Texas Deal-Closing Funds Pro-Business Environment Fuel Unrivaled Prosperity

Texas Insider Report: AUSTIN Texas  Economic development incentives are of course central to a lot of big deals and the state of Texas continues to gain accolades for its pro-business environment thats sustained by its skilled workforce low taxes favorable regulatory environment and critical deal-closing funds that give it an advantage over competing states. The companies that choose to expand in Texas are often pretty vocal about their appreciation for the assistance they receive. The Texas Enterprise Fund in particular is widely regarded as one of the nations most impactful deal-closing programs. Created in 2003 its an option for companies thinking of locating or expanding in Texas that also have at least one viable location option in another state. The project must promise at least 75 new jobs (or 25 if its in a rural area) with pay thats at or above the local average. Through the years the fund has supported roughly 150 projects and awarded well over $600 million in grants that have helped create more than 84000 jobs. Thats just the start (or because its a deal-closing fund maybe its more accurate to call it the finish). Other popular programs include the Texas Enterprise Zone Program which offers refunds on the state sales and use tax to qualified projects and the Skills Development Fund which helps with workforce competitiveness.

Its certainly not every day that a state gets an opportunity to attract a $10 billion economic development investment and many states arent really prepared to respond to such a massive possibility. The proposed ExxonMobil-SABIC Gulf Coast Ventures deal however was right up Texas alley. Certainly Texas has plenty of experience in petrochemicals but it also has the wherewithal to make big deals happen and it did about a year ago.

The Gulf Coast Ventures project a joint venture between ExxonMobil and Saudi Arabia-based SABIC is to include the largest ethane cracker in the world. Its in the works near Corpus Christi and could be completed as early as 2021. It promises as many as 6000 construction jobs plus permanent work for 600 along with some 3500 indirect or induced jobs once its up and running. According to a company news release The project will create value not only for both of our companies but for the surrounding communities through the creation of jobs and economic growth" said John Verity who heads ExxonMobil Chemical Co. Making this kind of big thing happen requires piecing together countless puzzle pieces and facilitating the collaboration of many different parties. Its everything from navigating the environmental permitting process to negotiating tax breaks from local schools to arranging state incentives such as grants from the Texas Enterprise Fund and a whole lot more. Texas keeps moving the ball forward on these and numerous other fronts.

Wins of Many Kinds

Texas of course has a long history in petrochemicals and a famous reputation for taking on the world in a supersized way. Thats why its important to observe that the states economic development successes include wins of all sizes not just massive-scale projects such as the Gulf Coast Ventures deal. Even more important they go far beyond such sectors as energy.

Booming industries in the Lone Star State also include advanced manufacturing aerospace life sciences and information/computer technology to name a few.

For example the T" in Texas could just as easily stand for technology. On a recent trip by Gov. Greg Abbott to India he dropped by Wipros Electronic City facility in Bengaluru and took part in that companys announcement of a new Texas Technology Center in Plano. Wipro already has invested in Dallas and Houston in a big way with some 1400 people on the payroll. The Plano facility will be the companys U.S. cybersecurity center and advanced analytics hub with 150 jobs at first and more in the future. Wipro eventually plans to employ 2000 or more Texans in total. In making the latest announcement Abidali Z. Neemuchwala Wipro Limited CEO and executive director said the technology center is testament to the local talent pool and the robust support offered by the state to the technology sector." The steel manufacturing sector also was a topic of interest during that same India trip. The Governor and his team secured a memorandum of cooperation from JSW Group in Mumbai outlining an expansion of the companys JSW Steel (USA) Inc. operations in Baytown. JSW Steel suggested it could invest up to half a billion dollars there the first $150 million of which is earmarked for a retrofit of the existing steel plate mill. A $3.4 million Texas Enterprise Fund grant helped pave the way for the companys commitment and access to natural gas at extremely economical prices and the abundant availability of scrap steel in Texas make conditions very conducive for manufacturing through the electric arc furnace route" according to the companys Parth Jindal. Here are just a few more recent examples of the Lone Star States economic development successes:

• Golden State Foods Corp. Late last year this company announced plans for a new manufacturing and distribution facility serving its Liquid Products Division in the Texas community of Burleson. Golden State Foods counts more than 125000 restaurants and stores among its customers and the new $70 million Texas project will create some 150 jobs. The company was enthusiastic about the local communitys investment in its workforce and said it was pleased with the incentive support.
• Gartner Inc. This advisory firm knows technology and it knew that the Texas community of Irving would be an ideal place to expand. North Texas has one of the largest technology labor pools in the country and no one knows that better than Gartner which was looking for the right place to add 800 tech jobs. The company acknowledged that its $12 million investment decision also was influenced by a $3.9 million grant from the Texas Enterprise Fund.
• Ernst & Young The global professional services firm already has enjoyed success in San Antonio but plenty of places would have loved to land the firms newest client services delivery center. The deal worth about $10 million in capital and 600 new jobs went San Antonios way in November 2017. As Randy Cain the firms vice chair and Southwest Region managing partner observed at the time In reviewing other markets for this project San Antonios workforce availability in cyber tech and financial services plus the competitive cost of doing business aligned with the project needs."

Earning Recognition

With headlines such as those outlined above no wonder the state keeps finding itself at or near the top of business rankings pretty much year after year. Last year for example the state exported goods worth $264 billion to places all over the globe led by Mexico Canada China Brazil and Korea.

That made it Americas top exporter but that distinction is nothing new its been that way for 16 years in a row.

Meanwhile for 14 years in a row Chief Executive has named Texas the Best State for Business."

Forbes chimed in recently with new distinctions ranking Texas communities at the top of its Best Cities for Jobs 2018." The South as a whole is on the rise the magazine reported with the Dallas and Austin areas leading the way. The magazine reported that Dallas logged double-digit percentage job growth in just about every sector measured from information to construction energy finance and professional and business services." It summed up the Dallas metro area by calling it a great value proposition with affordable housing a favorable regulatory climate low taxes and an increasing array of cultural amenities beyond the Dallas Cowboys." Steve Stackhouse-Kaelble is Staff Editor for Area Development where he has written for nearly 20 years. His work has also appeared in numerous magazines newspapers & online publications as well as broadcast media. He has authored several books and worked extensively in Corporate & Internal Communications.