< Previous62 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E in Texas? Site Selection Managing Editor Adam Bruns interviewed dozens of people last year and chronicled Musk’s journey from California to the Lone Star State. In the end, the usual suspects prevailed: presence of a skilled workforce, particularly in electronics; availability of a large real estate tract that enabled a desirable rate of return on investment; generous state and local incentives package; a largely positive and forward-looking business climate; willingness by state and local leaders to get aggressive in the deal-making process; central location in North America; superior transportation and logistics networks; and direct access to the political powers-that-be in the state capital. “While automotive seems like a very distinct difference, the truth is Austin is home to some of the most advanced electronics manufacturers in the world,” said Ed Latson, Executive Director of the Austin Regional Manufacturers Association. “The skills needed to build their products are not that different than what it will take to put together an electric vehicle.” Latson added that “Tesla should be a magnet for an entire ecosystem of business and suppliers that support automotive plants and their employees.” Tesla is far from alone. In recent years, Texas has hauled in major investments from General Motors, Toyota, Peterbilt, Toshiba, Caterpillar and other vehicle producers. Since 2017, more than $2.5 billion in automotive plant investments have landed in the Lone Star State. These include two major expansion projects by Toyota at its truck plant in San Antonio, and a $106 million investment by East Penn Manufacturing Co. in Tempe. Other large deals have come from AW Texas/Aisin, Texas Speed & Performance, Cardone Industries, Inc., and scores of suppliers. Altogether, more than 1,750 automotive manufacturing plants call Texas home, and Texas ranks No. 7 in the U.S. in total automotive manufacturing employment. From 2009 to 2016, total exports of cars and trucks from Texas more than doubled, from $9.2 billion to more than $18.5 billion. Texas has also experienced a 17% increase in automotive manufacturing output since 2014, according to the Governor’s Office of Economic Development & Tourism. Approximately 500 companies employ more than 40,000 workers in this sector throughout Texas, paying average annual wages of more than $62,000. Texas also serves as the primary link between Mexico’s automotive plants and the rest of the automotive manufacturing base in North America. Add it all up and it is no wonder Musk chose Texas. The only question is, who is next? About 500 companies employ more than 40,000 workers in the auto sector in Texas and pay an average annual wage of more than $62,000. Source: Texas Governor’s Office of Economic Development & TourismTE X A S E C ONOMI C D E V E L OP ME NT G U I D E 63 In March 2021, Amazon announced plans to open a new 1-million-sq.-ft. fulfillment center in Amarillo that will create more than 500 new full-time jobs. “We look forward to becoming part of the fabric of the Amarillo community and are thrilled to be able to expand our operations in the Texas panhandle,” said Mark Marzano, director of operations at Amazon. “We’re grateful for the support we’ve received from local and state leaders and look forward to creating over 500 new, full-time jobs for the local community,” he said, as Mayor Ginger Nelson gave credit to the Amarillo Economic Development Corporation “for the hard work in helping make this fantastic partnership with Amazon a reality.” Indeed, in a conversation I had later that month with Amazon Head of Worldwide Economic Development Holly Sullivan, she emphasized the importance of fabric over prefabricated plans. “Across the board, there are two things that will drive most of our business decisions,” she told me. “One is available talent — ensuring we can have that initial day one talent, and also where we can invest in the long-term talent pipeline. Number two would be business friendliness. We want to locate and invest in communities that want us and can support us in the long term, and where we can build a long-term community partnership.” Whether it’s a fulfillment center or a corporate office in location such as Austin, she said, “I can’t emphasize enough the importance by ADAM BRUNS There’s a lot more to Texas goods movement than one e-commerce giant. But Amazon’s very large footprint makes a deep impression. Since its inception in 1989, more than 53 million square feet have been developed at AllianceTexas. Photo courtesy of AllianceTexas Surgesin TexasAmazon L O G I S TI C S & D I S TR I B U TI ON64 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E of external community partnerships with policy makers and economic development organizations we work with on a daily basis. They also can help guide where we can best integrate ourselves into the neighborhoods.” Map of Fulfillment From January 2018 through March 2021, Site Selection magazine’s proprietary database of corporate facility investment projects tracked more than 2,440 individual projects across all industry sectors and facility types in Texas. More than 30% of them — 805, to be precise — were distribution facilities. And a whole extended family of them were nice big packages of jobs delivered by Amazon to its new neighborhoods. Since 2010, Amazon has created more than 70,000 jobs in Texas and invested more than $16.9 billion across the state, including infrastructure and compensation to its employees. The only states with more investment are California and Amazon’s home state of Washington. Amazon says its investments have contributed more than $18.8 billion in GDP to the Texas economy and have helped create over 49,000 indirect jobs on top of Amazon’s direct hires — from jobs in construction and logistics to professional services. Moreover, more than 116,000 independent authors and small and medium businesses in Texas are selling to customers in Amazon’s store, creating thousands of additional jobs across the state. Amazon’s main investments in Texas include the following: • 17 Fulfillment and sortation centers • 10 Delivery stations • 3 Tech hubs • 3 Air Gateways • 1 Regional Air Hub • 35 Whole Foods Market locations • 10 Amazon Hub Locker+ locations • 1 Amazon 4-Star store • 1 Amazon Books store • 5 Prime Now hubs • 1 Wind farm • 7 On-site solar locations • Amazon Original series filmed in Texas: “Panic” It’s no wonder that during a Site Selection webinar in March 2021 about the top metro areas in the nation, Texas-based Susan Arledge, executive managing director of site selection and incentives at esrp, referred to the e-commerce facility surge inside and outside of Texas as “the United States of Amazon.” But they’re not the only ones accessing Texas highways, ports, airports and customers. In Lancaster in recent months, Walmart has located two facilities totaling 2.2 million sq. ft. and 1,300 jobs; DSV Logistics is constructing a 1-million- sq.-ft. regional headquarters with 250 office jobs; and Kodiak Robotics is pioneering driverless semi trucks at their main Texas hub. Shane Shepard, economic development director for the City of Lancaster, says the community has “a ton of creeks and rolling hills for housing, schools that are rated the same as our counterparts in north Dallas such as McKinney, Richardson, and Plano, an old downtown set for redevelopment and programming, and enough space for another 54 million square feet of industrial. He also notes the area has strong infrastructure for data centers. Good thing. The e-commerce wave, after all, depends as much on the old Colorado River Constructors opened the new U.S. Highway 183 South, formerly Bergstrom Expressway, one of Austin’s most important arterial roadways. Photo courtesy of the Central Texas Regional Mobility Authorityinformation superhighway as it does on the roads that carry our goods. Three Decades of Movement and Innovation Meanwhile, that Amazon regional air hub is at AllianceTexas, the 27,000-acre master-planned, mixed-use community in north Fort Worth that in March announced it had generated approximately $91.98 billion in regional economic impact and over $2.82 billion in total taxes paid to local public entities during the past three decades. According to its annual Insight Research Corporation report, more than $8.24 billion of the development’s economic impact was generated in 2020 alone, exceeding the economic impact generated in 2019 by nearly $1 billion — remarkable in a pandemic year, but not when one considers e-commerce was the world’s pandemic- induced lifeline. The AllianceTexas impact only figures to grow as transportation investment does too. Among projects currently underway in the AllianceTexas corridor is the construction of the Alliance Connector project (completion of I-35W from US 287 to Eagle Parkway; SH 170 from Parrish Road to I-35W; and Haslet Parkway extension). “Construction on the project kicked-off in summer 2020 and will be a three-year, simultaneous effort to complete stretches of three separate highway arterials, creating seamless highway mobility throughout the area,” says AllianceTexas. “A testament to the public-private partnerships central to the AllianceTexas story, of the $768 million bid, only $25 million was paid by the Texas Department of Transportation (TxDOT),” the release continues. “The remainder, over $743 million, came from private investment.” The AllianceTexas Mobility Innovation Zone (MIZ) launched by Hillwood and Deloitte continues to expand too. And in 2020, expanding on Alliance Airport’s legacy as the world’s first industrial airport, Hillwood established the AllianceTexas Flight Test Center, which recently hosted North Texas’ first unmanned aircraft system (UAS) delivery demonstration to a residential community with the Bell Autonomous Pod Transport (APT). “TuSimple, a global technology company with a focus on self-driving, heavy-duty trucks, also launched expanded autonomous trucking operations from the MIZ last year with a Hillwood-developed freight terminal,” Hillwood reports. “We’ve continued to focus on sound development fundamentals, while embracing new and innovative technologies that drive efficiency for our customers,” said Mike Berry, president of Hillwood. “Though we all have experienced significant difficulties during the past year, AllianceTexas continues to prove its sustainability as an economic engine for the state of Texas and a place where business can thrive during the toughest of circumstances.” Since 2010, Amazon has created more than 70,000 jobs in Texas and invested more than $16.9 billion across the state.66 TE X A S E C ONOMI C D E V E L OP ME NT G U I D E Texas has long been a manufacturing powerhouse, having provided a platform for growth and innovation in manufacturing sectors as diverse as semiconductors, aerospace, chemicals, electronics and automotive, just to name a small handful. And you can now count Tesla among the ranks of manufacturing titans such as GM, 3M, Samsung, Toyota, Ericcson, Lockheed Martin and Raytheon, that call Texas home. The decision of Tesla’s Elon Musk to build the company’s new Cybertruck, as well as the Tesla Model Y and Tesla Semi, on 2,000 acres east of Austin produced huge headlines in 2020. The $1 billion, 4.5-million-sq. ft. plant, is bringing some 5,000 jobs to Travis County. Companies like Tesla are tapping into a deep talent pool in Texas, where nearly 875,000 workers are employed in manufacturing roles. According to the National Association of Manufacturers, that gives Texas the nation’s second-largest manufacturing workforce. Manufacturers also choose Texas for its business-friendly climate, which includes a high-value cost of business and competitive incentive programs. Illinois-based Navistar, a leading maker of buses and commercial trucks, chose San Antonio to launch its new Manufacturing 4.0 production concepts. Navistar broke ground in June 2020 on a commercial truck facility that will incorporate the company’s latest manufacturing principles — digital factory, connected machinery, robust lean manufacturing processes and cloud analytics — to “enable predictive quality and maintenance and allow data- driven decisions to be made on the shop floor in real time,” the company says. “We are excited to launch Manufacturing 4.0 concepts at our new facility, as these advancements will reduce manufacturing complexity and increase quality,” said Persio Lisboa, Navistar’s executive vice president and chief operating officer. “Sharing these new industrial advances and Tesla is coming to Texas, and it’s hardly alone. by GARY DAUGHTERS A Higher Gear AD V AN C E D MAN U F A C T U RI N G Tesla will build the company’s new Cybertruck, Model Y and Tesla Semi models on 2,000 acres east of Austin. Image courtesy of Tesla, Inc.TE X A S E C ONOMI C D E V E L OP ME NT G U I D E 67 Manufacturing 4.0 concepts with our existing plants is an additional benefit we anticipate from our experience with this new facility.” Navistar’s 900,000 sq.-ft. plant is bringing more than 600 jobs to the San Antonio area. The plant is to make Class 6-8 vehicles, with production expected to begin in early 2022. Houston’s Long Legacy Houston alone is currently home to more than 250 companies involved in aircraft or space vehicle manufacturing. Of the 50 largest aerospace manufacturing companies in the country, 32 have a presence in the Houston region. As the home of NASA’s Johnson Space Center, Houston has been the epicenter of human space exploration for nearly six decades. In January 2020, NASA selected Houston-based Axiom Space to build a privately funded platform that will attach to the International Space Station (ISS). The project could pave the way for a future commercial space station. Axiom is partnering with Boeing and other contractors on the project that could eventually cost some $2 billion and create up to 1,000 jobs. The company expects to launch its first module as soon as 2024. Dallas and Austin Score Big Wins Even during the recent pandemic year, Lockheed Martin found itself bolstering the workforce at facilities in the Dallas-Fort Worth area. The aerospace giant signed contracts in March alone totaling nearly $6 billion for F-35 fighter jets, missile interceptors and spare parts. Motorola expects to produce almost 400,000 cameras this year in Richardson, near Dallas, at its newly-opened Video Security & Analytics manufacturing facility. The $25 million plant also is to produce one million printed circuit board assemblies. “With this new, state-of-the-art facility we will be manufacturing critical, NDAA-compliant safety and security video solutions on the doorstep of American public safety agencies and businesses,” said John Kedzierski, the division’s senior vice president. In New Braunfels, southwest of Austin, Continental is investing $110 million to build a 215,000-sq.-ft. facility to manufacture and produce products for advanced driver assistance systems. The new manufacturing plant in Comal County retained 450 jobs in the state of Texas and added 130 more. “We appreciate the strong support we have received from the state, county and city of New Braunfels,” said Continental North America CEO Samir Salman. “Having a facility specifically dedicated to the development and production of these technologies is a major step in helping us achieve our vision of a world with zero fatalities, injuries and crashes. Next >