break-in to me. Safety caveats aside, social networking sites on the Web have attracted millions of visitors while launching new bands, actors, and

stand-up comics. Though most of these sites continue to bleed money by the millions, they remain considered by some as the new and endless frontier in marketing. Is this a forum for your advertising? For the in-the-know, that frontier is already old news. Social networking sites are the new word-of-mouth advertising as communications become a function of the moment. For instance, aside from the hot topic of privacy issues, running an ad on, say, BuzzTown or Facebook, could mean reaching a locally targeted audience or potential customers in the hundreds of millions. Can a chat room blog act as a word-of-mouth vehicle? Will it help your marketing efforts? Score big points with a customer and the word can spread rapidly, hence, the term, “going viral.” But, if you or someone in your company sends a customer into anger management therapy, that negative experience can reach that same large audience through Twitter, Facebook, YouTube, MySpace and several other sites, including some new ones that have been created, believe it or not, solely for the dissemination of negative banter. For instance, Twitter may even replace Hollywood’s more respected movie reviewers. Why? Movie-goers are leaving theaters with cell phones in hand texting and tweeting their own reviews of the film just seen. Producers with high hopes for a big summer hit can see their dreams realized or evaporated as millions of tweets turn thumbs up or down on opening box office weekend. This is to say, your business can rise or fall with each comment on a major networking site via texting, tweeting and those aforementioned social networking sites. Fingertips operating as word-of-mouth, advertising are now in control. One site that relies on customers referring friends, family and colleagues is LinkedIn, a social/business network site. As a member, let's assume you are either looking for new business or a job. You can virtually broadcast your qualifications and goals to either your list of “friends,” or to as broad an audience La Plata County Business Report July 25, 2010 37


as you like. The idea is, of course, that someone will see your information on LinkedIn and contact you with the information you're seeking. Are these the business tools you need? Hey, you never know! SmartPhones are operating as cell phones, computers, game rooms, web browsers, email systems, and cameras. What can’t they do? Perhaps too much. AT&T has found its broadband system slowing down owing to too many recreational users with games, and other popular app’s and this, in turn, has got millions of iPhone users grinding their teeth at night in frustration. It’s the equivalent of trying to pour tar into a drinking straw. To find a solution to this problem, AT&T recently announced that they are putting a cap on broadband usage. Unlike the all-you-can-eat data plan, there will be limits on their two plans with the best choice being a 2GB limit for $25 per month. Rumor has it that the other wireless carriers will follow suit. David Pogue, technology writer for the New York Times reported recently while evaluating the new Droid Incredible (available only to Verizon customers, so far) that while the Google-driven Droids are becoming big competitors to the iPhone, there seems to be another top-of-the-line Droid being introduced every few weeks. But as the news of Apple’s recall of the iPhone4 to fix the antenna and software (at a cost of about $1.4 billion), Droids are selling fast with a lot of disallusioned iPhone users making the switch to the Droids. Meanwhile, the BlackBerry remains the sales leader amongst the SmartPhone set. Are SmartPhones taking the laptop into obsolescence? For the management team, sales force and everyone in the supply chain, this connection through SmartPhones and touch-screen pads has also helped level the playing field for smaller companies com38 La Plata County Business Report July 25, 2010

peting against larger firms. As the pace of business reaches the speed of light, you need to be nimble. La Plata County business owners know all too well the pitfalls and advantage of our remote location. So connectivity is crucial. With thousands of business related applications available, you can connect with customers around the block or around the world, coordinate communications, conduct research, and transfer data and graphics. Make your web site smarter Nearly any business can benefit from a well-planned and designed web site. Let’s say you’'re a homebuilder with a web site. There’s the company profile, portfolio of projects and maybe some projects for sale. And let’s say your client lives out of state, which means they can’t watch the progress on the house being built. You tried to email some photos but their ISP couldn't handle that much data in one fell swoop. Solution: You can take your web site to a higher level while making it easier for your clients to communicate during the project. You can include a client check-in link to review photos at the job site, maybe even some streaming video. In the navigation bar (or buttons), they can click Progress. Then, by assigning a User ID name and a Password, your client can review the project in progress. You can also provide downloadable PDFs of change orders, contracts, estimates and invoices. Your client can approve suggested finish materials such as, selections of paint, granite for countertops, wood flooring, interior and exterior finishes and so on. The primary caveat of online finish samples: the colors will vary from computer monitor to monitor. Otherwise, you can maintain a high level of trust by keeping your client in the loop through the web site. In fact, it can add to the client's enthusiasm knowing they are part of the process. This is as much about retaining repeat business as much as developing new business.

The technology of running a business is growing at warp speed and it's only going to get faster. In a business market the size of La Plata County, “pressing-the-flesh,” person-to-person contact and extending common courtesy will always play a key role in developing and keeping customer loyalty. But keeping them in the loop will likely require deftness in this electronic revolution. Communications technology will continue to advance at a mind-numbing pace, which means you and your company will have to advance with it or make way for your competitors. Is this wireless revolution your ticket to ride? According to Anthony Mirhaydari, reporting for MSN Money, “A team of Morgan Stanley researchers led by Mary Meeker has spent considerable time on the subject, publishing a research note nearly 700 pages long. The key takeaway: Within five years, there will be more mobile Internet users than desktop Internet users. “Five trends are converging to drive the increase: faster mobile broadband network speeds, the popularity of social networking, online video, voice-over-IP technology and gotta-have-it mobile devices such as the iPhone and the Droids. And it’s more than just phones. Tablet computers, netbooks, GPS units, e-readers and wireless home appliances are all participating.” Staying ahead of the curve or else You should think about what you want from technology. Are there applications that improve your connections with your customer base? Does the technology move the deal down the road faster and better? There are a lot of applications to help you focus on your customers while keeping track of expenses and income. If you have the right tools, you should be able to stay ahead of the curve.


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La Plata Business Report 2010