With relocations and expansions of State Farm Insurance, Liberty Mutual, Toyota, Amazon, Borden’s, Mary Kay, General Motors and Mission Foods, North Texas can easily be called an “economic powerhouse.” And some of the Metroplex’s large suburban communities lead the way.
How do they do it? A recent Enlightened Speakers’ Series event brought together three economic development professionals from Richardson, Irving and Frisco to share their insights.
It’s DFW Airport
Among the variety of reasons for the economic surge in North Texas, the Dallas/Fort Worth International Airport — and especially its overseas destinations — won plaudits from all three speakers. “We now have direct flights to Beijing, Shanghai and Hong Kong,” said Bill Sproull, CEO of Richardson’s Chamber of Commerce and Economic Development
Partnership. “There are now three carriers going to those locations every week.” In all, 56 overseas flights take off from DFW weekly.
Richardson now has 62 international companies, Sproull said. In fact, the Legislature calls Richardson the International Business Capital of North Texas. It’s home to the U.S. headquarters of both Korea’s Samsung Mobile and China’s ZTE. Japan’s Fujitsu has a manufacturing plant there, as do companies from the U.K., Germany and France.
The main competitor for North Texas is Atlanta, which also has a large airport with lots of overseas flights. So it’s important that Texas keep promoting itself internationally. One disadvantage is that, although the Dallas Metroplex is projected to become the third largest metropolitan area in the United States by 2020, it does not rank among the world’s top 20 cities, or as a place where foreign-born business leaders would like to live. “Once they understand what’s happening in the DFW area, and visit the market, they become very interested,” said Joey Grisham, of the Irving/Las Colinas Chamber.
It’s DART & the Highways
The transportation network on the ground is another advantage for the area. “We have Highway 75, the George Bush Tollway to the north, I-635 to the south and DART rail,” Sproull said. “We actually have more light rail stations [in Richardson] than any other suburb in the Metroplex.”
Getting people around easily was part of the plan behind CityLine — a new development in Richardson at the corner of U.S. 75 and George Bush Turnpike. It will house State Farm’s new headquarters, which will employ 8,000 people, and will have room for 4,000 more. Apartments, a Whole Foods and restaurants will be part of the mix. “It’s almost a city within a city,” Sproull said.
DART access is also driving the Irving Music Factory, Grisham said. Built next to the convention center, this entertainment destination will have 100,000 square feet of office space and a Westin Hotel. It also adds something Irving has long needed. “The one missing piece for Irving was the entertainment piece,” Grisham said. “We’ve been a 9 to 5 city, and we’ll now have after 5 p.m. entertainment and a concert venue that will hold 8,000 people.”
The former Texas Stadium site is being turned into an office project through a partnership with a group from San Diego. It, too, will have a DART station.
It’s the Workforce
It’s not just the big internationals that are looking for desirable spaces. Grisham said a lot of companies from mid-size markets such as Tulsa, Memphis and St. Louis are relocating to the area, because they can’t find the labor pool they need elsewhere. The labor pool in North Texas is an attractive one. According to Sproull, it’s particularly growing among 25- to 34-year-olds, who are attracted to mixed-use projects like the Irving Music Factory. Besides CityLine, Richardson has built two other so-called TODs —transportation oriented developments. “When you’re attracting Millennials, folks want to know how to keep them,” Grisham said. “These companies want to be in an environment with amenities like multi-family developments, restaurants, and retail locations.” Not only do TODs offer the amenities, but as the name implies, they have easy access to mass transit.
Besides transportation, other infrastructure is crucial to make sure the area keeps growing. There is probably no better example than Frisco, the booming Collin County suburb north of Dallas. Its population is a stunning 153,000, but is expected to grow to 375,000, said Jim Gandy of the Frisco Economic Development Corporation.
That many people need schools for their children. The Frisco ISD has 53,000 students, and is projected to grow to 85,000. It already has eight high schools, with two more under construction and one on the drawing board, and it’s purchasing land for a twelfth. “It’s interesting to say the majority of people who are going to live in our city are not even there yet,” Gandy said.
In any Texas city, there are two revenue streams, said Gandy: property taxes and sales taxes. Frisco has been aggressive about increasing its sales tax revenue. The large Stonebriar shopping mall along Texas 121 was built in a tax increment reinvestment zone Frisco created in 1997, and the zone now has a tax base of $1.2 billion. Incremental tax revenue from that zone is used by the city of Frisco, Collin County, the school system and Collin College for public improvements within the zone. Sales tax revenue has grown from $7.5 million to $72 million in the last 15 years as Stonebriar has become a destination, drawing shoppers from Oklahoma, Arkansas and Louisiana.
It’s Public-Private Partnerships
Frisco has adopted sports as part of its economy, Gandy said. It’s involved in public-private partnerships with the Dallas Cowboys, the Dallas Stars hockey team and the Frisco Roughriders baseball team. The Cowboys are developing Ford Center, which will include a 12,000 seat multi-use event center, stadium and practice fields. It will have the first indoor high school stadium in Texas. A 441,000-square-foot office building will house the corporate headquarters of the Cowboys, but since they’ll take up only about 90,000 square feet, Gandy says there’s a lot of space available for lease.
The “public” in that public-private partnership is the money from the Frisco Economic Development Corporation and the school district. Each kicked in $30 million. “They are getting a $255 million indoor stadium for their $30 million investment,” Gandy said. The EDC’s investment in the Cowboys headquarters office building is already worth $94 million, he added, and the project isn’t even finished yet. “The return on the public-private partnership on this project is tremendous,” he said.
That partnership spurred development along what is called the “Five Billion Dollar Mile,” a stretch along the North Dallas Tollway between Warren Parkway and Lebanon Road. It will feature Frisco Station, a multi-family development by Hillwood Properties, and more than 5 million square feet of office space; The Gate, a 41-acre project put together by a group from Dubai, with a boutique hotel, two high rise condo towers, three multi-family residential units and four office buildings; and Wade Park, 175 acres of high-rise office buildings, residential units, retail and restaurants.
Frisco, Gandy said, is a “boom town.”
The three cities do not work to attract heavy industry. Sproull said Texas Instruments has a semiconductor plant in Richardson, and Gandy said Frisco’s industries are also high tech, rather than blue collar. Irving is an exception. “One of the great myths about Irving is that we are all white collar, and that’s not true,” Grisham said. “We actually have more industrial space than office space.” Most of those are distribution facilities located near the airport.
There are some challenges for all of these economic powerhouses. Costs are edging up. “We’re beginning to see wage creep,” Sproull said, “and one has to wonder how long you can maintain that momentum.” He said he’s hearing stories of a lack of workers with higher-end skill sets, and a need to import skilled labor from elsewhere. Baby Boomers have those skills, but they’re getting ready to retire.
“Who is going to replace them?” Sproull asked. “We have to be looking at 10 to 20 years down the line and be ready for their full retirement with the right workforce — and we have to continue to grow what’s needed by investing in their education now.”
And although infrastructure was one of the area’s strengths, it’s also being pushed to the limit as highway congestion is bad and getting worse. Sproull said when Proposition 7 passed, it was supposed to mean more money for the state highway fund. But that was dependent on oil priced at $60 a barrel. Now, there’s no money for new construction. “We barely have the money to maintain what we have,” he said. “The best traffic you’ll experience is what you just experienced today.”
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