The new topology of Texas

texas_plateThe Texas Enterprise Fund is changing the map of Texas.

Take Paris, for example. Paris, Texas, that is. James Skinner Baking Co. (from Omaha, NE) is going to opening a new factory in Paris, along with 393 jobs and $25 million in capital investment. The state is giving the company $1.8 million through the Texas Enterprise Fund (TEF) to close the deal.

The company gets to take over the 390,000 sq. ft. multi-million dollar abandoned Sara Lee bakery plant on over 89 acres in the small town two hours northeast of Dallas. The plant was just sitting there vacant, waiting to be filled. So in a way, this was meant to be.

“Food and consumer goods manufacturing and packaging is Paris, Texas,” said Gov. Perry.

The Texas Enterprise Fund (TEF) web site boasts that it’s “the largest ‘deal-closing’ fund of its kind in the nation. The fund is a cash grant used as a financial incentive tool for projects that offer significant projected job creation and capital investment and where a single Texas site is competing with another viable out-of-state option.”

Just to be clear, James Skinner Baking Co. is still concocting their exquisite home-baked delights in its hometown of Omaha; it’ll just be packaging them for mass-production in good old Paris, Texas.

Kevin Lynch, the famous MIT urban design theorist, recognized the defining traits of a city were what we think of when we reconstruct that city in our imagination and memory. For Paris, France, it might be the Eiffel Tower, Notre Dame, or the Left Bank. For Paris, Texas, it’s packing TV dinners.

If Texas Parisians grow despondent at their fate, however, they might do well to look on the bright side: at least they’re not Rusk. Rusk, Texas was identified by Robert Perkinson in his book Texas Tough as the prison capital of the world. And rightly so.

Gov. Rick Perry at groundbreaking for Bell Helicopter’s future global HQ.

Gov. Rick Perry at groundbreaking for Bell Helicopter’s future global HQ.

Dallas/Fort Worth (DFW) may have the history and legend of cattle, but it’s aerospace and aviation that’s bringing the bucks these days with company HQs for Bell Helicopter, American Airlines, Southwest Airlines, and American Eurocopter, among others.

Houston–no surprise here–has most of the oil and chemical enterprises. The Americas headquarters for BP is here, as are the headquarters for Lyondellbasell, Phillips 66, ExonMobile Chemical, ChevronPhillips Chemical Co., Westlake Chemical, and DOW. Of course the University of Texas M.D. Anderson Cancer Center and U.S. Oncology (“Advancing cancer care in America) are also there. If you’ve never thought of oil refining and chemicals with cancer as a lucrative combination, rest assured, Houston has.

While the big city business hubs are building from a long tradition and their growth may be predictable, the changes to small cities like Paris are much more interesting, as one big move from a TEF-invested company could redefine them.

Gainsville, Texas, thanks to $800,000 awarded through the TEF to Allied Production Solutions, LP, has steel and fiberglass tank manufacturing facilities.

Corsicana, Texas, broke ground on a new 150,000 sq. ft. manufacturing facility for Pactiv LLC.

Meanwhile, in Victoria, Texas, Caterpillar Inc.’s new hydraulic excavator manufacturing plant, which has been expanded thanks to a $1.175 million investment from the Texas Enterprise Fund (TEF) in 2010. Seguin, Texas, got in on the action too. Caterpillar is relocating its engine assembly, paint and testing operations, creating over 1,700 new jobs.

Seguin also got help from the TEF so Continental Automotive Systems Inc. could relocate production of its sensors and actuators from Europe and Asia.

You might have noticed, Perry is pushing manufacturing in many of these small towns. These jobs aren’t the most glamorous, but Texas is no doubt heavily investing in the war against outsourcing.

Even though U.S. Census Bureau shows Texas leading the nation in the number of people without health insurance and the school districts are not anything particularly to brag about (Seguin ranked 683 of Texas schools and Victoria, 686, according to schooldigger.com), it’s apparently hard to argue when our tax money gets diverted into these enterprises and creates great blue-collar jobs that don’t really give resident kids a lot to look forward to besides, “It beats working at Wal-Mart.”

You just may find some cool sexy, though, in George W. Bush’s hometown of Midland. XCOR Aerospace, a company currently leading the charge in space tourism, is establishing their new research and development center on the flight line at Midland International Airport (MAF) in a newly renovated 60,000-square-foot hangar, which will include office space and a test facility. The deal was announced in the fall, and renovation is scheduled to start soon and be completed by the late autumn. Andrew Nelson, chief operating officer, said: “With future suborbital operational sites on the East and West Coasts of the United States and around the world, plus a manufacturing and test facility geographically separate from our R&D facility, Midland will truly be at the heart of XCOR’s innovation engine.”

Still, all this government movement of private industry to define towns begs the question of whether this is really how those people wanted their lives to end up there. Or in this bad economy, are they just supposed to be grateful for any job?

Another question is whether a TEF forced fit can work.

Austin is a good case study of how two very different industries can share the same space. As a music town, it is deservedly called the “live music capitol of the world.” Austin City Limits and SXSW are just two good reasons for that, not to mention that any night of the week you can go see some of the best up-and-coming as well as established music artists around. But Austin also claims to be “Silicon Hills.” The TEF managed to rope in the following tech companies with designated tax-payers’ dollars: Sematech with $40 million tax dollars for 4,000 jobs, Home Depot Inc.’s IT with $8.5 million for 843 jobs, Samsung with $10.8 million for 900 jobs, HelioVolt Corp. with $1 million for 158 jobs, and HP with $5 million for apparently zero jobs. Sadly, poor musicians don’t seem to be benefiting directly from the TEF, though they bring in a large portion of the city’s tourism dollars and cultural atmosphere that attracts innovative companies. Nonetheless, hipsters and techies actually get along pretty well. The South by Southwest festival of film, music and technology pretty much sums up the spirit of collaboration, and Oliver Burkeman from theguardian.com, if glibly, called South by Southwest Interactive “the world’s highest-profile gathering of geeks and the venture capitalists who love them.” Still, as you might already see, there’s a third wheel here, and that’s the state capitol and other grim state buildings and a legion of state workers. But as you might expect, most state workers seem to like music, films, and video games.

Yet another question is how a neoconservative republican like Perry who preaches limited government can use state power to shape the lives of private people’s hometowns. Not to mention the odd logic of “privatizing” government by contracting with big companies in state affairs, thereby eliminating any sense of real competition. It only takes searching who owns the company who won the state contract and then searching how much that owner donated to Perry’s campaign to see an amazing number of coincidences. Texas Tollways, owned by a Spanish company, which funnels its billing into seemingly a different front company for each toll booth, is also raising a lot of eyebrows when it comes to government ethics–and none of it is transparent so much as utterly opaque.

Even if we speculate that Perry might somehow be pocketing some of this money under the table–and I have no claims that he is–is it not a fair question to ask whether or not he deserves it? Is it corrupt government if everybody benefits?

As Rick Perry himself might say, it’s hard to argue with so much success.

All together the TEF has so far invested over $400 million. “Texas is poised at the brink of a new era of prosperity,” Perry says.

To get a good sense of how the governor’s office is literally mapping out the new Texas, you need to visit the Texas Wide Open for Business Map Room, where you can find the topography broken down into current industries and workforce at different economic hubs, as well as energy, resources, and transportation maps, among others, showing companies considering the move a strategic business cartography. Meantime, here’s some history from the governor’s page:

At Gov. Rick Perry’s request, the 78th Texas Legislature established the Texas Enterprise Fund (TEF) in 2003 to help attract new jobs and investment to the state. The fund was reauthorized by the Legislature in 2005, 2007, 2009, and 2011. As the largest “deal-closing” fund of its kind in the nation, the TEF continues to attract businesses to Texas. The fund is used only as a final incentive tool where a single Texas site is competing with another viable out-of-state option. Additionally, the TEF will only be considered to help close a deal that already has significant local support behind it from a prospective Texas community.

TEF Award Listing – All Projects to Date

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2 thoughts on “The new topology of Texas

  1. Very nice read…thanks. As to government funds being diverted and or directly influencing a companies decision to locate it’s facilities to a certain town, is not related to how much money is given. There is still market conditions as well as locale and supply of human resources.While I like to think of myself as a ” free market’ advocate, seeing revenue that would somehow end up being diverted and used unwisely by bureaucrats, what Rick Perry has set up is possibly one of the wiser uses of ” government” dollars. As to campaign contributors, you can bet most folks will give to, or vote for he who gives to ” me”. Most business owners are rather conservative in their thinking as well as their politics. History will always bare the fruits of todays actions. Just as it will with Perry. Even in this brave new world of corporatism, success is hard to beat.

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