< Previous24 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E headlines. Are you having to do anything special to counteract any lingering perceptions of Texas because of that? CRUZ: The Governor immediately stated that responding to the storm and power outage was the top priority of the Legislature. A lot of companies and site consultants understand that every region is susceptible to natural disasters. It was a once in a 500 -year event. Never had all 254 counties been under a winter storm warning. Texans learn lessons and we take action. The Governor is working with the lawmakers to add more power to the grid. He recently issued an order to mandate and fund the winterization of the winter power structure. How does Elon Musk’s decision to locate the Tesla Cybertruck plant in Texas impact your standing in the global automotive manufacturing sector? CRUZ: It has had a huge impact in the automotive sector, technology sector, battery manufacturing, venture capital, etc. We have seen a huge exodus of executives leaving California and moving to Texas. We have seen a tremendous amount of increase in interest. The Tesla project brings 5 ,000 new jobs and $1.1 billion in capital investment. We are seeing other big announcements in the auto sector. Toyota announced an expansion of its truck manufacturing plant in San Antonio. There was already great interest in Texas. We are so happy to continue to build on that reputation. What role is quality of life playing in attracting remote workers to communities in Texas? CRUZ: In today’s world of remote working, people are choosing where to live first and then where to work. Quality of life is extremely important in those decisions. Our comparatively low cost of living, great outdoor opportunities and wide-open spaces make Texas one of the best places to live in the U.S. This is also an affordable Texas State Capitol building in Austin Photo: Getty ImagesTE X A S E C ONOMI C D E V E L OP ME NT G U I D E 25 place to do business. As a result, we are a population magnet. What are you hearing about the office sector in Texas? Will large CBD office buildings in your state return to something close to full occupancy anytime soon? CRUZ: We believe we will see office buildings in our CBDs fill back up. Commercial real estate contributed $65 billion in GDP last year. Austin and Dallas-Fort Worth are some of the top markets in the country for commercial real estate, along with Houston and San Antonio. We are home to the corporate headquarters of CBRE. HP is building its corporate Headquarters in Spring, Texas. There will be telecommuting for the foreseeable future, but the office is still going to play a significant role in the Texas economy. What’s been happening on the FDI front since the advent of the pandemic? CRUZ: Texas is very successful in FDI. Site Selection magazine has ranked us No. 1 . Houston and Austin are very attractive. Small communities are also seeing their share of FDI — places like Plano and others. Companies from Brazil and Mexico are investing here. We have not been traveling abroad, so we are doing everything remotely now. That gives us a broader reach. We are able to do these Invest in Texas seminars more often now. We are doing them with Turkey, Peru, Panama, etc. We are getting the Texas word out there. “We were thinking as economic developers that companies would put things on hold during an election year. We thought they would take a wait-and-see attitude. But the pandemic started accelerating companies’ decisions. ” — Adriana Cruz, Executive Director, Economic Development & Tourism Office of Gov. Greg Abbott26 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E In Lockstep with Employers by MARK AREND TE X A S W ORK F OR C E C OMMI S S I ON In early February 2021, Governor Greg Abbott reappointed Aaron Demerson to the Texas Workforce Commission, subject to Senate confirmation, for a term set to expire February 1, 2027. The Commission is charged with overseeing and providing workforce development services to employers and job seekers in Texas. Aaron Demerson of Austin has served as the Commissioner Representing Employers since August 2019, and previously served as the Director of the Office of Employer Initiatives for the Texas Workforce Commission (TWC). Prior to TWC, he served as a Senior Advisor to Governor Rick Perry and was the Executive Director of the Economic Development and Tourism Division. Following are highlights of a mid-March interview with Site Selection Editor in Chief Mark Arend. Congratulations on being reappointed as Commissioner Representing Employers at the Texas Workforce Commission. Are there new or different priorities you anticipate during this new term? DEMERSON: None of us knew we would be hit by the pandemic in 2020 , so we have some opportunities to do some things differently. We’ve always listened to the employers, and now comes the time to take what we’ve learned from this pandemic and put it into action. And we’ll do some things differently as we continue to grow and evolve here in Texas, with companies like Tesla, Oracle and Hewlett- Packard announcing plans to relocate here, and smaller ones taking place, too, statewide. We’re champing at the bit to see what’s next for Texas without the pandemic. We’ve been able to make a lot of things work, even virtually, so I can only image what will happen once we’re unleashed in other ways. As Employers’ Representative, what expectations or resource requests do employers typically bring before the Commission? DEMERSON: We typically advocate for employers on the unemployment insurance side of things. I’m the Commissioner that represents the employers and two other commissioners represent the employees. And our Chair, Bryan Daniel, represents the public. Once a week we discuss unemployment insurance cases. Texas continues to be a very business-friendly state, and we’re quite proud of that. The other side of what we do is policy from the employers’ standpoint — making sure the tax rates are favorable, that we’re doing the best we can to keep rates as low as we can so that companies can operate their businesses successfully. We’re doing what we can to make sure that whatever rates are set are done looking at every angle to make sure we’re able to make a difference. We also advocate on behalf of the employer in terms of their needs and desires, such as liability protections, and making sure we continue to keep our training programs in place and don’t deplete our training funds for skilling and upskilling employees. Industry association groups want to see Texas grow, and I represent that on the employers’ side from a policy standpoint, making sure we have the proper programs in place so they can run their businesses and make a difference [see sidebar for a recent example]. Early in the pandemic, we spoke with major industry groups about their main concerns, and one was liability protection, which the governor made a priority. That’s an example of how we’re in lockstep with what the employers are looking for.TE X A S E C ONOMI C D E V E L OP ME NT G U I D E 27 Managing this role over such a vast geography and diverse economy as Texas must be a challenge. How are communications pipelines structured so you are aware of employers’ workforce needs and concerns? DEMERSON: On the workforce side, we have 28 local workforce solutions offices throughout Texas. Those people are the boots on the ground for anything workforce related. That makes our job a lot easier. Communication in Texas is made easier by the relationships we have with them throughout the state. There’s not a community in Texas that feels that they aren’t tied into us here in Austin, and I’m tied in statewide. That’s the secret in Texas behind some of our competitiveness — the fact that we communicate in an effective way anywhere in the state. We have that issue nailed down. And we were able to do that before the Zoom calls. New Funding Pays for Testing, Helps Workers Improve Marketability On March 8th, the Texas Workforce Commission (TWC) announced aid to Texans seeking to obtain their Texas Certificate of High School Equivalency (or TXCHSE), improve their marketability in the workforce, and increase their earning potential. The high school equivalency subsidy program provides free subsidies for Texans at least 21 years of age to take a GED or HiSET exam. While existing adult education and literacy (AEL) programs support adult learners to prepare to take a high school equivalency test, they do not cover the costs of taking a test. This program does that. “Administrative costs should not be barriers for students who have a willingness to succeed and commit to continuing their education,” said TWC Chairman Bryan Daniel. “These new funds will help students cross the finish line and improve their opportunities in the workforce.” Adult education and literacy (AEL) programs funded by TWC provide English language, math, reading, and writing instruction to help students acquire the skills needed to succeed in the workforce, earn a high school equivalency, or enter college or career training. Recent analysis shows that a significant number of unemployed Texans impacted by the pandemic do not have a high school diploma or its equivalent. “Workers in adult ed programs often joined the workforce early and missed education opportunities,” said TWC Commissioner Representing Labor Julian Alvarez. “These are hard workers who have a gap in their education that can be limiting. These programs help them fill that gap and position them to reach their full potential.”28 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E Texas may soon be announcing one of its largest foreign direct investments (FDI) to date — a $17 billion semiconductor project for South Korea’s Samsung Electronics Co. The site search, which reportedly includes locations in Korea, New York and Arizona, was still under way in early April. Should Texas land the project, it would likely join the Austin industrial market, where Samsung Austin Semiconductor has employed thousands of workers for the past 25 years. The Samsung project would add more than 500 FDI jobs to the Lone Star State’s more than 666,000 — the second- highest number of such jobs in the U.S. behind California. More than 1,700 international companies have operations in Texas, employing more than 203,800 in the manufacturing sector, or 31% of all FDI jobs in the state, according to the Global Business Alliance. As a percent of total workers, Texas has the highest number of FDI jobs in the South Central U.S., at 6.1%. FDI employment growth grew 28% from 2013 to 2018; the state’s overall private-sector employment grew 13% in that timeframe, or half the rate of FDI job growth. In November 2020, Site Selection magazine named Texas the top state for FDI based on projects involving foreign-based end-user investors, total project-related capex and total project-related job creation according to the publication’s proprietary Conway Projects Database. Two Texas metros — Houston-The Woodlands-Sugar Land and Dallas-Fort Worth- Arlington — placed fifth and sixth respectively in the Top 10 metros for FDI projects nationally. Texas is home to 32 foreign trade zones, giving international companies requiring the benefits afforded by those plenty of location options. The U.K., Germany, Canada, France and Japan are the countries with those most FDI projects in Texas from 2011 to 2016, according to the Governor’s Office of Economic Development & Tourism. The top five by job creation are Japan, Canada, Germany, India and the U.K. Japanese Investors Add Texas Facilities Japan appears in both Top 5 lists, and in November 2020 it added another project to its extensive presence in Texas. CKD Corporation, headquartered in Aichi, Japan, announced its first U.S. production site in Austin. The $13-million investment will create up to 70 new jobs and is scheduled to begin operations in fall 2021. CKD FDI Employment Growth DOUBLES Overall Job Growth by MARK AREND Photo: Getty Images F D I & E X P O R T S30 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E Corporation provides automation technology products found in a wide range of industries including automotive, packaging, and medical. The Austin manufacturing facility will produce fluid-control components for the semiconductor industry. In April, the Dallas office of Duke Realty Corporation announced the development of a state-of-the-art, full-service distribution facility for Yokohama Tire Corporation at Intermodal III Industrial Park. The deal secures a long-term lease agreement for the 431,630-square-foot facility in Wilmer, Texas, about 15 miles southeast of Dallas. The new facility expands Yokohama’s distribution network in the U.S. to a fourth location centrally located to meet the needs of its customers in the Southwest. Yokohama Tire is expected to begin occupying the space this summer. It will first be used to distribute Yokohama’s OE tires, followed by passenger car/light truck and commercial truck/bus products in 2022. Top State for Exports —Again Texas ended 2020 as the No. 1 exporting state in the United States for the 19th consecutive year, more evidence of the strength and resilience of the state’s economy, said Robert Allen, president and CEO of the Texas Economic Development Corporation. “Texas has developed a remarkable track record of economic achievement,” Allen said. “Texas is and has been the No. 1 exporting state in the nation, the best state business climate, and the world’s ninth largest economy. Even with all the challenges we faced in 2020, we are still outpacing the competition in exports — handily, I might add — that’s a really good sign.” With $279 billion in export trade in 2020, Texas continues to lead the United States as it has for the past two decades. Texas’ 2020 exports were larger than the sum total of goods exported by the next three largest export states — California with $156 billion in exports, New York with $61.9 billion and Louisiana with $59.6 billion, Allen said. Texas is also the No. 1 exporting state of technology products for the eighth con- secutive year as well, according to the U.S. Census Bureau, with $44.8 billion in exports. California was in second place with $37.5 billion in exports. The U.S. Bureau of Economic Analysis released 2020 ex- port data on February 5th. This data shows the pandemic had a negative effect on exports across the nation in 2020, but a combination of factors that sustain Texas’ economy helped it retain its top spot on the list of exporters by state. “Those factors include Texas’ pro-business climate of low taxes and reasonable regulations, its economic diversity, the second largest workforce in the nation, and its award-winning infra- structure — among many others,” Allen said. More than 1,700 international companies have operations in Texas, employing more than 203,800 in the manufacturing sector A rendering of Yokohama Tire’s new distribution facility in Wilmer, Texas. Image courtesy of Duke Realty CorporationTE X A S E C ONOMI C D E V E L OP ME NT G U I D E 31 Top 20 Projects of 2020 Top Projects by SectorTop Projects by Type TEXAS SECTOR PROJECTS Machinery, Equip. & Const. 167 Business & Financial Services 128 Transport & Logistics 86 Food & Beverage 81 It & Comm. 74 Life Sciences 50 Energy 49 Chemicals & Plastics 38 Consumer Products 37 Metals 28 Automotive 22 Electronics 20 Other 52 COMPANIES CITY SECTOR CATEGORY TYPE INV. US$M JOBS Axiom Space, Inc. Houston Aerospace Expansion Office, Manufacturing 2,000 1,000 Tesla Motors, Inc. Del Valle Automotive New Manufacturing 1,000 5,000 Max Midstream Texas, LLC Point Comfort Energy New Manufacturing, Dist. Warehouse 1,000 474 Qorvo, Inc. Richardson Machinery, Equip. & Const. Expansion Manufacturing 850 65 Braskem S/A La Porte Chemicals & Plastics New Manufacturing 750 50 Verizon Communications Inc. Irving Electronics Expansion Office 285 Georgia-Pacific LLC Sweetwater Paper, Printing & Packaging Expansion Manufacturing 285 120 FFF Enterprises, Inc. Flower Mound Life Sciences New Office, Distribution Warehouse 270 Freshpet, Inc. Ennis Food & Beverage New Manufacturing 264 427 Amazon.com, Inc. Waco Transport & Logistics New Distribution Warehouse 200 1,000 Horn Technologies & Services, Inc. La Porte Business & Financial Services New Manufacturing 200 38 Amazon.com, Inc. El Paso Life Sciences New Distribution Warehouse 192 700 BAE Systems PLC Austin Aerospace Expansion Manufacturing 150 700 The TJX Companies Inc. El Paso Transport & Logistics New Distribution Warehouse 150 950 Chevron Phillips Chemical Co. LLC Pasadena Energy Expansion Manufacturing 150 350 Southwest Airlines Co. Houston Transport & Logistics New Distribution Warehouse 125 400 Kinder Morgan Inc. Pasadena Energy Expansion Manufacturing 123 30 Shanghai United Imaging Healthcare Co., Ltd. Houston Life Sciences New Research and Development 112 143 Envases (UK) Limited Waco Metals New Manufacturing 100 121 Interim Healthcare Inc. Pearland Business & Financial Services New Headquarters 100 44 TYPE PROJECTS Distribution Warehouse 312 Office 277 Manufacturing 219 Headquarters 83 Research & Development 12 Call Center 8 Data Center 8 34% DISTRIB. WH 20% MACHINERY, EQUIP & CONST. 15% BUSINESS & FINANCIAL 10% TRANSPORT & LOGISTICS 30% OFFICE 24% MFG. Source: Conway Data Analytics by the Numbersby the Numbers S T A T I S T IC A L P R O F ILE32 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E Texas is No. 1 Texas is No. 1 $ Population 29M Lone Star Fast Facts Median Household Income $61,874(2019) Total Area 269k sq. mi. Capital Austin Governor Greg Abbott Population Rank No. 2 Gov. Cups won 9 years in a row Site Selection Magazine Texas is the No. 1 Exporter U.S. Census Bureau, 2020, 19th consecutive year No. 1 Fastest-Growing State Economy U.S. Bureau of Economic Analysis 2020 No. 1 State for Business Chief Executive, 16th consecutive year No. 1 Best State to Start a Business WalletHub 2019 No. 1 State for Growth Prospects Forbes 2019 9xNext >