IKEA announcement an indicator of local economy strength

CENTENNIAL – In today's economy, "good" news is often studied under a relative lens. On Wednesday, IKEA announced its plans to open a store in Centennial. A sign some say that the Denver metro area's economy is strong, relatively speaking.

"Thing aren't so bad here because we haven't had a wholesale bust as other places have," said Professor Ron Rizzuto of the Daniels College of Business at the University of Denver.

Cheers came from the audience when IKEA made the announcement of the new store on Wednesday morning.

The 400,000-square-foot store would be located just to the west of Interstate 25 between Dry Creek and County Line Roads, not far from Park Meadows Mall.

According to the Metro Denver Economic Development Corporation's monthly economic summary, the metro area's mixture of energy and aerospace industries are helping the region's productivity.

In addition, retail sales in metro Denver increased more than 4 percent in the first half of the year. Another positive sign for the economy is the fact that the number of unsold homes on the metro market is getting smaller.

"In short, metro Denver's dynamic and innovative industry base continues to support the region's economy through challenging times," said Tom Clark, executive vice president of the Metro Denver EDC.

This certainly doesn't minimize the impact of increased costs in fuel. For families facing foreclosure and credit problems, talk of a relatively good economy may not mean much. Rizzuto says despite positive indicators, the local economy has seen better days.

"We're certainly not a robust economy," said Rizzuto.

Some local officials are hoping an IKEA store could be another jumpstart for the metro area economy.

Customers are known to travel from other states to reach IKEA. They also camp out for grand openings.

"We had to limit it to two days before the store opened," said Joseph Roth, IKEA's U.S. public affairs representative.

IKEA, the world's leading home furnishings retailer, operates more than 280 stores in 36 countries. Its catalogue is said to be the most widely-distributed free annual catalogue in the world.

Centennial Mayor Randy Pye says the city didn't have to offer IKEA any incentives to choose that site, although Pye does expect Centennial to reap the rewards of having such a popular store in its city.

"It'll be several million dollars in sales tax," he said, adding that the money could be used to improve transportation, open space and other functions within the city.

Pye expects the Centennial store to draw in shoppers from other states who could add to tourism revenue.

"They'll come and stay for a day or two. And they won't just shop IKEA but also other retail stores that we have," said Pye.

IKEA plans to hire 400 full-time and part-time workers for its Centennial store. The construction phase is expected to create an additional 500 jobs. IKEA officials say a slow economy doesn't hurt their business. Because of their lower-priced, self-assemble furniture, they believe many people on a budget are more attracted to their stores.

IKEA still needs to go through a lengthy process of approval, which will include public hearings and closing the deal on the land. It could be at least a year before ground is broken on the site. Typically, the construction of an IKEA store takes 18 months, according to company representatives. Once ground is broken, the store will begin accepting applications for jobs at its site in Centennial.

"It will be a big boom," Pye said, "for property taxes, sales taxes and jobs."

IKEA estimates it already has 75,000 customers in Colorado. The closest IKEA store is about 550 miles away in Draper, Utah. There is also one in Phoenix.