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2007 State of the Year Award


Our newest competition singles out the state with the most economically significant relocation and expansion projects of the year.

This year marks the beginning of a new award recognizing the hard work of economic developers—the Business Facilities State of the Year award. We began by asking all 50 U.S. states to tell us about their five largest projects (for the most recent 12-month period for which they had data) both by number of jobs created and dollars of capital investment. Twenty-six states accepted our invitation. When all was said and done, Texas took the spot as this year’s big winner, with a total of $15.4 billion worth of investment and 9,335 jobs to be created by the projects it submitted. The Lone Star State certainly earned its designation as the 2007 Business Facilities State of the Year—as no other state came close to those numbers.

Here’s how we picked our winner: First, we looked at how many jobs each state created among the five projects with the greatest projected job creation totals. The state with the lowest total was assigned a baseline score of zero, and the state with the highest total was assigned a baseline score of 100. Every other state received a score between zero and 100, proportional to where its total fell between the high and low scores. We did the same for the five projects with the highest capital investment totals, and then averaged the two scores for each state into a single subtotal. In order to level the playing field, we applied a bonus or penalty to each state’s score based on its population relative to the jobs and investment projections, giving an edge to small states that did unusually well. We further scaled all total scores into a final score between zero and 100. (The state on top will always have a final score of 100.)

Even with the adjustments made for population, the state of Texas won by a huge margin; the next highest score of 82 went to Alabama, followed by Michigan (70.2), Louisiana (68.1), and Connecticut (59.8).

The five expansion projects that Texas entered in the first subcategory—jobs created—were Rackspace Managed Hosting, with 5,000 jobs; Fidelity, with 1,535 jobs; Maxim Integrated Products, with 1,000 jobs; Fluor Corporation, with 1,000 jobs; and Dimensional Fund Advisors, with 800 jobs. The most impressive of the lot, Rackspace, was announced this summer. The global managed hosting company, based in San Antonio, TX, is moving its company headquarters from its old site in northwest San Antonio to a new location in the Windcrest/San Antonio area. On top of the 5,000 jobs that this move is expected to create over the next five years, the company is planning on investing more than $100 million in the project. Rackspace’s decision to stay in the San Antonio area was facilitated by a $22 million Texas Enterprise Fund (TEF) grant from the state.

“The Governor’s Texas Enterprise Fund grant was the key factor in Rackspace’s decision to keep its company headquarters in San Antonio and build out a new campus within Windsor Park Mall,” says Graham Weston, executive chairman of Rackspace Managed Hosting. “We’re grateful for the state of Texas’ investment in Rackspace, as well as the assistance of our local governments, and we are committed to delivering thousands of high-paying jobs to Texas. We look forward to San Antonio being our home for years to come.”

For the five projects with the highest promised investment totals, Texas submitted Motiva Enterprises, with an astounding $7 billion; NRG Energy, Inc., with $5.4 billion; Eastman Chemical, with $1.6 billion; Microsoft, with $985 million; and CitiCorp, with $450 million. The biggest of these projects, Motiva Enterprises LLC, is a joint venture between Houston energy giant Shell and Saudi Arabia’s national oil company, Saudi Aramco; the project is an expansion of Motiva’s existing refinery in Port Arthur, TX. This will increase the refinery’s current crude oil throughput capacity to 600,000 barrels per day (bpd) from 285,000 bpd, making Motiva’s Port Arthur facility the largest refinery in the United States, according to the company. Motiva broke ground in December for the Port Arthur expansion, and intends to have the project completed by 2010.

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