Springs shifts gears/ Various engines keep regional economy chugging

PART 10 OF A 24-PART SERIES introducing the rich heritage of our region. Find stories and additional materials online at www.gazette.com/wellsprings.

Colorado Springs reinvents itself every 20 years or so.

That's the pattern historian Matt Mayberry of the Colorado Springs Pioneers Museum sees in the economic history of the Pikes Peak region.

The mainstays of our economy in a nutshell: First there was Colorado City, which flourished briefly as a supply town for prospectors during the Pikes Peak or Bust gold rush of 1859. Then the railroads reached Denver and Colorado Springs, launching a period of town building. Next came fame and fortunes made in mining; then the area became a center for the treatment of tuberculosis. After a somewhat stagnant period, the arrival of the military revitalized the area and the high-tech industry followed on its heels.

Town building: 1870-1890

Without the railroads, there wouldn't have been a Colorado Springs. Until the railroads were built, the Pikes Peak region was a remote destination reached by an arduous wagon trip.

After the Kansas Pacific Railroad was completed to Denver in August 1870, Gen. William Jackson Palmer organized the Denver & Rio Grande Railroad Co., to build a line south. Construction started in March 1871 and the railroad reached the site of Colorado Springs on Oct. 21.

The town's first business - the Colorado Springs Co. - was formed in spring 1871 to market property in what was at first called the Fountain Colony. Residential lots were offered for $50 each and business property sold for $100. The company also marketed land in Manitou.

Palmer expected to make at least $540,000 from the sale of the town sites, more than enough to pay for surveying and advertising and for improvements such as streets, wells, irrigation ditches, trees and parks.

Initial sales in August 1871 were slow, but they soon picked up, thanks to promotions in the eastern United States and England that trumpeted the area's beauty and healthful climate. By January 1872, lots were selling briskly and more than 300 people were living here.

The Panic of 1873 was just a bump in the road for Colorado Springs. The town grew at the rate of 500 people a year, and by 1880 its population exceeded 4,000. Shops providing food, clothing and other necessities lined Tejon Street and Cascade Avenue, Pikes Peak Avenue and Huerfano Street (later Colorado Avenue).

While Palmer was building Colorado Springs, his partner, Dr. William Bell, was building Manitou. From the minute the Manitou House opened in August 1872, tourists and health-seekers began arriving to drink the healing spring waters and clamber over the surrounding hills. In the summer of 1874, 40 or 50 people a day were hiking on the Bear Creek Trail, the first route to the summit of Pikes Peak, developed by the Colorado Springs Co.

During the next decade, the Pikes Peak region chugged toward a future as a destination for the well-to-do and firmed up its worldwide reputation as a resort and tourist mecca. Colorado Springs' population of permanent residents steadily grew to more than 11,000 by 1890. Overseas marketing efforts brought in so many people from the British isles that the town became known as "Little London."

Gold fever: 1890-1910

Everything changed with the discovery of gold in Cripple Creek. The mines enriched several locals, including Winfield Scott Stratton, who had been making $3 a day as a carpenter. The new gold rush brought in others, such as Spencer Penrose and Charles L. Tutt, who would prospect, prosper and use their wealth to reshape the Pikes Peak region.

The treasure chest that was Cripple Creek sprang open in 1891, yielding $60,000 worth of gold. That was just the beginning. Production reached $18 million in 1899 and topped $20 million in 1900. Eighty percent of that wealth flowed into Colorado Springs, where the once-poor mine owners built elegant homes for themselves and their families. The offices of 420 mining companies opened along Tejon Street.

The mines spawned more business: coal, to fire the reduction mills that refined the ore; more railroads, to bring in supplies and workers and to haul ore from the mining camps; and three stock exchanges, one of which, the Colorado Springs Mining Stock Exchange, was the biggest in the world.

According to historian Marshall Sprague, bank deposits increased ninefold during the decade. The banks and the town easily weathered the Panic of 1893, though that national financial crisis put a dent in some personal fortunes - including Palmer's. He had to move temporarily from his Glen Eyrie mansion into a house on North Cascade Avenue to cut expenses.

The TB industry: 1910-1940

The Cripple Creek boom began to play out around 1910 and labor and material shortages during World War I nearly flattened the gold business. But by then, Colorado Springs' renown as a healing place had spurred another industry: the treatment of tuberculosis.

In the 1920s, 17 sanatoriums were treating thousands of patients and significantly impacting the area's economy. Two of the biggest, the Union Printer's Home and the Modern Woodmen of America Sanatorium, together represented an investment of almost $3 million. Operations at Modern Woodmen ran as high as $250,000 a year.

The significance of the sanatoriums can't be measured in dollars alone, however. Superior facilities such as Cragmor, the largest private sanatorium in the world in 1927, attracted some influential patients who remained in the Pikes Peak region: H. Chase Stone, who began his career in stocks and bonds while he recuperated and later was president of First National Bank; James J. Hagerman, who extended the Colorado Midland railroad to Aspen; Thomas Mac-Laren, the architect who designed numerous local landmarks; historian Marshall Sprague; A.E. Carlton, the "Mining King" of Cripple Creek; and Artus Van Briggle, who founded the pottery company that bears his name.

Agriculture also played a role in the area's economy in the first quarter of the 20th century. According to a 1954 economic survey, the number of farms and the number of acres under cultivation in El Paso and Teller counties doubled between 1900 and 1925. Ranching was the mainstay of the agricultural sector; local farmers also grew corn, wheat, oats, barley, alfalfa, sour cherries and apples.

Things got better toward the end of the decade, but overall, the period from 1920 to 1940 was flatter than old champagne. The sanatoriums closed in the 1940s when drugs were discovered to cure TB. In that 20-year period, the population increased by only about 6,000 people.

It's as though the area was waiting for something to happen, Mayberry says.

In the 1940s, it did.

Military marches in: 1940-1960

On Jan. 7, 1942, with World War II raging overseas, Colorado Springs learned it would be getting a new Army post. Camp Carson was won through a lengthy campaign by a group of civic leaders. Over the next two decades, the military presence grew with the addition of Peterson Field, Ent Air Force Base, the North American Aerospace Defense Command (NORAD) and, in 1954, the U.S. Air Force Academy.

The military had, and continues to have, an impressive effect on everything from the retail trade and the construction industry to employment.

According to a 1968 study, about 13,000 workers were added to the county's civilian employment rolls from 1947 to 1965; nearly 65 percent of these were traced to the increase in military forces. In 1962, Fort Carson's payroll was $4.9 million per month, and it was estimated that the military was responsible for 62 percent of the area's economic output.

The Springs' population nearly doubled, from 36,789 in 1940 to 70,194 in 1960. In El Paso County, the population grew by 105,000 people from 1940 to 1965. The military presence accounted for some of this, but its numbers varied: 40,000 in 1944; 3,000 in 1948; 13,000 to 32,000 in the late 1950s and early 1960s. Growth in services, the wholesale and retail trades and construction, and especially in manufacturing, accounted for the rest of the increase.

Light industry grew significantly in the 1940s and '50s, expanding more rapidly than any other sector. In 1939, there were 55 manufacturing enterprises in El Paso County. In 1953, the number had grown to 105. Products made in the region included aircraft parts, serums and vaccines for animals, quilts, rustic furniture, fertilizers, floral display equipment, square-dance dresses, and men's and boy's neckwear.

Tourism, which had been growing rapidly in the prewar years, slacked off in the early 1940s, then picked up again. In 1953, it was estimated that 675,000 tourists visited the Pikes Peak region during the summer. For the year, the total topped 1 million.

Tech town: 1960-1980

The pace of growth - and change - speeded up even more in the 1960s, '70s and '80s. Colorado Springs' population soared from around 70,000 in 1960 to almost 215,000 in 1980. The growth was so rapid, the City Council feared there wouldn't be enough natural gas to heat homes in the winter of 1973, so it declared a 45-day halt on new hookups. That action threw the city into a mini-recession that lasted into 1974; construction came to a standstill and nearly 500 people were laid off.

The opening of The Citadel mall in 1972, and later the Chapel Hills Mall, dealt a blow to downtown, drawing off retail trade and causing vacancy rates to soar.

One major department store, May D&F (now Foley's) opened a store at The Citadel and eventually closed its downtown location. Two other downtown institutions, Hibbard's and Fashion Bar, hung on through the '80s and '90s but finally closed, too. Downtown also lost two big sporting goods stores and morphed into an area of small specialty shops.

The first seed of the high-tech industry was sown in 1959 with the arrival of Kaman Nuclear. Hewlett-Packard came in 1962 and opened its electronics facility on Garden of the Gods Road in 1964. Other early arrivals were NCR Corp., Honeywell Inc. and Ampex. They were joined in the '70s and '80s by firms such as Digital, Cray Computer Corp. and Inmos Corp. and the region earned the designation "Silicon Mountain.

It was boom time for the computer industry: In 1980, HP alone employed 2,300 people and had a $35 million payroll. In the 1990s, software development firms sprang up.

Diversity: 1980-present

The high-tech industry and the overall economy have had some rocky times in the last 20 years. A recession that bottomed in 1980 caused several companies to close, leaving hundreds of people unemployed. The Strategic Defense Initiative, or Star Wars, never materialized, and the military canceled plans for a shuttle control center after the Challenger space shuttle exploded in 1986. That led to many plant closures and downsizings.

In the late 1980s, the nationwide crisis in the savings-and-loan industry plunged the local economy into another recession, creating an unfortunate identity for Colorado Springs as "the foreclosure capital" of the nation.

Business and growth surged again in the early '90s. The military remained a mainstay of the economy, though its overall impact declined. By 1998, military-related employment accounted for 37 percent of the area's "primary" jobs - those that bring money in, says economist Dave Bamberger. Still, during the decade, the region shivered every time a new round of base closings was rumored.

Development efforts focused on diversifying the economy to soften the effect of any decrease in the military presence.

That's one reason why the area has become a mecca for more than 50 religious and other nonprofit groups, from the giants Focus on the Family and The Navigators to smaller organizations with fewer than a dozen employees. Together they have brought more than 2,400 new jobs and $33 million in payrolls to the region.

The area never has stopped attracting visitors, whose numbers today are counted in the millions.

Perhaps the best measure of our economy's overall strength is that in the last two decades, El Paso County's population has surged: from 309,424 in 1980 to 516,929 in 2000, an increase of more than 67 percent.

THROUGH THE YEARS

1871 Colorado Springs Co. formed to sell lots in the "Fountain Colony."

1873 Philadelphia investment bank collapses, launching a financial panic and depression.

1893 Gold reserves in the U.S. Treasury fall below $90 million, touching off a financial panic.

1900 Production of gold at Cripple Creek tops $20 million.

1920 Seventeen tuberculosis sanatoriums are operating in the Pikes Peak region.

1929 Stock market crashes, ushering in the Great Depression.

1942 Headquarters building is completed at Camp Carson on Jan. 31.

1954 Secretary of the Air Force chooses Colorado Springs for the site of the U.S. Air Force Academy on June 14. The academy moves to its present location in 1958.

1959 Kaman Nuclear arrives in Colorado Springs, ushering in the high-tech industry.

PREVIOUS WEEKS' WELLSPRINGS

MAY 8: The First People: The Utes

MAY 15: Pathfinders and Pioneers

MAY 22: The Fifty-Niners

MAY 29: Colorado Springs: Built on sunshine and gold

JUNE 5: Spa in the Rockies

JUNE 12: Old Westside

JUNE 19: The Broadmoor

JUNE 26: A Mountain Forged

JULY 3: The Northwest - "Chasing the Cure"

SOURCES

Alexander Film and Alexander Aircraft, vertical files, Starsmore Center for Local History, Colorado Springs Pioneers Museum

David Bamberger, David Bamberger & Associates, interview, June 28, 2001

Kristine M. Bixler, "The Golden Years: A History of the Golden Cycle Mill," paper, April 16, 1987, Tutt Library, Special Collections, Colorado College

George R. Buckman, "Colorado Springs as a Mining Stock Market," Mountain Sunshine, Summer 1899

Business Enterprises, vertical file, Starsmore Center for Local History, Colorado Springs Pioneers Museum

Bob Campbell, "When the Springs was aviation king and film advertising top dog," The Cheyenne Edition, Feb. 7, 1997

L.J. Crampton et al., "An Economic Survey of the Pikes Peak Region," prepared for the Colorado Springs Chamber of Commerce by the Bureau of Business Research, School of Business, University of Colorado, Boulder, 1954

Leland Feitz, "The Antlers: A Quick History" (Colorado Springs: Little London Press, 2000)

Michelle P. Fulcher, "Gold again worth gamble," Gazette Telegraph, Feb. 22, 1981

"Indicators of Region's Growth," Gazette Telegraph, Jan. 29, 1961

William S. Jackson, Letter on banking in Colorado Springs, Tutt Library, Special Collections, Colorado College (available online at www.coloradocollege.edu/library/specialcollec tions/centurychest/ Appdx.html)

Maj. James M.J. Karns, "An Intertemporal Analysis of the Defense Impact upon a Local Community: Case Study of El Paso County, Colorado," January 1968, Tutt Library, Special Collections, Colorado College

"Major Companies Maintain Liaison Here With NORAD," Gazette Telegraph, Jan. 29, 1961

Ormes, Manly D., and Eleanor R. Ormes, The Book of Colorado Springs (Colorado Springs: The Dentan Printing Co., 1933)

Matt Mayberry, public programs coordinator, Colorado Springs Pioneers Museum, interview, June 27, 2001

"Pikes Peak Region Among Foremost Health Resorts Of Country," Gazette Telegraph, March 27, 1921

Jane Robison, "'Silicon Mountain' mushrooms in Springs," Gazette Telegraph, Feb. 22, 1981

Steven Saint, "CC&V mine digs deep, tries not to hit bottom," The Gazette, Aug. 14, 2000

Marshall Sprague, "Money Mountain: The Story of Cripple Creek Gold" (Lincoln, Neb., and London: University of Nebraska Press, 1979)

Marshall Sprague, "Newport in the Rockies" (Athens, Ohio: Swallow Press/Ohio University Press, fourth ed. 1987)

Copyright 2001
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