‘Once in a lifetime’: Hayden gets $5.2 million to diversify economy as plant closure looms

Federal grant funds infrastructure for industrial park that hopes to retain, expand local businesses

Plumes of water vapor rise from Hayden Station in 2017. On Jan. 4, Xcel Energy announced it would close the plant, Unit 1 in 2027 and Unit 2 in 2028.
Matt Stensland/Steamboat Pilot & Today archive

The town of Hayden will receive $5.2 million in federal grant funding for a regional industrial park project that hopes to lesson impacts as the Hayden Station shutters by the end of the decade.

The U.S. Department of Commerce announced Tuesday, Aug. 9, that Hayden and neighboring Craig — another community in the shadow of a soon-to-close coal-fired power plant — would receive a total of $8.5 million that was directed toward coal communities in the American Rescue Plan.

The award to Hayden is enough to bring the planned industrial park near the Yampa Valley Regional Airport to full funding, said town manager Mathew Mendisco.

“This business park, we believe, is going to be almost like the change agent for the valley,” Mendisco said. “It’s going to give the opportunity for a lot of local businesses to expand where they may not have been able to.”

The industrial park project started as one facet of a proposal to get grant money through the Build Back Better Regional Challenge in a similar vein as a project in Sheridan, Wyoming, that helped diversify its economy, which was similarly based on extraction and tourism industries.

The regional proposal ultimately wasn’t chosen, but Mendisco kept the project alive and shifted to pursue funding from the U.S. Economic Development Administration.

“We’ve been working really hard for this,” Mendisco said. “It’s going to centrally locate a lot of businesses, which will be a benefit for the entire valley.”

The grant will fund infrastructure like roads, water and sewer on the property officially annexed into the town last week. The idea is that the parcels could be ready-made for a business to buy or lease and then build what their business would need.

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The goal of the industrial park is to offer local companies looking to grow their operation an option to stay in the Yampa Valley. While attracting a new company isn’t a bad thing, Mendisco said the project is really centered around retaining and expanding businesses that are already here.

“As we are transitioning away from coal in the valley, it’s a step in the right direction for the community of Hayden to expand economically,” said Mayor Zach Wuestewald. “As we lose a huge economic driver in the future, we all got to find ways to weather the storm economically.”

Wuestewald emphasized that there is still a lot of work to do before Hayden has a certain future as it prepares for the closing of the Hayden Station — the Xcel Energy owned power plant that is slated to close by the end of 2028.

Entities like the school, fire and library district in Hayden currently get between 55% and 65% of their funding from property taxes paid by the power plant.

“It’s going to be a big deal when we lose the tax revenue that we’re going to lose,” Wuestewald said. “There is no answer, but having somewhat of a blueprint is reassuring.”

The money comes from the EDA’s American Rescue Plan Economic Adjustment Assistance program, which offered $500 million in these grants to communities across the country.

Mendisco referred to it as a “once in a lifetime opportunity,” because this particular program allows for a less significant match in funding locally. Had Hayden needed to match half the $5.2 million grant, Mendisco said the project likely wouldn’t have been possible for the town of 2,000 residents.

The federal government’s $5.2 million is being matched by more than $700,000 in local and state funding and is estimated to produce almost 80 jobs and about $12 million in private investment.

“When I’ve visited communities in Northwest Colorado over the years, I’ve heard concerns about what coal mine and power plant closures will mean for their main streets, schools, and way of life,” said U.S Sen. Michael Bennet, a Democrat, in a statement about the funding.

“These federal grants will help coal communities like Craig and Hayden attract new businesses, create new jobs, and diversify their local economies so they can thrive,” he continued.

Mendisco said the next step in the project is to officially purchase the land in question using money the town already had from the Colorado Office of Just Transition. That office was formed to help communities losing significant parts of their economy as Colorado set some of the most aggressive emission reduction goals in the country.

The plan is to have design work completed by the end of December so the project could be put out for bid sometime in January, he said.

“This project was meant for business retention and expansion locally,” Mendisco said. “To create more jobs here sustainably and we can invest in the future and the businesses that are already here.”

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