For Ted Hermesman III, finding a tenant in Tailwind provided him with a needed catalyst that he hopes will kick-start development of light manufacturing along La Posta Road.
La Posta Road, County Road 213, has been pegged for light manufacturing development for 25 years, but a lack of infrastructure, an increase in regulatory costs, and Durango’s high cost of living always seemed to kill past efforts, Hermesman said.
“The city of Durango has been trying for 25 years to get this area going, and now people are getting frustrated and selling,” Hermesman said.
Tailwind is experiencing rapid growth, including burgeoning sales through Amazon. The firm also plans to add new products to its supplement line, which now includes Endurance Fuel, the firm’s original product, and Rebuild Recovery, which was added in May 2018.
Rapid growth is not new for the firm, which started its first production facility out of a two-car garage in Dolores.
After selling 500,000 pounds of Endurance Fuel in 2018 and adding Rebuild Recovery, Tailwind had outgrown the two buildings in Bayfield it uses for production and warehousing.
“We were facing the prospect of having to move some lace else because of the lack of options, but that was something we really didn’t want to do,” said Jeff Vierling, who started Tailwind Nutrition with his wife in a two-car garage in Dolores in 2012.
The Vierlings had submitted failed bids for three other buildings during their search before stumbling across Hermesman’s building, which was built decades ago and only recently became available when Hermesman’s brother, Bill, who owns Northpoint Home Furnishings, no longer needed the warehouse space.
Hermesman said the combination of a 30-year-old building and the ability to move Tailwind in under 20-year-old, less burdensome development requirements allowed him and the maker of nutritional supplements to reach a deal that worked for everyone.
“It allowed us to be competitive in price where we could make this work,” Hermesman said. “I can tell you if we had do this today – to build from the ground up with current costs – we wouldn’t be having this conversations.”
As part of Tailwind’s search, Vierling said he discovered only 40 private buildings, excluding hotels and Mercy Regional Medical Center, in La Plata County that had 10,000 square feet or more space available. Of those 40 buildings, he said only 12 could be used for warehouse or light-industrial use.
Tailwind’s difficulty finding a new production and warehouse facility, Vierling said, illustrates the difficulty of attracting small, clean manufacturers to La Plata County.
“We had a two-year search, and then we still have significant construction work to do. Obviously, that’s not going to work for many other businesses. It’s not a repeatable process,” he said.
Light-industrial and warehouse space in Denver rents for about $8.25 per square foot, and its even cheaper in Salt Lake City and Albuquerque, Vierling said. In Bodo Industrial Park, he said rents are about $13.25 per square foot.
Janet Vierling said, “It seems in Durango, you can get to a certain size, but you reach a ceiling, and you’re forced to leave. But we want our community to be in a place where businesses can grow and stay.”
Laura Lewis Marchino, executive director of Region 9 Economic Development District of Southwest Colorado, said in an email that La Plata County lacks spaces for growing companies that need warehouse and light manufacturing space.
“In most communities, a company would just build a new building to meet their growing needs, but the combination of current building costs; high land costs; and there are no “industrial” parks available where the utilities and infrastructure are already in place, result in a bottom line they can’t afford,” she said in an email.
The shortage of available and affordable buildings for warehouse space or light manufacturing or land to develop, she said, makes moving to Farmington or Cortez attractive.
Roger Zalneraitis, former executive director of La Plata County Economic Development Alliance, said a survey done by the group in 2017 showed a 1% vacancy rate for light-industrial space in the county.
Establishing urban renewable authorities, URAs, Zalneraitis said, could be a way for La Plata County and Durango to lower building and development costs for light manufacturers.
A URA would allow tax revenue generated by a business park within a URA to remain within the URA to pay for such things as utility hookups, sidewalks and roads rather than going into a city or county’s broader general fund.
Attracting light manufacturing jobs are seen as economic development bonanzas.
Tailwind, Jeff Vierling noted, sells products in 23 different countries and has space in 800 retail outlets in the U.S. on top of sales from Amazon and its website. Tailwind has grown from two employees, Jeff and Jenny, to 21 employees, with plans to add more when the business moves to La Posta Road in November.
“What we’re doing brings dollars into Durango,” he said. “We’re creating great jobs. We’re committed to build our company here and to create local jobs. Profit is important, but if we considered only profits, we’d probably be elsewhere. It’s also gratifying to see our employees start families here and buy houses in a place they want to live.”