February 07, 2025 12:08 PM UTC

Closing Federal Center in Lakewood Would be Economic Disaster

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• by: Colorado Pols

President Trump and Prime Minister Elon Musk are working hard on lowering the price of eggs decimating the federal government, an effort that could soon hit home here in Colorado.

As John Aguilar reports for The Denver Post:

The Denver Federal Center, an institution for more than eight decades in the middle of Lakewood, faces an uncertain future as the new Trump administration begins the process of dramatically reducing the size of the federal workforce — and consolidating or closing the office space and buildings they inhabit.

The General Services Administration, which acts as the federal government’s real estate manager and broker, is under orders to begin terminating leases on all of the roughly 7,500 federal offices nationwide. The 623-acre Denver Federal Center campus — or parts of it — could well end up in the cost-cutting crosshairs, local officials and representatives fear.

The agency’s regional managers have been told the goal is to terminate as many as 300 federal office leases per day.

The Federal Center, home to roughly 28 federal agencies, is considered the largest single grouping of agencies outside Washington, D.C. About 6,200 employees are spread across 44 buildings on the campus, which is at the southwest corner of Kipling Street and U.S. 6. [Pols emphasis]

The Federal Center in Lakewood houses workers for various federal agencies, including the U.S. Department of the Interior; the Bureau of Reclamation; the Federal Emergency Management Agency; the U.S. Geological Survey; and the Bureau of Land Management (BLM). Back in 2019, then-Sen. Cory Gardner and the Trump administration were touting the economic benefits of moving the headquarters of the BLM to Grand Junction…and that was only an increase of about 27 jobs. Multiply that number by about 230 and then do the math backward, and you start to understand why shuttering the Federal Center is not a good idea.

Maybe you don’t even know a federal employee in this part of the Denver Metro area, which is home to somewhere in the neighborhood of 200,000 people. Why should you care if 6,200 people get the axe?

Because major job losses create a cascading effect that moves far beyond just the families immediately impacted. There are dozens of restaurants, hotels, and other small businesses located next to the Federal Center that are absolutely dependent on the 6,200 employees who work nearby (as well as the untold number of federal employees and contractors who travel to the area for business meetings, etc.). Colorado would not have built a light rail line to connect Denver and Jefferson County without this workforce density.

When thousands of people suddenly aren’t around to buy lunch or stay in a hotel room, you can guess what happens to those businesses: They die.

Back to the Post:

Lakewood Mayor Wendi Strom said the Federal Center “is critically important to the local and regional economy.”

“These dedicated public servants are also conducting important work that addresses the safety and welfare of the American people,” she said Thursday. “As with any industry contributing to our economy, any significant changes to the workforce or its facilities is of extreme concern.”

There aren’t many readily-available numbers for how the Lakewood and Colorado economy would be affected by massive federal job losses in the area, but we can make some educated guesses based on other recent studies.

In June 2023, Syneva Economics produced a report about the economic impact of the closure of the Canton Paper Mill in North Carolina; its conclusions are frightening:

The Mill’s closure, resulting in the direct loss of 900 jobs, will impact another 983 jobs in the county.

A total of 1,883 jobs in the county will be lost or put at-risk of being lost. For every job lost at the Mill, another 1.1 jobs in Haywood County will be put at-risk.

Of the impacted jobs, 606 will be from local suppliers which provide goods and services directly to the Mill. Another 377 local jobs will be impacted due to the expected reduction in spending by local households from workers at the Mill and its suppliers. [Pols emphasis]

The Syneva Economics report calculated a multiplier effect of 1.1 additional lost jobs for every one job that vanished because of the Mill’s closing. The 900 jobs lost from the Mill closing resulted in a 17% reduction ($803 million) in the county’s total annual, estimated economic output. It’s not hard to imagine what would happen here if you increased those job losses by a factor of seven.

Most of these jobs at the mill in North Carolina probably paid far less than what an average Federal Center employee earns; but even if we stick to the Syneva calculations, a 1.1 multiplier means an additional 6,820 jobs would disappear in the Lakewood area. At least 13,020 individual jobs would vanish if the Federal Center is shuttered in order to meet some random goal set by a guy (Musk) who was never elected and doesn’t even have a real job in the Trump administration. 

If the Federal Center is closed and those jobs are subsequently lost, Trump and Musk can move a decimal point in the federal budget. Neat! Maybe they figure that inflation will decline if nobody has the money to buy anything.

The White House talks about federal job cuts as though whacking a few positions here and there will be a great service to the country. This argument does not exist in a bubble, however. What happens next is considerably more important.