Texas Receives First Business Facilities State of the Year Award

The first annual Business Facilities State of the Year award has been presented to Texas.

The first annual Business Facilities State of the Year award has been presented to Texas, which emerged as the clear winner for the most economically significant relocation and expansion projects in 2007.

Business Facilities asked all 50 U.S. states to submit 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 responded, and Texas weighed in with $15.4 billion worth of investment encompassing projects that have created more than 9,300 jobs in the state.

Ted Coene, Co-President of Group C Communications, Inc. and Chief Business Officer of Business Facilities, presented the 2007 award to Governor Rick Perry at his office in Austin, TX, in March. “The Lone Star State certainly earned its designation as the 2007 Business Facilities State of the Year,” Coene says. “No other state came close to the numbers submitted by Texas.”

Accepting the award, Gov. Perry cited relocations as a key driver of overall economic development.

“Texas is a state where people can risk their capital with the opportunity to see a positive return on their investment,” he said. “Part of the overall success of the Texas economy is a result of corporate CEOs choosing to relocate and grow their businesses in our state because we have what they need to succeed: smart people, regulatory certainty, low taxes, and a quality of life unmatched by any other state.”

Even with adjustments made for population, Texas won the award by a huge margin with a score of 100; 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 subcategory “Jobs Created” included 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.

Rackspace, a global managed-hosting company based in San Antonio, TX, is moving its company headquarters from northwest San Antonio to a new location in the Windcrest/San Antonio area. The move is expected to create 5,000 jobs during the next five years, and 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. Rackspace says it is committed to delivering “thousands of high-paying jobs in Texas.”

For the five projects with the highest promised investment totals, Texas submitted Motiva Enterprises LLC, with $7 billion; NRG Energy, Inc., with $5.4 billion; Eastman Chemical, with $1.6 billion; Microsoft, with $985 million; and CitiCorp, with $450 million.

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, which 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 says it is planning to have the Port Arthur expansion project completed by 2010.

Business Facilities applied a bonus or penalty to each state’s score based on its population relative to the jobs and investment projections presented by the nominees, giving an edge to small states. Despite this adjustment, Texas far outpaced the competition.