FEATURE ARTICLE, NOVEMBER 2011

WORKING HARD FOR THE CITY
EDCs in Allen, McAllen and Amarillo are facilitating activity in the commercial real estate arena.
Compiled by John Nelson

Economic Development Corporations (EDCs) are charged with creating and facilitating business in their municipalities. As such, the organizations have intimate knowledge of commerical real estate trends in its area. Texas Real Estate Business magazine asked EDC employees in Allen, McAllen and Amarillo to discuss EDC involvement in its cities’ commercial real estate market.

Allen

The Allen Economic Development Corp. (AEDC) recently assisted Frontier Communications in locating to 84,000 square feet of office space at the intersection of U.S. 75 and Bethany Drive. The company will create approximately 700 positions, of which 300-400 will be call center positions and 300-400 will be back office positions. Many of these are new jobs to the Dallas area.

 The AEDC is also working with several office tenants that are planning to announce relocations to Allen shortly. These projects represent more than 700 new jobs to be located in Allen. Between the projects in the pipeline and the recently announced Frontier project, companies are committing to create approximately 1,400 jobs in Allen.

Additionally, AEDC is working on plans to develop the remaining 21 acres in Allen Central Park, a Class A office park located at the northwest corner of Bethany Drive and U.S. 75.

The AEDC identifies projects based on the Allen City Council Strategic Plan and the direction of the AEDC Board of Directors. Allen has identified target industries for recruitment, including information technology, pharmaceutical, medical device, telecommunications, data center and other related industries.

The community has also identified preferable development projects, which include Class A offices, mixed-use developments, high-tech manufacturing and medical office-related projects.

In reviewing projects, AEDC staff considers the Allen Land Use Plan, the financial statements of the developer and/or tenant, the economic impact of the project on the local community and the impact of the project on surrounding developments. 

When the AEDC provides financial assistance to support a project, the company must execute an Economic Development Agreement before it receives incentive funds. The agreement states the terms of the grant payment and often requires that the company meet certain investment, employment and operational benchmarks before incentive funds are expended. If grant funds are expended before the creation of jobs or investment, the agreements typically include clawback provisions, which require companies to repay the grant if they fail to meet the benchmarks.

The community has remained focused on economic development goals that maintain the integrity of our business parks and require the long-term commitment of city staff and elected officials alike. Public officials are cognizant of the Allen City Council’s strategic plan and make long term decisions that align with that plan.

— Daniel Bowman is the interim executive director of Allen Economic Development Corp.

McAllen

While maintaining its reputation as a manufacturing and international trade powerhouse, McAllen and its abundant resources have assisted 10 new companies in introducing operations into our market in 2011.

Manufacturers such as TS Tech, Regal Beloit, FibeRio Technology Corporation, Steelcase, and Bata Plastics, which are all new to the McAllen market, have finalized long-term contracts to initiate the manufacturing of goods such as car seats for Honda Automotive, HVAC components, nanofiber production equipment, office furniture, and launching new recycling operations. 

TS Tech North America, an automotive supplier, with its North American headquarters in the state of Ohio, saw the apparent value the McAllen market represents to its overall production that it is now setting up their TSTNA Trim Division Headquarters in their new second home, the McAllen MSA.

Regal Beloit, a manufacturer of HVAC components and metal stamping, was immediately convinced by the skilled labor force and infrastructure our area had to offer. It has redirected much of its operation to its newly purchased facility in McAllen.

FibeRio Technology Corp., a manufacturer of equipment to produce nanofibers, is also calling the city of McAllen home. The first technology spin-out from UTPA (and incubated in the UTPA Rapid Response Manufacturing Center in Edinburg) FibeRio has outgrown its current location’s capabilities and made a significant investment by transferring its operations to a heavy manufacturing facility in McAllen, making this its official global headquarters.

Steelcase, an office furniture manufacturer, set up its initial manufacturing investment in McAllen’s sister city, Reynosa, Tamaulipas, Mexico in 2010. As business continued to boom for Steelcase, like it has for numerous operations positioned in Reynosa and McAllen, it doubled in size in Reynosa in March of 2011. Now it has made another substantial growth in the city of McAllen by occupying more than 60,000 square feet for the logistics side.

Bata Plastics has also decided to add a location in McAllen to expand from its operation headquartered in Michigan. With its new proximity to the U.S./Mexico border, it will be able to service the large maquiladora industry McAllen has and produce high-quality recycled goods for its customers. 

More than 700 jobs are scheduled to be created in the industrial sector in the coming years. As McAllen maintains its focus in retaining and recruiting operations to the area, competitive advantages such as a reliable source of skilled labor, customized sets of incentives for all types of operations, cost-efficient transportation/logistic routes, competitive leases and one of the most affordable costs of living in the nation are available to all residents. Therefore, with a full quarter left for the year and holiday shopping around the corner, McAllen’s economy and employment opportunities continue to be optimistic and abundant.

— Carlos Telles is the marketing director of McAllen Economic Development Corp.

Amarillo

Global economic conditions are obviously a potential threat to any business venture. The Amarillo EDC is committed to minimizing the implications of the current economic climate by providing financing instruments, job creation grants, workforce training grants, tax abatements and interest rebates or below market rent to qualifying projects. 

Risk is inherent in any business venture and always assumed to be a factor in any project undertaken. We strive to measure and minimize risk by utilizing a rigorous vetting process. Our incentive packages are structured in order to reward businesses for jobs created and support a qualified business’ need for land, buildings, equipment, skilled labor and financing instruments.

At a minimum, projects are required to fall within our target industry mix or make good economic sense for our area. Our target industries include aviation/aerospace, business and financial services, diversified manufacturing, transportation/logistics and food technologies.

Identifying the right project requires due diligence on the part of the our staff, including thorough research on the company’s history, industry reputation, past financial performance and projected future performance.

Alstom Power, Inc., recently completed construction on a 115,000-square-foot facility in the Amarillo CenterPort Business Park. The company will hire about 40 employees in Amarillo before year end and is expected to create 275 jobs at full capacity. Alstom assembles nacelles, which are attached to wind turbine blades and house the generator, gearbox and controls systems.

Construction will begin soon at Amarillo CenterPort Business Park on a roadway expansion and various improvements which are funded in part by a grant from the Economic Development Administration. The regional EDA office has signed off on the plans and the City of Amarillo is in the process of reviewing them.

— Richard David is the president and CEO of the Amarillo EDC.

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