Denver has been in growth mode for decades, and lawyers have been helping drive that. A group of attorneys met Aug. 21 at Hogan Lovells’ Denver office, overlooking examples of that growth, such as Union Station and new LoDo construction. The group discussed how public finance work and community involvement have shaped Denver through those changes.
Participants were Cole Finegan, Hogan Lovells Denver office managing partner and former Denver city attorney; Dee Wisor, Butler Snow partner and public finance attorney; and Shannon Stevenson, Davis Graham & Stubbs partner and Metro Denver Economic Development Corporation executive committee member. Law Week editor Tony Flesor moderated the discussion.
LAW WEEK: All the growth in Denver and across Colorado seems to continue to just scale up. I’m curious in hearing where law firms come in on all of the development that’s going on.
Just to start off, let’s talk about some of the ways that law firms do play an economic development role in the community.
WISOR: I’m a public finance lawyer, and I’ve done that my whole career. So, the fact that our government issues bonds to build a capital project, and a multiplier effect of people having work to do, is economic development for sure. But then it’s things like incentives for developers to attract some development to a community or to fill a gap in a financing that makes it possible for development to occur.
And then there are things that are a little more complicated, like public-private partnerships, and, now, all the buzz is about opportunity zones. We’ll see if they actually result in anything, but it certainly sounds like people are spending time thinking about it.
FINEGAN: There are all sorts of ways — like Dee noted — in terms of the different mechanisms that you can use. I’ve been in Denver since 1987, and really, since 1987, we’ve been on an economic development roll in Colorado.
There was a low point in 1980. We were flat on our backs. There had been an oil and gas depression, there had been a real estate bust, and I think Denver was at a crossroads where there was a battle going on between two groups in Denver.
There was one group where their view was that Denver is a great place, it’s been a great place for 50 years, it works the way it is. All these people that want the new airport, they want all these new things, you’re screwing up a good thing.
And then there were the rest of us, frankly, who thought, well, hold on a minute, we need to get on top of this. We’re not going anywhere. I mean, we’re really stagnating. And that’s where the conversation started with Mayor Federico Peña, with Dick Fleming, who was the head of the Chamber of Commerce at the time, and with the number of people in the business community trying to figure out how we can jumpstart the economy and get people interested in moving to Colorado.
If you look at where we were in the late ’80s and early ’90s, most years we at best broke even in terms of attracting people into Denver. I think we lost population for a number of those years versus where we are today. That was probably the start of the modern advent. And I really feel like for the past 30 years, we have been in a pretty aggressive economic development mode. And lawyers have been involved in that in all different ways.
LAW WEEK: I was also curious if you might be able to get me caught up to speed on the work that your own firms are doing in that area. And some of the examples that you’re mentioning about the ways that law firms do get involved in development, how those played out for you.
WISOR: A project that Cole’s firm and we [Butler Snow] were involved in — and it’s proven to be very successful — is Denver Union Station. It’s hard to deny its impact particularly in this part of town. It was a very unique project and involved some federal financing that we ultimately paid off. It’s just proven to be very successful, but there was a lot of risk at the outset because it was a “build-it-and-you-will-come” financing scheme. And they came, and it was successful.
FINEGAN: I was originally involved with that in 1995 when I was at another law firm, and I represented Trillium and a man named Larry Grace in this. Literally everything you’re looking at, this was all rail, rail yards and slums and warehouses. Larry and I came down here, and I did a planned unit development in 1995 that we submitted to the Denver City Council. Jennifer Moulton at that time was the head of plan, and she insisted that we put some residential units in it. So Larry, and I sat down, and we just made up a number. We put in 2,000 units and laughed about it and thought, what a waste. Nobody’s going to live down here. That was 24 years ago.
I always use that as a really good caution that I’d be pretty thoughtful when people tell you what’s going to happen, because nobody really knows absolutely what’s going to happen.
But then you fast forward to 2008, and as Dee noted, the Union Station project was essentially going to be a bond financing. We put FasTracks in place. We had some other funding mechanisms. We had dug the hole, which I could look at filling with water behind Union Station, and we were all starting to slowly lose our mind because the economy collapsed and there was no market. So we all sat down and we had to re-figure how we were going to finance that because there was no bond market.
We essentially identified two programs under the federal Department of Transportation, one of them was called RRIF [Railroad Rehabilitation and Improvement Financing] and the other was called TIFIA [Transportation Infrastructure Financing and Financing Innovation Act], and we had to go borrow $300 million. That’s really how we bridged that. We were really in desperate straits at the time. The City and County of Denver put up its moral obligation as the collateral, which was hard to explain to the bureaucrats in Washington, D.C.
WISOR: And RTD made a commitment.
FINEGAN: And then we were able to do it with the financing. But that’s how it happened. I remember a moment in 2009 where I thought we’re just dead in the water. I didn’t know what we’re going to do. So, those things do happen.
STEVENSON: Good work on that. The first time I walked in there after that was finished, I was just blown away.
Two things that come to my mind that are a little bit different than the public financing piece for thinking about economic development. Our oil and gas clients — which obviously make an enormous contribution to Colorado’s economy — and the work that we do representing them throughout the regulatory processes and rulemaking. I think there’s a lot of room for common ground there, and there are a lot of things that the companies want to do to reduce their carbon footprint and make them sustainable sources of energy going forward in the future.
But obviously there’s a tension there in balancing our energy needs and their ability to operate while making sure we have a good environment. That’s an area where we’re always thinking about their economic contribution to the state and how they can best preserve them while meeting those obligations.
One thing DGS has done historically is taken on some pretty significant public interest litigation matters, most specifically around education funding and TABOR and Amendment 23. And it’s not really traditional economic development.
I think one of our biggest issues in Colorado is having an educated workforce that’s available here. If people can’t afford to be educated in our in our K–12 schools or afford higher education, then that just becomes a bigger and bigger problem. So I look at that public interest litigation as the way we contribute to economic development.
FINEGAN: So our firm, we’re special counsel to the national Western Stock Show. That’s maybe arguably the biggest economic development engine that we have going in recent times.
WISOR: National Western is a great example. And it’s still yet to be completed. There was this public finance piece, the voters of Denver supported doing debt in order to start the process. There’s been all this work around governance over there. And there are cities talking about public-private partnerships as part of the development process over there. It’s going to change that whole part of town, just like Coors Field changed this part of town. And there’s lots of room for lawyers to go and work there.
COMMUNITY INVOLVEMENT
LAW WEEK: And Cole, in a previous roundtable discussion, we talked about how there aren’t many large companies in Denver, so law firms might sometimes fill that gap in the community. Can you tell me how that fits in as well?
FINEGAN: Obviously, in a town like Denver, where we don’t have a lot of Fortune 500 companies, I think the law firms have an outsized role, and it may be different than in some larger communities.
We certainly are engaged in a different way at the table. If you look at Visit Denver, if you look at the Chamber of Commerce, if you look at the Downtown Denver Partnership, if you look at a lot of the entities that are organized, essentially, to advance economic growth, there are typically partners from Denver law firms that are engaged and are members of the board. So that’s interesting in the sense that I think we’re equal opportunity partners in the endeavor.
STEVENSON: I think a lot of the issues Cole touched on — the things that the Denver Metro Chamber is very involved in — I think lawyers have a very large presence and voice there in helping on all kinds of issues, attracting companies to this town and keeping them here and growing public private partnerships.
One of the things that we try to do [at DGS] is really to get our young attorneys involved in that stuff early on. And there are a lot of great programs, like Access Denver and Impact Denver, that take people who are new to the community and educate them about all the different issues that Denver faces.
I think it’s a great introduction to them to help understand what the issues are and some of the history of how things got to be the way they are and then gets them lined up to be on nonprofit boards.
I’m sure this is true for you guys as well, but I think we [DGS] have a lawyer on just about every board there is, and every one of our lawyers is on a board.
FINEGAN: I think one of the really interesting things about practicing law in Denver, and that I’ve enjoyed a lot in this space, is a lot of us know each other. Because we go back and forth. And I think one of the things that makes Denver great is how integrated the community is. And we are all involved in the community, we all live here, we all want it to prosper. We want our children and our grandchildren to do well.
We have offices in 50 places around the world. And I think everyone in Hogan Lovells would talk about what a unique community we have in Denver, where it does seem actually to be pretty well knit together and people are engaged together.
STEVENSON: I agree. I think this is an amazingly well knit community. It’s why I decided to stay here and what’s kept me here for the last 15 or 16 years.
I worry, though, that I want other people to have that same experience that I’ve had of, wow, you can come here and you can grow a law practice and become involved and all that.
Quite frankly, I think one of our biggest challenges is watching the skyrocketing cost of housing and our ability to attract young people to come here and whether it really is a place that somebody can move here and have their family and live close to town and do all those great things. I’m interested in hearing about being at a law firm like yours [Cole] with many other offices, if you’ve seen any of those tensions blowing up.
FINEGAN: So here’s the good news. We have a lot of people who want to live here. Every month I field requests for the people who, they love it in Washington, but they sure like it in Denver.
Right now we’re probably 90 lawyers here in Denver. And we probably have 10 or 11 who in the last six or seven years have come from other offices because they want to live here. So comparatively speaking, we’re still very desirable.
But I think they’re a little surprised when they come. I think they’re also incredibly pleasantly surprised at how easy it is to be involved in the community and to be active in the community, because like the things we were just talking about a minute ago, it’s still a pretty accessible city.
WISOR: Affordable housing is a great point, though, and a potential drag on economic development.
I think about here in the metro area, teachers and first responders can’t afford to live close to where they work because of affordability issues.
And then this is more than just a Denver problem, it’s a statewide issue. I happen to be watching an issue play out in the Vail Valley where they’d like to build some affordable housing, but it’s also going to take away the place where a herd of bighorn sheep spend all their time. There’s this tension between the things we love — the wildlife — and needing to have affordable housing.
Challenges to Development
LAW WEEK: I’m curious how you think Denver differs from other places in terms of that type of involvement. Do you think that there’s something about the activity that’s been happening in Denver that makes us unique?
FINEGAN: Shannon alluded to one of the things that I think makes Denver unique and what makes Colorado unique — for better or worse — is TABOR and the initiative process.
TABOR, in my opinion, has been a hugely divisive tool and a law that has caused a lot of problems. And Ironically, because its author, Douglas Bruce hates lawyers, it’s turned into a full Employment Act for lawyers.
I think what has made life challenging in Colorado is over time, since 1991, we’ve evolved where we now have TABOR, we have Amendment 23, which controls K–12, we have the Gallagher Amendment, which, artificially depresses the property taxes on private houses.
And then we’ve got a whole other bevy of programs that increasingly make it harder and harder to maneuver in terms of how you can allocate resources. And we also now have essentially initiative fever, where we refer or initiate ballot measures. And I don’t think that’s going to change anytime soon.
I think it makes things complicated. If you look at some other cities, they still have representative government in a way that we don’t. And they’re able to make decisions. I’m not saying they make the right decisions or the wrong decisions, but they can certainly make those decisions more quickly.
STEVENSON: The 10th Circuit just sent back the TABOR case.
WISOR: The Supreme Court just decided that a total repeal would be a single subject. Now, the politics of it. Even if somebody got on the ballot, it’s hard for me to imagine the voters in Colorado voting to repeal it.
LAW WEEK: So on that TABOR subject it seems like that should be slowing things down, like those public financing projects, and it seems like it’s really not. It seems like things are just rolling ahead in spite of that.
WISOR: I think creativity by the legal community has blunted that. And it has helped that the courts have by and large, ruled in favor of the government and not against the government. There are a couple early cases that have gone the other way.
FINEGAN: I think TABOR has helped, unwittingly, to contribute to the schism between the urban and the rural communities. I think the cities in particular have become very skilled, and the voters have become fairly sophisticated, in terms of analyzing what they want to pay for and what they’re willing to pay for and have been able to remove themselves from TABOR, in a surgical manner, periodically, and decide what they’re going to pay for, what they’re willing to tax themselves for and pay for.
I think, in the rural communities, they have struggled more with that for two reasons: One, I think they’ve struggled just because I think there’s more of a philosophical disagreement over those issues. And secondly, in a lot of the really small cities, they’re covered by statute — they aren’t home rule communities, they aren’t home rule counties or home rule cities — So they are much more creatures of state law and are bound to that. And it becomes much more difficult for them to get involved.
I think over time, you’re beginning to see what’s going on in the smaller communities, where their infrastructure is literally falling apart, and there they are having a hard time. That impedes economic development.
As Dee was alluding to, if you don’t have a good road, it’s going to be hard for you to attract anybody’s company because they’ve got to have a road. They’ve got to have some infrastructure, they’ve got to have some basic components.
WISOR: I think this has led to some financing structures that actually create good work for lawyers. Going back to the transportation issue, we’re doing all these managed lane projects like U.S. 36 or on north side I-25 now, and I think south I-25 is going to have one.
People may not like the fact that we have these “Lexus lanes,” but they are a way that we’re adding capacity that we couldn’t otherwise afford to because we can’t raise the gas tax.
Lawyers as Economic Drivers
LAW WEEK: I was curious about any areas where you feel lawyers or law firms themselves might also be drivers of economic development as well. How do you see law firms taking the lead in that area?
WISOR: One place where maybe all of our firms have done something, going back to the earlier conversation, is Opportunity Zones. And they came about as a result of the 2017 Tax Act.
I think law firms are, together with some financial folks really in the lead of trying to at least educate people about what the possibilities are.
FINEGAN: I think law is evolving, like every major business in this country.
Shannon’s younger than Dee and I, and it’s a very different world. But if you looked at law firms 30 years ago, versus the way we function today, at least in my experience they function much more like a corporation, where we’re constantly looking at different ways to have efficiencies.
I think you’re going to see law firms as major drivers in artificial intelligence, for better or worse, in terms of how artificial intelligence is used. I think you’re going to see us probably as drivers in data and how data is collected and used and how we look at those different metrics, and how you make decisions.
You’ll probably begin to see, in my experience, more of a demarcation between firms and who does what law, in terms of people who do a certain intellectual property, in terms of people who do a privacy and a cybersecurity practice.
I think you’re probably going to see law firms, particularly in the privacy and cybersecurity sphere, as the drivers of economic development because that is an area where everybody is terrified. Everybody is really scared to death about what is going on with their telephone and what people know about you or don’t know about you, or is your business being hacked.
LAW WEEK: That doesn’t sound like any of those are necessarily tied to any geographic area. That’s just a mark of how things might be changing in general. If you’re talking about artificial intelligence or privacy, that doesn’t necessarily need to be tethered to any one specific place. Do you feel like that’s growing outside of that box that law firms aren’t necessarily having to be involved in their specific physical place and instead will be leading in an entire industry area?
FINEGAN: For a law firm like Hogan Lovells where we’re all around the world, it’s increasingly that piece. We want to be in Denver because we want to be part of the Rocky Mountain West. We think this is a vibrant, growing part of the country. And we want to be in New York, we want to be in California.
But the subjects, and the subject matter tends to now span everywhere. All law firms are dealing with things all around the world now in ways that you never would have years ago. I would guess all of us are involved in matters that span certainly the continent and probably all over the world.
STEVENSON: In certain ways, I think law firms started to act more and more like corporations. And I think some of that is positive. And that there’s not sort of the traditional law firm partnership anymore because people are so driven by profits and profits per partner.
But I think there still is the aspect that we are granted a monopoly to do what we do. And at least I personally feel like there is a professional responsibility and obligation to the community that comes with that and makes it very easy to remind myself, in my daily work, it’s not just about the billable hour, it’s also about the other ways that either I, myself personally, or our law firm contributes to our community and fulfills our responsibilities.
But one of the technological developments that we see is that for certain kinds of rote legal work, there are other resources available. There are all these things where you can go and do your own will or make your own LLC operating agreement or whatever you need to do. It will be interesting to see if the “monopoly” of law practice erodes, if lawyers stopped feeling the same amount of professional responsibility to their communities, which I think would be not good, because I think we do have a really important role to play.
WISOR: We’ll make the public private partnerships. What we’re seeing on a few of these are that lawyers are engaged in the dispute part of those, and we’re going to find out whether those contract provisions that people spend time working on are actually working the way they planned and that they allocate the risk to the right person.
But I think for lawyers, it’s sort of like cradle to grave. Lawyers birthed the contract and are now figuring out how this dispute resolution works.
FINEGAN: If you look at Colorado and its modern state, and if you look at the past 30 years, I think it’s really been a pretty remarkable combination of the government and the private sector. And I think lawyers have been at the intersection of that combination.
Honestly, what you’re sitting in right now, and a lot of what modern Denver is has come about because the citizens and the local government and the state government made significant bets on themselves and investment in ourselves. Without those investments, none of this would exist. And lawyers have been involved in all of those.
The economic development has really been that partnership between the government and between the private sector. And I think lawyers have really had an integral part of that. I think we should all take a lot of pride in that. And we were engaged in that.
STEVENSON: And that is to me one of the most distinguishing things about Denver relative to other places. I had moved here from Atlanta, and when I first moved, I was like, I can take the bus to work. And there’s multiple routes, and it’s reliable. And it’s easy. I was wondering why this is so much easier than when I lived in Atlanta. There, it’s a bigger city, and they couldn’t make public transportation function, because they couldn’t get the multiple counties and municipalities of the metro area to cooperate on anything.
FINEGAN: We’ve had a lot of fights here. We’ve had a lot of brawls. There’s been a lot of back and forth. There have been some crazy moments. I had a laugh about five years ago, I was with some people who obviously were much younger, and one said, “So was there really a problem building the airport?” and I just burst out laughing. Like oh my God. But we did come together and do that.
So, that’s why I’m still optimistic. I know this last mayoral election, and these municipal elections were all about development. And there are certainly pieces of it that are not great. And we certainly have a lot of traffic, and we have a lot of construction. But compared to the issues we had over 30 years ago, these are all solvable problems, we still have a place people want to be, in a community people want to live in.
LAW WEEK: Where do you think things go from here? And where do you see the role for attorneys and for local law firms to continue to be involved in that direction?
WISOR: The growth is probably not going to continue like this. And whether we have a recession next year or three years from now, we’re a little long in the tooth for this expansion. And statistically, we’re going to hit a recession, but I actually feel like we’re pretty well poised to survive that and, and have in place the fundamentals. We have a much more diverse economy now than when you came in. It was the oil and gas industry, it was in the tank and drove everything down. So I think we’re more diverse.
STEVENSON: One thing that I’ve noticed about our legal community here over the years is it’s pretty adaptable. I think whether it’s the corporate lawyers or the litigators or whomever, people really see, I mean, our economy will change. And we’ve adapted to support lots of different industries.
I think we’re seeing a real shift now in terms of manufacturing. I think cannabis is a huge, obviously developing field. And I think it’s fun to watch, both individual lawyers and the community really shift to meet those needs.
Quite frankly, this town has a glut of talented lawyers, because people want to live here. And it’s a great group of people to practice with. And I think they have the skills and ability and foresight to match whatever industries come to this area.
FINEGAN: I think the growth has to slow to a degree. It’s just remarkable how it continues. But it’s a beautiful place to live.
People want to be here, and I think as long as we remain vigilant about not spoiling it, in terms of our climate and our environment, it will continue to be a very attractive place.
And as Shannon noted, lawyers are very adaptable people. We will survive. I have no doubt about that.
LAW WEEK: And is there any effect on the legal industry you expect, or on the law firms that are here? If the growth slows or even gets to the point where there is a recession how do you think that’ll affect what you do?
FINEGAN: We’ll play it as it comes.
I do think there’s going to be a slowdown. Whether or not it’s a relatively mild recession, we certainly hope it’s not what we saw in 2008 and 2009, which was really a difficult period for everybody, and no one would like to go through it again.
WISOR: Even though there weren’t that many law firms that went out of existence, there’s a generation of lawyers who probably didn’t enjoy that time because they were the first ones out because they were the most recently in. But law firms survived pretty well.
I’ve been practicing law, about 45 years almost, I think lawyers can ride it up and they can ride it down because when you’re going down, you’ve got to work out all the problems. So the bankruptcy lawyers and the workouts drive business in a downturn.
FINEGAN: We’re a hearty group.