COVER STORY, APRIL 2007

THE ABCs OF EDCs
Texas economic development authorities discuss the secrets behind retaining and attracting businesses in their communities.
Dan Marcec

The state of Texas is perpetually growing, and economic development organizations across the board are continually searching for new industry and new companies to support their communities. Texas Real Estate Business recently interviewed executives from several of these organizations to gain a scope of their plans and strategies. Each of these cities has unique needs and specifications that fit its expansion model, but, in the end, their goal is the same: to engender development in their communities while maintaining a high quality of life for their residents.

El Paso

According to the “Labor Market Assessment of the Greater El Paso Region,” El Paso has the largest bilingual/bicultural labor force in the Western Hemisphere.

Situated on the United States/Mexico international border, the El Paso, Texas, region served by the El Paso Regional Economic Development Corporation (REDCo) covers communities in two countries and three states. Included in its coverage area are El Paso County, Texas (population 708,319); Ciudad Juarez, Mexico (population 1.6 million); and Otero and Dona Ana counties, New Mexico (combined population 251,500).

Some unique aspects of this particular region include the fact that it is home to the largest bilingual/bicultural labor force in the Western Hemisphere, according to the “Labor Market Assessment of the Greater El Paso Region,” compiled in May 2005 by The Wadley Donovan Group. In addition, each year more than 700 students from the University of Texas at El Paso and New Mexico State University graduate with engineering degrees, heavily impacting the influx of a skilled workforce, and as the Texas Tech University Health Sciences Center at El Paso expands, it is becoming the catalyst for upgrading medical care in the community. The school is the first 4-year medical school on the U.S./Mexico border, and it is projected to boost the local economy by $1.31 billion by the year 2013, according to its web site. Further, Ciudad Juarez boasts 20 percent of the Mexican maquiladora industry, bringing industrial development in that sector to the area.

REDCo specializes in consultation for businesses and industry interested in relocating or expanding within the Greater El Paso area, functioning as a private, non-profit corporation that serves its clients confidentially and without fee. The organization was incorporated in June 2004 by a group of local business leaders who were interested in drawing a distinction between business retention and expansion initiatives and business attraction. Therefore, as an avenue to focus solely on recruitment of new industry in El Paso and its surrounding communities, these local business people continue to make significant investments in marketing programs for REDCo’s strategy toward attracting appropriate industry.

“Because we are funded largely by the local private sector, we can draw on the extensive expertise of all of our regional communities,” says Bob Cook, president of REDCo. “Today, REDCo has a staff of seven professionals and receives annual funding that is four times greater than average funding levels that were dedicated to economic development activities prior to 2004.”

Cook explains that REDCo focuses primarily on recruiting high quality jobs and investment in three principal industries: the military, defense and homeland security sector; the automotive industry; and biomedical research. REDCo also hires major consultants to aid the implementation of recruitment endeavors, particularly in both the automotive and military/defense industries. In 2008, a consultant of the like responsible for the biomedical sector is expected to come on board as well. In addition, the organization is making efforts to attract high value added manufacturing, manufacturing suppliers, companies suited to water-related technologies, and white collar jobs. New York-based Development Counselors International also has been of assistance to REDCo in managing a national media relations campaign.

In the major industries across the board, El Paso is seeing significant activity. Along the lines of military and defense development, a large amount of growth is occurring in conjunction with the expansion of the area’s regional military complex, which comprises Fort Bliss and White Sands Missile Range (both Army-operated) and Holloman Air Force Base. Fort Bliss is expecting to expand its personnel by more than 22,000 (from 15,000 to 37,500) by 2013. Together, the conglomeration of these three military sites represents the largest Department of Defense-controlled air and ground space in the entire U.S. In fiscal year 2010, the U.S. Army’s 1st Armored Division headquarters will relocate from Germany to Fort Bliss, in addition to the decision to locate integrated field experimentation testing of the Army’s Future Combat Systems (FCS) testing at Fort Bliss will constitute further components of this expansion. By the end of 2007, FCS already will have drawn more than 1,300 personnel to the area in order to commence training and testing of these new technologies. Finally, Boeing Corporation will create 200 new jobs in El Paso by 2008 in the fields of technical and engineering support for FCS experimentation.

With respect to white-collar employment, more than 11,500 workers in more than 20 white collar operations such as contact centers, technical support operations, and back office companies are active in El Paso. In fact, just in the past year, the following companies created significant new employment opportunities: ACS created 600 jobs; Boeing FCS (as mentioned above) added 200 workers; ADP, Inc. expanded employment by 1,028 people; Alltel created 300 jobs; Florida P&L/GC Services expanded by 150 positions; Omega apparel added 500 jobs; and Bronco Communications created 300 positions. “These companies draw from a large pool of bilingual workers, many of whom possess business degrees from colleges and universities in the region,” says Cook.

Perpetuating growth in these areas is the vast amount of land available for development in different areas of the region. The Public Service Board (PSB) is sponsoring both the Northeast Master Plan, which includes 3,900 total developable acres, and the Northwest Master Plan, which features 1,850 total developable acres. In addition, the Plexxar Capital Northwest El Paso Plan adds 430 total developable acres to the mix.

Elsewhere, the El Paso International Airport is in the process of developing a master plan for 3,000 acres in close proximity to Fort Bliss. Components of this development will include a new Tom Fazio-designed resort golf course set to open this April; a science and technology park designed for high-end office users; as well as high-tech manufacturing areas, primarily suggested for military and defense companies that support FCS and the 1st Armored Division. 

Richland Hills

The Boulevard 26 Corridor effort, a project which will bring retail and office space to Midway Business Park in Richland Hills, Texas, is currently in Phase I of construction.

The city of Richland Hills, Texas (population 8,382), located northeast of Fort Worth, was established in September 1950. It incorporated the Richland Hills Development Corporation — a 4B economic development entity — in July 1996 in order to diversify the city’s economy, as a result of losing a Sam’s Club building, which previously had generated a significant portion of its revenues, to an adjacent municipality.

“Richland Hills isn’t willing to accept the status quo, and it has especially focused attention on the area in and around the Trinity Railway Express Richland Hills Station,” says Marty Wieder, director of the municipal services division at GSBS as well as economic development consultant to the city of Richland Hills. “Representatives of both the Richland Hills Development Corporation and GSBS have aggressively sought grants to fund redevelopment in the area, and the efforts have paid off.”

For example, The North Central Texas Council of Governments (NCTCOG) recently agreed to fund 80 percent of a $447,000 project through Partnership 3, Local Air Quality Program, which is placing sidewalks from the city’s southern neighborhoods to the Richland Hills Station of the Trinity Railway Express commuter rail line. NCTCOG expects to procure an engineering firm to prepare plans for the project in 2008, with construction to commence in 2009. This grant is the second award presented in order to engender development in and around the station, following $100,000 in sustainable development funds set aside in spring 2006 for a master plan and study for the creation of a Tax Increment Reinvestment Zone on nearby properties.

GSBS is an entity based in Salt Lake City, Utah, that offers clients a comprehensive approach toward aiding communities and economic rebound and renewal realization. “GSBS began economic development consulting in October 2001, with Richland Hills as our first client,” says Wieder. “We believe a city’s potential is about much more than just demographics and incentives; it’s all about vision.” Richland Hills is one of five North Texas municipalities to which GSBS provides services. In 2005, the Richland Hills City Council engaged GSBS to assist in the preparation of an Economic Redevelopment Plan for seven sectors of the municipality, which now serves as the foundation for Richland Hills’ future economic development endeavors.

According to Wieder, with two quality corporate parks providing employment and “under the radar” retail associated with some manufacturers and service providers that also charge sales taxes, the city has a sound base in those sectors. Further, Richland Hills is attempting to attract retail and restaurant businesses due to the increase in sales tax revenues they would provide, in addition to hospitality developments.

“The companies that attract the most jobs in Richland Hills are routinely the manufacturers that locate in either the Midway Business park or Richland Industrial Park,” says Wieder. Over the past year, the city and GSBS have been involved with various companies, which include: Advanced Chemicals Logistics, which relocated to 7201 Burns in the Richland Industrial Park; Business Flooring Systems, which overtook Advanced Chemical’s vacated space in the Midway Business Park; and The Landscape Partners, which took space at the former SourceCorp buildings near the intersection of Handley-Ederville Road and Baker Boulevard, relocating from a neighboring community.

New developments are rising along the fringes of Midway Business Park, including the 27,000-square-foot Pool Water Products Facility located on the park’s northern edge; Pool Water Products is a California-based pool chemical and cleaning product company that purchased land on the site in 2005. In 2006, Dan Boykin attained a permit to develop a 17,395-square-foot building located at 3100 Handley-Ederville Road for CGS Signs. Construction on that project is complete, which cost $991,818 for development of office, warehouse and sign productions space. FastSigns joined CGS as the first occupants of the building.

Furthermore, in January 2006, Richland Hills’ City Council approved a Special Use Permit for Austin-based developer Roger A. Duck in order to convert several properties at Midway into a mixed-use complex. The breadth of the project features retail and office components including a retail center fronting Boulevard 26, a coffee retailer on the hard corner, and incubator-type offices fronting Willman. The project is called the Boulevard 26 Corridor effort, and cost for the renovation — which is in Phase I of construction currently — is $2 million.

Several other major developments are underway, covering a variety of uses across multiple commercial sectors. In the retail arena, contractors for Baker Boulevard Properties have constructed Phase I of Faith Creek Plaza, and recently broke ground on Baker Boulevard Plaza Phase II, which encompasses 18,000 square feet. 7100 Grapevine Investments LLC has purchased the 12,216-square-foot office property with plans to remodel its exterior, add landscaping and upgrade infrastructure. The renovated “white box” suites are now available for lease. Finally, developer Luis Pardo has acquired the 14,813-square-foot building at 7560 Glenview Drive, situated almost in the shadow of North Hills Hospital. According to broker Rob Rutherford, Pardo plans to convert the property into a medical office facility by way of a major renovation and addition. Construction on the project will begin this year, and several large suites will be available for lease.

Port Arthur

The city of Port Arthur, Texas, is situated approximately 90 miles from Houston and only 10 miles from the interstate. Located on the Gulf of Mexico close to various channels in and out, Port Arthur boasts a highly trained, highly skilled workforce, chiefly based in the industrial sector. The population is approximately 60,000.

The Port Arthur Economic Development Corporation began in 1996 as a 4A economic development agency, and its main goal is to bring new business and industry to Port Arthur in order to engender job creation. “We mainly deal with manufacturing, distribution and warehousing, and as an organization we focus chiefly on industrial properties over other commercial sectors,” says Floyd Batiste, chief executive officer of the Port Arthur EDC, who has been with the organization since November of 2005.

The city boasts a business park situated on approximately 340 acres, complete with infrastructure in place for companies seeking to locate in the area. “Port Arthur Business Park is one of the best kept secrets in Southeast Texas,” says Batiste. “We market our available space within the development and attend trade shows in order to market this land and other property.”

 Within the park, which currently has two of four buildings in operation — the other two that have been planned are coming on line in the second quarter of this year — the EDC offers incentives that are funded by a five-cent on every dollar tax supported by the city, and it provides those incentives based on the number of jobs the companies will create in addition to their overall total investment. Four companies have located in the park during Batiste’s tenure, including a producer of rubber byproduct; a metal recycler; and a company that focuses on separating oil from water.

However, the organization’s focus is not limited to one area, but the goal is to bring positive industrial growth to the whole city, beginning with businesses looking to expand. “We deal with a lot of business outside the park; we have a manufacturer of church pews and a biodiesel plant we assist as well, both of which are located elsewhere in the city,” says Batiste. “We are continually contacting businesses and taking calls from interested parties in order to help them into any property we may have available.”


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