Business letters, June 10

Published June 10, 2006 at midnight

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Appropriate name for Albertsons takeover

I read with interest Wednesday's article about Cerberus Capital Management purchasing all the Colorado Albertsons and the subsequent closing of 13 stores. If I remember my Greek mythology, Cerberus was literally the dog from hell - a faithful servant of Hades, Lord of the Underworld. How appropriate is that?

Bill Alden

Golden

Real estate market in normal part of cycle

I read the article last Saturday, "Foreclosures up 32 percent in first quarter." It oversimplified the problem. One very big problem that has repeatedly plagued Denver is jobs, or lack of them, and how our booms and busts have determined our market.

Every real estate market - local, regional and national - goes through cycles. This results from the market pushing supply and demand curves to a natural state of equilibrium. Residential growth and purchasing will always follow commercial growth. Since we now have a more diverse job market, we should see a more moderate cycle in comparison to the last 2 1/2 decades.

Everyone wants to tell everybody what the problem is, and it is never their fault. Is the lending environment a factor in foreclosures? It is certainly part of it. Is the overbuilding along the Front Range part of the equation? You bet.

I often get into arguments with Realtors who blame the problem solely on lenders. But did they mind when they got their commissions for putting people into these homes? I don't think so. We have to consider a number of factors when engaging in public discourse over a subject that scares and intimidates people. Simply put, history repeats itself and the Denver real estate market is no different - we are just going through a normal part of the cycle.

Dan Narsete

Esox Investments

Denver

State not positioned for coming business boom

The recent articles regarding Sun Microsystems' layoffs and Samsonite's imminent departure contain a golden nugget of learning that I hope does not go unnoticed by our legislators, who have recently been patting themselves on the back about their last session. Since I arrived in Colorado in 1971, the business landscape has changed dramatically, with the loss of literally thousands of high salary jobs, from companies like Gates and Gardner-Denver. These have largely been replaced with nickel and dime jobs with few benefits. There has been an explosion of activity in the health, education and government sectors, but because they do not export, they are an overhead burden to society and zero sum in terms of wealth creation. While Colorado's gross state product is growing we are hollowing out our economy and failing to position ourselves for the coming boom in alternative energy, biotech and nano-technologies.

Unless there is a succession of new companies crossing the chasm from their startup in garages and mini-storages, the economy will age and eventually decline. Government must support new startups in everything from land- use policy to taxation and regulation. Presently, state and local government think they can micromanage us into success. Our failure to empower business to acquire affordable health insurance through association health plans is one glaring example.

Francis M. Miller

Parker

Severance tax would pay for mine conversion

I enjoyed Rob Reuteman's column last Saturday ("State digs deep to lure underground research lab") about Senate Bill 229, which will allocate $20 million of severance tax money to construct facilities for the National Science Foundation's underground laboratory west of Empire. But I disagree with the assertion that "money would come from state severance tax revenues, an imaginative but unlikely source of money for such an incentive."

As executive director of the Arapaho Project Inc., which started the ball rolling on an underground science laboratory at the Henderson mine over three years ago, I would call attention to language from the Colorado statute. Severance tax funds are to be used for "public purposes" and "to offset the impact created by nonrenewable resource development."

The Henderson mine is currently one of the 10 largest mines in the world. It is the second largest consumer of electricity in the state, and Clear Creek County derives nearly 20 percent of its revenue from the mine.

In all our discussions at the Capitol regarding using severance tax money for this purpose, everyone, Democrat and Republican alike, agreed this project was exactly what the fund was designed for - to convert mining property to other uses after closure. Clear Creek County and Colorado will need a replacement economy when Henderson closes.

The increased Henderson mine production and the price of molybdenum are major contributors to the huge increase in the severance tax fund. That ore will be exhausted in 20 years. If chosen by NSF, the national laboratory can even be developed while the mine maintains production. The severance tax money was by far the most logical choice to fund the laboratory surface facilities.

Steve Schultz

Denver

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