By Jack Rogers
From the January/February 2020 Issue
Texas has been named Business Facilities’ 2019 State of the Year (SOTY), becoming the first state to win BF’s top honor for the fourth time. The Lone Star State won our inaugural SOTY designation in 2007; Texas also was BF’s State of the Year winner in 2012 and 2016.
The top five Texas projects in terms of capital investment last year brought a tidal wave of more than $30 billion in capex to TX, while the top five job-creating projects netted nearly 15,000 direct new jobs.
“As we ring in 2020, it’s time to acknowledge that Texas has by far been the most prolific economic development success story of the decade just ended,” said BF Editor in Chief Jack Rogers, in a January 3 press release announcing the award. “With a rapidly expanding skilled workforce and leadership in a diversified set of growth sectors, Texas will be sitting tall in the saddle for years to come.”
After BF announced the Lone Star State’s record-setting fourth SOTY, Gov. Greg Abbott released the following statement:
“Thanks to our unrivaled workforce and our commitment to economic freedom, Texas continues to shine as America’s center for job creation, innovation, and economic development,” Gov. Abbott said. “I thank Business Facilities for this incredible honor, which is a testament to the hard work and dedication of Texans throughout the state, including our local economic development teams. The Texas success story is just beginning. Together, we will continue to cultivate an environment of economic growth and opportunity that creates a brighter future for every Texan.”
In an interview broadcast on January 6 on News Radio 1080 KRLD in Dallas-Fort Worth, Rogers characterized BF’s designation of TX as its 2019 State of the Year as a fitting coda for a decade of dominance in economic development by Texas.
“BF doesn’t have a State of the Decade Award, but if we did, Texas would be the hands-down winner,” Rogers told KRLD News Anchor Chris Sommers, in an interview heard throughout the state on the Texas State Networks.
BONANZA OF CAPEX AND NEW JOBS
BF’s SOTY award is based on a review of the state’s top projects for 2019 (in terms of capital investment) and job-creation, as well as an across-the-board evaluation of the successful execution of its economic development growth strategy. Diversification of growth sectors, business climate, incentives and the availability of a skilled workforce also are key factors considered in the SOTY evaluation.
The biggest job-creating projects in TX in 2019 included Uber’s new Administrative Hub in Dallas and a $1-billion investment by Apple in metro Austin. The Uber project in Dallas also earned the Bronze Award in BF’s 2019 Deal of the Year contest.
Apple broke ground in November for the construction of its new campus in Austin, part of the tech giant’s broad expansion in the city. At a production facility just a short distance away, Apple in December began shipping the all-new Mac Pro to customers.
“Building the Mac Pro, Apple’s most powerful device ever, in Austin is both a point of pride and a testament to the enduring power of American ingenuity,” said Tim Cook, Apple’s CEO. “With the construction of our new campus in Austin now underway, Apple is deepening our close bond with the city and the talented and diverse workforce that calls it home. Responsible for 2.4 million American jobs and counting, Apple is eager to write our next chapter here and to keep contributing to America’s innovation story.”
The all-new Mac Pro was unveiled at Apple’s annual Worldwide Developer Conference in June 2019. The 244,000-square-foot Mac Pro facility in Austin employs more than 500 people. Apple’s growth in Austin is part of the company’s nationwide expansion—announced in January 2018—to increase its investment in manufacturing, engineering and other jobs across the U.S. Apple is on track to contribute $350 billion to the U.S. economy by 2023, employing an additional 20,000 employees in cities across the country by that time.
Two mammoth LNG projects topped the list of major investments in Texas. Construction is scheduled to begin this year at the $15-billion Rio Grande liquefied natural gas export terminal in Brownsville, which will feature six LNG production units capable of producing more than 16 metric tons of LNG annually (the LNG production units are being designed to withstand hurricane-force winds of up to 150 miles per hour). A second major LNG export facility, Port Arthur LNG, has received the green light from the Federal Energy Regulatory Commission to begin construction at the Jefferson County site.
“These LNG export facilities will ensure that Texas maintains its grip on the top spot among exporting states in the 2020s, as it did throughout the first decade of the 21st century,” Rogers said. Texas has been the top state for exports for 15 consecutive years.
“Even if you take the oil and gas projects off the board, Texas brought in billions in capital investment for other growth sectors,” Rogers added.
The BF editor noted that the Lone Star State’s dominance of the energy sector is not limited to its status as the center of the oil and gas universe: Texas also rules the roost in wind power, leading the nation by far in installed wind power capacity and powering its way up the top 10 list of states that have the largest percentage of electricity generated by wind farms.
In 2004, the Texas Legislature authorized the construction of more than 3,500 miles of high-voltage transmission line connecting wind farms in western Texas with electricity-hungry cities to the east. The $6.8-billion project, designed to transmit enough electricity to power half of Texas in the spring months, was completed at the end of 2013. As of Sept. 2019, TX had an installed wind power capacity of 26.9 gigawatts, nearly three times as much as second-place Iowa.
“The decision by Texas early in the 21st century to spend nearly $7 billion to build a new wind energy transmission grid in West Texas will be remembered as one of most prescient investments a state has ever made to secure a brighter future for its residents,” Rogers said.
The fact that hundreds of wind turbines are dotting the landscape in West Texas should not be interpreted as a |sign that the region is phasing out the production of fossil fuels, Rogers noted. To the contrary, he said, the advent of horizontal drilling (a.k.a. fracking) is |permitting Texas to unlock a gusher of new crude from the estimated 75 billion barrels of oil in Permian Basin shale deposits (which also contain huge amounts of natural gas).
The Wolfcamp Formation in TX is holding an estimated 20 billion barrels of oil in four layers of shale. That’s roughly three times larger than North Dakota’s Bakken field and the single largest U.S. “unconventional” crude reserve ever discovered, according to the U.S. Geological Survey. At current prices, the Wolfcamp oil alone is worth more than $1.5 billion.
“With billions of barrels of oil under the ground in the Permian Basin now accessible via fracking and thousands of wind turbines now dotting the landscape above ground, we can be sure that the 20th century’s undisputed U.S. heavyweight champion of energy will defend its crown in the 21st,” Rogers said.
TEXAS IS A CYBERSECURITY LEADER
The Lone Star State’s dominance of the economic development landscape was again reflected in BF’s annual State and Metro Rankings Reports in 2019. Texas notched top-10 results in 15 categories in BF’s 2019 State Rankings Report; TX was BF’s top-ranked state in Installed Wind Power Capacity, FTZ Activity (imports and Exports) and Cybersecurity Growth Potential.
“San Antonio is now billing itself as the Cyber City, and with good reason,” Rogers said, in a press release announcing BF’s state rankings. “Its proximity to advanced military operations and close collaboration between industry, higher education and the government make it a prime cybersecurity hub.”
“When you factor in a thriving tech hub in Austin, the startup ecosystem in Houston and an expanding data center industry in Dallas-Fort Worth, Texas has everything it needs to be a top-tier player in cybersecurity for years to come,” he added.
San Antonio’s cybersecurity industry is mature and growing stronger. Alignment of education, industry and government within cybersecurity, and the ability to collaborate across these sectors, presents the city’s most significant opportunity for industry development.
What began in 1948 when the Air Force established its Security Service operations in San Antonio has grown into a national leading cybersecurity hub. Some may be surprised to learn that San Antonio has the highest concentration of cyber and intelligence professionals outside of the national capital region. Proximity to highly advanced DoD and military operations, including the Air Force Cyber Command and NSA Texas, paired with leading cyber education programs, and a competitive cost of doing business puts San Antonio in a position that other cities will have a hard time matching.
“To further develop San Antonio’s cybersecurity dominance, we’re focused on talent development tailored to industry needs in the cybersecurity industry,” said Tom Long, Chief Development Officer of the San Antonio Economic Development Foundation. “It’s a strategy gaining attention and investment from cybersecurity operations large and small, as well as large corporations with significant internal cybersecurity hub operations.”
Industry plays a key role in shaping San Antonio’s cybersecurity workforce efforts, through the San Antonio Economic Development Foundation’s workforce development team SA Works. With a pipeline of cybersecurity talent from San Antonio’s K-12, up through top higher education programs and advanced military backgrounds, San Antonio is preparing for jobs employers need to fill today and in the future.
The top 2019 projects in TX (in terms of capex) included Texas Instruments’ commitment to build a $3.1-billion semiconductor chip fab in Richardson and Steel Dynamics’ new $1.8-billion steel mill in Sinton.
Texas Instruments picked Richardson, TX for its new manufacturing plant, a project that will create more than 480 new jobs. The Dallas-based chipmaker will receive a $5.1-million grant from the Texas Enterprise Fund as part of the deal. Last summer, Indiana-based Steel Dynamics, Inc. announced the selection of Sinton, TX as the site for the a new $1.8-billion electric-arc-furnace (EAF) flat roll steel mill. Sinton is located approximately 30 miles northwest of the port of Corpus Christi, TX. Steel Dynamics officials said Sinton is strategically located within its targeted Southwest U.S. and Mexico market regions.
The Corpus Christi Regional Economic Development Corp. received an Honorable Mention Award for the Steel Dynamics project in BF’s 2019 DOTY competition.
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