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by M. Ray Perryman, President, The Perryman Group
With great tenacity, economic developers, legislators, business
leaders and communities in the state of Texas are likewise charting new territory.
Leading the competition, they continue to position Texas at the forefront of new
business activity.
Their efforts are coming to fruition -- job creation figures
are reaching new dimensions. Growth is occurring across the state in a variety of
communities, not concentrated solely in the major metropolitan areas. And the "Texas-friendly"
business climate continues to become ever more appealing.
State lawmakers propelled the creation of a pro-business
environment with legislation filed in the 75th session. Several bills were filed
relating to the controversial issue of tax abatements. A bill calling for a constitutional
amendment banning all tax abatements failed, as did a measure banning school involvement
in tax abatements and tax increment financing.
Reforms were passed, however, mandating changes to the structure of the Texas
Department of Commerce (TDOC), the state's leading economic development agency. The
final legislation narrows the focus of the TDOC, changing the agency's name to the
Texas Department of Economic Development. Along with the name change, the agency
will undergo significant reengineering, including the privatization of some programs.
All enticements and sales tools aside, Texas has inherent characteristics that
make it a universal contender for new and expanding businesses. Features such as
a work force of more than 9 million persons, state-of-the-art transportation and
infrastructure, competitive ways of doing business, and a generally favorable tax
and regulatory environment make "selling" the Lone Star State every negotiator's
dream.
Let's look at business activity in the state, taking a journey through the 266,800
square miles of space that truly make Texas a whole other universe.
Starting off in North Texas, our first stop is Dallas.
Northwest Corp. chose Dallas to house a 500-employee check-processing center,
purchasing a 285,000 square foot building near Love Field Airport to house the operation.
The facility opened in July and is one of four regional processing operations for
the bank nationwide.
TU Electric continues to support economic development in its service area. Summary
counts as of June indicate a banner year is shaping up. A total of 27 companies located
in the service area, creating 3,225 new jobs, occupying 2,507,000 square feet of
space.
Existing Texas companies also expanded in the service area during this time, adding
over 6,400 jobs and nearly 3,000,000 square feet of space. Services, high-tech and
telecommunications industries are well represented among those making relocation
and expansion headlines.
In the Irving area, Las Colinas continues to shine. New projects under review
include several multi-tenant office buildings that are expected to cover more than
two million square feet of retail space. Two upscale retail centers are also under
consideration; their construction could total more than 700,000 square feet.
GTE Telephone Operations is moving from Lewisville to the city of Irving in September,
and plans expansions in their customer service, Internet, and long-distance divisions.
A total of 1,000 new jobs are expected by the end of 1997. Also, GTE will relocate
its corporate headquarters, currently based in Stamford, Conn., to Dallas, bringing
600 new jobs to the area.
The Metrocrest cities
Moving farther into the "Metrocrest" cities north of the Dallas/Fort
Worth area, we find Lewisville, Farmers Branch, Plano, and McKinney booming.
The city of Lewisville announced plans for L.D. Brinkman to move its national
headquarters and distribution center to the area. The facility will cover 370,000
square feet and is expected to create 300 jobs.
Farmers Branch is experiencing record occupancy levels in the city's 7,500,000
square feet of available space. Office space is currently about 96 percent occupied,
compared to 78 percent in 1989. Recent announcements in the area include the $80
million expansion of Quebecor Printing Inc., housing 135,000 square feet of space
and creating 100 new jobs.
IBM also chose Farmers Branch to locate one of its North American Call Centers.
The company consolidated 28 call centers into three major locations -- Atlanta, Toronto,
and Farmers Branch. IBM currently employs 600 people in the area and could expand
employment by another 300 workers within three years.
Legacy, the 2,665-acre, master-planned business community in Plano, continues
to attract new tenants. Dr. Pepper/7-Up Inc. is building a 260,000 square foot headquarters
in the development. The office will open mid-1998 and is expected to house 700-800
employees. Fina Inc. is also building its 25-acre, 300,000 square foot facility headquarters
in Legacy.
The City of McKinney continues to expand a pro-business environment. With the
creation of an Enterprise Zone that covers five business parks, the Triple Freeport
"Goods-in-Transit" Exemption, and a half-cent sales tax, McKinney is courting
big business.
Making headlines this year, Blockbuster Entertainment announced it would build
an 810,000 square foot facility to house its data center, office and distribution
functions. The $35 million facility is expected to be completed in September 1997.
The entertainment giant plans to hire 800 new employees.
Fort Worth area
On our way to Fort Worth, we'll pass through the City of Arlington.
Lear Seating Corp. also purchased nine acres for a new facility in the city. Lear,
an auto parts supplier for GM, has completed a 100,000 square foot warehouse, creating
180 new jobs. Mackie Automotive has also built a 230,000 square foot facility in
the area. Located on ten acres of property, the manufacturing firm may hire as many
as 250 people.
Arriving in Fort Worth, we find a frenzy of activity at the Alliance Airport Development.
Seems like every time you turn around, these folks are announcing yet another new
tenant of the master-planned development.
Kraft Foods announced its intent to open a 56-acre distribution center in the
Westport section of Alliance. The 650,000 square foot, two complex campus will be
operated for Kraft by URS Logistics Inc. SC Johnson Wax is leasing 192,000 square
feet at Alliance and hiring 35 people. Paper product manufacturer/ distributor James
River Corp. is also leasing space at Alliance -- 375,000 square feet of it, in fact.
North Texas
Turning northwest, we find the City of Wichita Falls with notable business activity.
Most recently, Blue Cross and Blue Shield of Texas announced plans to open a customer
service facility in the city. The healthcare insurer will renovate 77,000 square
feet of existing space to house their health insurance claims center, hiring approximately
200 employees.
To the east, the City of Sherman is proud to announce that MEMC Southwest opened
their new $300 million silicon wafer factory in April. The high-tech facility is
set to employ over 1,500.
Traveling east toward Tyler, we'll make a stop at Sulfur Springs. The area will
soon be home to Clayton Homes Inc., formerly of Knoxville, Tenn. The billion dollar
corporation will build a 115,000 square foot facility in the city. With a total investment
of approximately $5.5 million, the manufactured home producer will hire 200 new employees.
Nearby, in Longview, the city's Economic Development Commission is attracting
business. Since its inception in 1992, 4,000 new jobs have been created and $911
million in investments have been announced. Most recently, Strategic Telecommunications
announced it would open a call center and hire 60-80 new employees. Nutrina Laboratories,
a Canadian manufacturer of herbal products, will open its first U.S. division in
the city, hiring 35 employees.
In other East Texas news, Target Stores Inc., is building an enormous $36 million
distribution center in neighboring Lindale (the town where I grew up, or at least
had birthdays). The center will sit on a 150-acre site on I-20 and will cover 1.6
million square feet.
Before we arrive in Houston, we'll take a pass through Beaumont, where A&A
Fertilizer Ltd., has announced plans for a new ammonium thiosulfate plant. The new
facility will be built in the Neches Industrial Park.
The heart of Texas
Heading east, we'll glance at events in Aggie Land.
Texas A&M University in College Station will soon dedicate the Bush Presidential
Library and Museum. The entire complex will cover 90 acres and include classrooms
for the George Bush School of Government and Public Service, the Presidential Conference
Center, and the Presidential Library and Museum.
Also in the area, Beach Mold & Tool Inc., is opening a $10 million, 90,000
square foot plastic injection molding plant this fall. The company is expected to
employ 250-300 workers from the Bryan-College Station area.
On the way to the coast in Brazoria County, we find the city of Pearland expanding.
Promoting a pro-business environment, Pearland has created a great incentive package.
Recently the city has added a Freeport Exemption to its other enticements, including
tax abatements, equipment relocation allowances, infrastructure improvements, and
"Fast Track" permitting. Kemlon Products, a manufacturer of electrical
connectors, recently held a groundbreaking ceremony in Pearland, beginning construction
on a 30-acre complex. The company will build a 72,000 square foot manufacturing facility,
adding 180 initial staff members.
Greater Houston area
The Houston area has made news with a downtown renovation project. The $30 million
private endeavor, called the Cotswold Project, includes plans to create a riverwalk-type
park in the north end of downtown Houston's old business district.
The manufacturing industry in Houston continues to expand. Long Reach Holdings
Inc., is expanding its Houston-based division. The manufacturer designs and markets
hydraulic equipment and plans to add 58 new employees to staff its facility. Allen-Stuart
Equipment Co. is investing $1.5 million in a new fabrication facility. The company
manufactures skid mounted industrial blowers and compressors for chemical waste water
and refining plants.
The Gulf Coast
Following the coastline south, the city of Victoria is attracting new business.
Compressor Systems Inc. plans to build a new facility in the area. The gas compression
and equipment company will add approximately 15 pipe fitting/welding jobs to the
area economy.
The coastal City of Corpus Christi is renovating the town's entry with construction
on a new federal courthouse, a $5 million park and landscaping. Additionally, the
local airport is undergoing a $12 million renovation, improving the existing food
court, baggage claim area and main lobby.
Moving all the way down the coast to the furthest southern Texas border, we find
the Brownsville-Harlingen-San Benito metro area, where Allison Manufacturing Co.
opened a new apparel manufacturing plant. The company plans to hire more than 250
employees by the end of the year to staff the plant.
McAllen's strategic border location gives companies proximity to new markets.
MEDC has assisted 44 companies locating on the U.S. side of the border since NAFTA
took effect, creating over 1,700 new jobs. Additionally, 57 companies have located
on the Mexican side of the border, creating over 13,300 new jobs.
Most recent developments in McAllen include the University of Texas-Pan American's
construction of a 21,500 square foot building to house the International Trade and
Technology Building. The $3.1 million project includes a $2.25 million grant from
the Economic Development Administration of the U.S. Department of Commerce. Houston
Die Casting Co. opened its new facility in bordering Reynosa, Mexico, in June. The
aluminum and zinc die casting manufacturer's facility is housed in a 68,000 square
foot facility, located on a 12-acre parcel of land.
The Alamo City
Traveling north, we'll find the burgeoning city of San Antonio.
Big headlines were made this year with the acquisition of Pacific Telesis Group
by San Antonio-based SBC Communications. The purchase created the second-largest
telecommunications company in the nation, and the third largest Texas-based company.
SBC announced in July that it would move 800 to 1,200 management positions to the
downtown San Antonio area.
Another notable merger in the area, Diamond Shamrock Inc. and Ultramar Corp.,
created Ultramar Diamond Shamrock. The company is expected to move in late September
into the new 200,000 square foot corporate headquarters located on 148 acres in Leon
Creek.
In manufacturing news in the city, BABN Technologies Corp., a Montreal, Canada-based
manufacturer of lottery tickets, will build a plant in San Antonio. The company will
bring 400 jobs to the area and the facility will hold a 315 foot-long printing press.
Along the border
Continuing up the Texas/Mexico border, we find the city of Laredo where NBC Bank
recently announced plans to construct a new branch office. The site would be the
bank's second location in Webb County and is expected to open in late 1997 or early
1998. Moving up from San Antonio along the Rio Grande, we find the border town of
El Paso.
The city was recently in the news, announcing in February that MCI would open
a call center in the area, adding up to 1,500 new jobs. MCI cited the city's infrastructure
and local university system as alluring factors. The multilingual capabilities of
the work force were equally appealing.
The Texas-New Mexico Power Co. is offering rural Texas towns a helping hand, giving
them the tools they need to support their economic development goals.
The power company is reinvesting in the communities it serves by making a consultant
available to city leaders and chambers of commerce. The consultant acts as a liaison
to help leaders define economic development goals, specify areas of responsibility,
reduce duplication of efforts, and identify funding sources to support plans.
West Texas
Heading back east on I-20, we find the City of Odessa, the new home of the Odessa
Jackalopes -- the town's new Western Professional Hockey League team. Renovations
are underway on the team's ice rink in the Ector County Coliseum.
Most recent headlines in the city announced West Telemarketing Corp.'s plans to
open an outbound telemarketing center. The company will lease 15,000 square feet
in a major office building in the area, bringing 27 new jobs. Rexene Corp. broke
ground on a new polyethylene plant in April. The manufacturer of low-density polyethylene
will begin production at the plant in late 1998 and will add 70 new jobs to the Odessa
economy.
In Midland, the local airport is receiving a facelift. The $34.5 million project
will create a 155,000 square foot passenger terminal expected to be completed in
two years.
Up the road a short way, the Panhandle city of Lubbock announced Market Lubbock
Inc., the town's new economic development organization. The city has attracted several
firms, offering incentives to locate in the area.
IGF Insurance Co. plans to occupy 6,000 square feet of existing space to house
its southwestern regional office. The company will eventually employ as many as 23
new workers. West TeleServices Direct will also call Lubbock home. The telemarketing
service center will occupy 25,000 square feet of renovated space in the former Mall
of America. The call center staff will make outbound direct sales presentation calls
as well as customer service calls for clients.
Amarillo offered Atmos Energy, a natural gas provider headquartered in Dallas,
a $1.2 million grant, luring the company to locate a customer service center in the
area. The facility will offer service to customers across twelve states, hiring more
than 140 employees.
Veering back toward the heart of Texas, we find the City of Abilene, where carbon
fiber producer Zolteck Corp. is in the final stages of getting production going in
its $56 million, 100,000 square foot facility. Additionally, Blue Cross and Blue
Shield of Texas Inc., opened a new customer service center in the area. The health
insurance provider will move into the old Texas Instruments building, occupying 80,000
square feet of space.
The I-35 Corridor
Completing the loop, the I-35 corridor cities south of the Metroplex are making
headlines with continued economic growth. The City of Hillsboro will be the new home
of Lamraft, L.P., a rafter manufacturing, wood processing and laminating company.
Heading south down I-35, we reach the heart-of-Texas city of Waco.
The local M&M Mars plant, where Skittles, Starburst, Snickers and Milky Way
Light candies are made, is expanding its facility to accommodate growth. West TeleServices,
a Nebraska-based telemarketing firm, located their fifth call center in Waco, creating
500 new jobs.
On the way into our capital city of Austin, we pass through the booming city of
Round Rock, where high-tech industries continue to dominate headlines.
Dell Computer Corp. is expanding its campus by 300,000 square feet this year.
The computer giant will add two three-story buildings to the area. Over the past
two years, Dell has hired about 3,800 people to staff its facility and anticipates
hiring around 3,000 more people this year for sales and marketing, manufacturing
and other corporate operations.
DuPont Photomasks is also planning an expansion at its 20-acre Round Rock campus.
The photomask manufacturer is planning the addition of 27,000 square feet of space
with the potential for up to 55,000 square feet of expansion space for future growth.
The facility will house the company's worldwide headquarters.
Our final stop is the City of Austin, where 3M recently announced plans for an
expansion of its manufacturing plant. The project is expected to add 60,000 square
feet to the current location. Additionally, 3M plans a 55,000 square foot customer
service center at the current research and development site that is expected to be
complete in the fall of 1998.
As Texans continue to lead the pack, determined to reach new dimensions -- you'll
hear the dauntless Texas spirit in the incessant beating noise of combined voices
saying . . . "We're good to go!"
Dr. M. Ray Perryman is President and Chief Executive Officer of Perryman Consultants
Inc., and Business Economist-in-Residence at the Edwin L. Cox School of Business
at Southern Methodist University. His firm has offices in Waco, Dallas, Houstin,
Austin and Washington, D.C.
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