To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Caste Rock Economic Development Council
Title
Resolution Approving the Economic Assistance Agreement Between the Town of Castle Rock and AlloSource
Body
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Executive Summary
Founded in 1994 and headquartered in Centennial, Colorado, AlloSource is one of the nation’s largest nonprofit providers of human allograft tissue. Working alongside Organ Procurement Organizations across the country, the organization processes and distributes high-quality human tissue used globally in orthopedic, spine, sports medicine, trauma, and dental surgeries. To meet surging nationwide demand and ensure business continuity, AlloSource is planning to expand its footprint with a second advanced tissue-processing campus at 1585 South Perry Street in Castle Rock, Colorado.
The proposed expansion represents a significant long-term investment in the community, beginning with a Phase 1 capital commitment exceeding $5.5 million. This initial phase will establish specialized manufacturing infrastructure, including ISO Class 5 cleanrooms, validated HVAC systems, process utilities, and specialized processing equipment. Designed to scale sequentially alongside business growth, the campus is planned to ultimately house 33 cleanroom suites. Roughly 75 percent of the resulting workforce will consist of new local hires, supported temporarily during startup by a small team from Centennial to facilitate training and operational transfer.
To secure Castle Rock as the selection for this expansion over competing regional sites, AlloSource requested formal assistance through the Castle Rock Economic Development Program. The Economic Development Council (EDC) recommends approving a performance-based incentive package capped at a maximum of $300,000. This structure includes a job creation incentive tracking up to 100 new primary positions over five years, as well as a 50 percent permit fee rebate issued within 30 days of receiving a Certificate of Occupancy. AlloSource also intends to request a matching incentive from the County and has submitted a similar request through Douglas County EDC.
Approving this recommendation directly advances Castle Rock’s strategic goal of becoming a self-sufficient community with a robust primary job base. Bringing an established life sciences manufacturer into the town creates technical career opportunities for local residents while enhancing the municipal tax base. Furthermore, offering a competitive incentive package demonstrates a proactive business climate that ensures high-value businesses remain within Castle Rock.
Applicant (Introduction)
Over the past three decades, AlloSource has established itself as a leader in life sciences and advanced tissue manufacturing. In response to growing demand for tissue allografts, the organization is exploring opportunities to expand its manufacturing capacity beyond its primary Centennial campus, identifying Castle Rock, Colorado, as a potential site for future investment.
Clinical Applications and Mission
AlloSource's tissue grafts are widely used by surgeons worldwide to restore mobility and relieve pain across a variety of medical specialties, including:
• Orthopedics & Spine Surgery
• Sports Medicine
• Trauma Care
• Dental Surgery
As a mission-driven nonprofit, the organization reinvests its resources into advancing tissue science, manufacturing technology, research, and quality systems to maximize the impact of tissue donations.
Quality and Regulatory Compliance
AlloSource operates under strict quality control standards to ensure the safety and efficacy of its allograft products. Its operations comply with:
• U.S. Food and Drug Administration (FDA) regulations
• Current Good Manufacturing Practices (cGMP)
• Association for Advancing Tissue and Biologics (AATB) standards
Maintaining these standards relies on specialized manufacturing environments, sophisticated quality control systems, and a highly trained workforce.
Project
Proposed Castle Rock Campus Expansion
AlloSource has identified 1585 South Perry Street in Castle Rock, Colorado, as a potential location for a second advanced tissue processing campus. Designed to complement existing operations in Centennial, this facility would expand the organization's manufacturing footprint to accommodate long-term growth and ensure business continuity rather than relocate existing operations.
Capital Investment and Facility Specs
Phase 1 of the project is expected to involve an initial capital investment exceeding $5.5 million. Key infrastructure and equipment for the first phase include:
• ISO Class 5 cleanroom processing suites
• Validated HVAC and environmental control systems
• Specialized tissue processing equipment and manufacturing utilities
• Full facility commissioning, qualification, and startup operations
The long-term strategy includes three sequential phases, ultimately scaling the site to a total of 33 cleanrooms and up to 300 employees. Each phase is structured to maximize the utilization of existing infrastructure before deploying additional capital, aligning capacity with market demand.
Workforce and Local Economic Impact
Approximately 75% of the projected roles at the Castle Rock facility are expected to be new local hires. A small team of experienced staff from the Centennial headquarters will temporarily support startup operations, training, and knowledge transfer during the initial launch phase.
Incentive Request
AlloSource has formally requested assistance through the Castle Rock Economic Development Program. Following the Town’s Economic Development policies their request includes the following:
1. A 50% permit fees rebate
2. Job creation incentive for up to 100 employees, based at the new facility in Castle Rock, tracked over 5 years.
Incentive Structure Recommendation (EDC)
The EDC supports the use of incentives to ensure that AlloSource chooses Castle Rock for their expansion. The project aligns several initiatives associated with the Town’s Economic Development polices. It supports our focus to attract and grow primary employment within Castle Rocks target industries and increases the number of job opportunities for Castle Rock residents to work within their community.
The EDC recommends the following incentive structure.
1. A job creation incentive for up to 100 new positions in Castle Rock, tracked over 5 years, following the Town’s pay for performance Economic Development Program
2. 50% permit rebate to be issued within thirty days after the CO has been issued by the Town
Total incentive will not to exceed $300,000.
**AlloSource also plans to request a matching incentive from Douglas County.
Policy Support
It is our position that AlloSource’s incentive request warrants the support of the economic development incentive fund.
Economic Vitality is a critical factor in ensuring Castle Rock’s long-term success and in achieving its Vision of being a Self-Sufficient Community; a Community in which Residents can Live, Work, Play and Purchase the Goods and Services they need; and Create a Tax Base adequate to support provision of Core Town Services.
With increasing regional competition, it is important for Castle Rock to create and maintain an exceptional Business Climate. A key component is the creation of an Expanded Business and Development Incentive Program.
Supporting AlloSource’s request
1. Ensures that Castle Rock secures the proposed AlloSource expansion.
2. Supports the growth of 100 new positions that qualify under the Town’s Targeted Industry category, as these newly created positions provide additional employment opportunities for Castle Rock residents and provide the necessary multiplier effect to help grow the Town’s economy.
A Primary Employer is one in which a minimum of 50% of Goods and Services are sold outside of Douglas County. Creation of new primary jobs to grow the economic base and provide employment opportunities for Castle Rock residents is a core priority.
Job Creation Incentives Requirements
• Documentation of Primary Employment - minimum of 50% of Goods and Service outside of Douglas County
• Create Full Time employment with a minimum annual salary of $40,000 ($30,000 for Manufacturing Positions)
• Positions must be based in Castle Rock
• Provide current employee list identifying full time, part time, and contract positions
• Document current new job creation based on company size - Job Minimums:
Small Business (20 or fewer employees): 2
Medium Business (21 to 49 employees): 5
Large Business (50 or more employees): 10
• Maintain new positions for 24 months
• Incentivized positions must be filled within the first six months of contract date in order to receive partial payment on the first anniversary of the agreement
• Be licensed and own/lease Commercial/Industrial property in the Town of Castle Rock;
• Engage in a business activity consistent with the goals and vision of the Town of Castle Rock.
Incentives:
Average Douglas County wage is $80,003 [Douglas County, 2025] FTE = 38 Hours per Week (Rate may be updated annually by the Town Manager and EDC CEO without Town Council action or amendment to this program.)
• Incentive of $1,000 per job created.
o Additional Incentive of $500 per job created which is above Douglas County average wage.
o Additional Incentive of $500 per job if job is created and held by a Castle Rock resident.
o Additional Incentive of $1,000 per job if job meets the definition of our Target Industry.
• Incentive distribution: The contract will be valid from the anniversary of the signing of the contract/agreement with ½ of the incentive paid at the conclusion of year 1 (for all jobs created within the first 6 months of the executed contract) and the remainder paid at the conclusion of year 2.
o Contracts will expire in 45 days if not signed by all parties
Attachments
Attachment A - AlloSource Incentive Request
Attachment B - AlloSource Application
Attachment C - Mock Permit and Fee (estimate)
Attachment D - Castle Rock’s Business and Development Incentive Program
Attachment E - Memo to the County Commissioners