Aurora’s 1st Class A-act stars German engineers in regional aerotropolis

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AURORA | Prairie dogs, meet German engineers for a historic event in Aurora.

Kärcher, a German producer of commercial cleaning devices, announced it will be moving its North American headquarters to a commercial development site in northeast Aurora next year, the Aurora Economic Development Council announced last week.

It will be the first time Aurora will build long-sought-after “class A” level office space.

The nearly 84-year-old German manufacturing juggernaut is slated to build a 380,000-square-foot facility over 23 acres in the Porteos development just south of Denver International Airport. The deal will result in a $50-million investment from Kärcher and bring about 350 jobs to the city, according to the AEDC.

Local officials have lauded the deal as a potential bellwether for the city to attract international firms to an area that for decades was little more than wind-swept prairie.

“This is an all-around win for the city of Aurora,” Mayor Bob LeGare said in a statement. “We’re welcoming a world-class primary employer that is creating hundreds of jobs and investing tens of millions of dollars into our community in addition to bringing thousands of business visitors to Aurora each year to positively impact our economy.”

The facility will centralize a bevy of services for the cleaning device firm, housing a training complex, manufacturing operations and some 75,000-square-feet of Class A office space, according to Yuriy Gorlov, vice president of the AEDC.

The deal checked all the boxes for the city’s economic recruitment arm, Gorlov said.

“It’s a headquarters, it hits our initiative to go international, it’s in the “aerotropolis,” and … we have really been working hard to move into some class A office space,” Gorlov said. “We like that it hit all of our marks.”

The deal, which officials have been working on since the beginning of this year, comes with several undisclosed financial incentives for Kärcher, Gorlov said. The AEDC often offers firms tax rebates after certain stipulations have been met over time, such as job retention and capital investment.

Kärcher is also set to receive breaks on capital gains taxes thanks to a new “opportunity zone” designation from the governor’s office and U.S. Department of the Treasury, according to the Porteos website. The designation, awarded this year, could net the firm up to a 36-percent bump in returns, according to Porteos.

Gorlov said the AEDC is actively using the new zone as a lure for potential investors in the city.

“(The opportunity zone) ultimately helps businesses bottom lines because they can move into an opportunity zone and avoid some capital gains and liability,” he said. “In the big scheme of things it helps a lot, and I think it’ll attract a lot of new investors to the area from across the nation, whether they’re from Wall Street or elsewhere.”

There are a trio of other designated opportunity zones in Aurora: the Fitzsimons campus, a large lot directly across East Alameda Avenue from the Aurora Municipal Center, and a noncontiguous strip along the south side of East Colfax Avenue from roughly Interstate 225 to the east, to the Denver border to the west.

Aside from Kärcher, a pair of airport parking firms, Walmart and a speculative warehouse investor from Connecticut have a presence at Porteos, Gorlov said. Representatives from the development site did not respond to requests for comment by press deadline.

The current headquarters for Kärcher North America — technically a subsidiary of the mothership in Germany — is on Airport Way in East Denver, just a few linear miles from the new development.

In a statement, officials from the company cited the new locale’s proximity to the region’s largest airport and booming commercial development in the area as the driving forces behind their decision to relocate to Adams County.

“We’re excited to be a leader in the development of this new frontier in Aurora and look forward to the surrounding development that is to come in the area,” Jason Mangone, Kärcher CFO, said in a statement.

Officials from the AEDC said the Kärcher deal is proof Aurora is capable of recruiting firms that have traditionally sought to lay roots in larger metropolises.

“It goes a long way to say our city can attract the types of businesses just as well as any other big city,” Gorlov said. “It’s just a fact that a company of such caliber typically would say, ‘let’s go to Denver or Seattle or Chicago, or all of those HQ 2 type cities.’ It’s really cool to say, ‘yup, Aurora can attract the same caliber as the big cities.’”

Kärcher employs about 12,300 people in 67 countries and netted about 2.5 billion euros in revenue last year, according to data provided by the AEDC.

“This deal shows once again that Aurora is becoming a strong, global business destination and is ripe for Class A office space development.” Wendy Mitchell, president and CEO of the AEDC said in a statement.

The new headquarters is expected to open in September 2019.