Weekend Interview: Mainspring CEO Fiona Arnold On Denver’s Economic Development

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To say that Mainspring founder and President Fiona Arnold has seen it all when it comes to Denver’s economic development is an understatement. 

Before founding Mainspring, Arnold worked as the executive director of the Colorado Office of Economic Development and International Trade, which is responsible for creating a “positive business climate” and supporting job growth in the state, according to the agency’s website. 

Arnold also spent more than seven years as the general counsel and vice president of Vail Resorts, an international resort development company that owns and operates popular resorts in Colorado and across the U.S., Canada and Australia. 

After spending so much time on the front lines, Arnold and her firm are now focused on developing commercial and residential real estate across Colorado with a focus on independent hospitality businesses. She took some time to sit down with Bisnow to discuss Denver’s growth over the last decade, and where the city has opportunities for future expansion. 

This interview has been lightly edited for length and clarity.

Bisnow: How would you describe Denver’s economic development over the last decade? What has the city done well to encourage this kind of development, and what areas of opportunity still exist?

Arnold: Denver has done very well, in my opinion. I think we have a very committed population that really cares about Denver, and we also have a large development community that wants to revitalize the city’s core. We’re kind of blessed with that actually. We’ve also had some tremendous projects happen that our city should be proud of like the Union Station redevelopment. That’s why Union Station is called “Denver’s living room” today. Really, it was like this catalytic project where Denverites kind of saw themselves and their city in a new light. 

I don’t know that the city has done much to shape the quality of redevelopments, though. For example, I worked with a small business that tried to get a permit for an outdoor patio. We applied in January, and by May I was begging the city to approve the permit. Then in July, the city told us we had to start the permitting process all over again. I’m just not sure the city has really spent time thinking about how to encourage that type of development. 

Bisnow: One of the fastest growing sectors of Denver’s economy is business services. What other sectors of its economy should Denver focus on building to support its CRE market?  

Arnold: I’m not sure I can tell you what specific sector of Denver’s economy that city leaders should focus on growing. That may be outside of my expertise. 

That being said, we really have to find a way to get downtown going again, and that really requires the city and the state to get their people back into the office. I know they’re probably concerned about losing staff if they start requiring people to spend time in the office, but they need to be there. Private companies are already doing this with little to no flexibility, which is right. One of the things we’re talking with landlords about is using their ground floor not as a lobby, but as a space that can create community and life. Think about Republic Plaza opening a Troy Guard wine bar in its lobby. That’s what I’m talking about. 

Bisnow: What will Denver look like in the next 10 years? What parts of the city do you think will experience the most growth and why?

Arnold: It’s gonna be back. Denver has made enough investments in infrastructure, and that makes Denver a desirable city from a commercial real estate point of view. The light rail and the train-to-plane projects seem like old news now, but those projects were a huge undertaking and really helped position the city in a good way. So we obviously need to keep making those investments. 

I think places in uptown like RiNo will see significant growth over the next decade. LoDo as well. I also think there will be some growth in the Capitol Hill area, too. When you go to these places now, you can’t hardly tell that downtown Denver has been struggling since the coronavirus pandemic began. Same goes for Platt Street.

Bisnow: What challenges lie ahead for Denver as the city grows? How can the city overcome those challenges?

Arnold: We have to get a handle on the street encampments and homelessness problem as it relates to public safety and trash in our public areas. I mean, I think we need to get really strict. We obviously need to increase the number of shelter beds and supportive housing, but we also need to enforce our camping ban. 

Building more affordable or attainable housing for middle class workers is also paramount. We don’t want to become a city that only caters to the wealthy. We need a middle class that can, and wants to, stay in Denver. I think the city needs to get creative and work with developers who are willing to put their hand up and try new things when it comes to building more housing. In order to do that, I think the city needs to give more tax breaks and other benefits to those developers. 

Bisnow: As a developer, what kinds of tools or policies would help you build more affordable housing?

Arnold: There needs to be a faster permitting process. Simple as that. There needs to be less fees attached to permitting, and there need to be tax breaks on property taxes. Essentially, there needs to be preferential treatment in terms of time and cost. If you’re willing to do an affordable housing project, then there needs to be a way where developers don’t pay property taxes on it. And that’s a huge offset when it comes to a business’ operating expenses. 

Bisnow: Like a lot of western cities, Denver could soon be facing issues related to water access. How could this impact Denver’s economic growth going forward? What about the city’s commercial real estate market?

Arnold: Water in the west is an extremely complicated topic, but I think Denver very well in locking in its water resources. So, I think Denver will be okay but some of the cities surrounding Denver may have issues and development won’t be able to occur because there’s simply no water to dedicate to it. But I don’t think that will impact the city of Denver. 

Bisnow: If you were back at the Office of Economic Development and International Trade today, what kind of policies related to economic development would you push to implement and why? Are there any rules or regulations that you would seek to get rid of? If so, which ones and why? What steps would you take to capitalize on the upheaval taking place with respect to remote work and its ability to impact companies’ relocation decisions?

Arnold: I think that question assumes that Denver needs to grow, and I’m not convinced that’s an accurate premise. Does Denver need to attract more businesses? I’m not sure. I think there are other cities where businesses are much more needed than they are in Denver. 

However, if Denver is still looking to attract businesses, then it needs to focus on attracting businesses that contribute to solving the issues that the city faces. The city also needs to attract companies with employees up and down the economic spectrum, and a variety of jobs that are available. Those are the kinds of things that obviously help cities become robust, diverse, and can survive economic ups and downs. 

Bisnow: When you were at OEDIT, you were working on solutions that were aimed at improving rural Colorado. What strategies do you think can be implemented in the more rural areas that are now seeing growth? What advice would you give smaller cities as they try to manage growth?

Arnold: One of the things we talked about at OEDIT was that many of Colorado’s smallest counties have assets that are sitting vacant and need to start thinking about how to convert those assets into an economic development business play. We’re working on a project with the city of Delta doing exactly that. I think that’s one lever small cities can pull. 

Another thing that small cities and counties should focus on is building enough housing to complement their business growth. The last thing you want is to bring new businesses to town and then have their employees pushed out because there isn’t enough housing. 

Bisnow: Make a bold prediction for the rest of this year.

Arnold: I don’t think there will be a recession, although there’s going to be big turnover in buildings and some re-evaluation on some big properties. I think that’s a good thing. Maybe not for the investors or funds that own the buildings. 

Bisnow: What do you like to do on weekends?

Arnold: I like to ride my bike and work on my farm. I call it a farm, but it’s really a large vegetable garden. I’m growing everything from apples and pears to kale, cauliflower, squash and every herb you can think of.