City of KyleEconomic Development & Tourism Committee

2014 ED Workshop

January 9, 2014

ECONOMIC DEVELOPMENT

WHAT IS IT?Why Bother?

•Vision

•How does economic development work?

•What do economic development organizations do and the role of ED staff?

•What is the role of the ED&T Committee and City Council?

Vision

"Kyle will be the premier employment center for the southern tier of the Austin metropolitan area and will serve as a destination for the best in shopping, recreation, and living in Hays County." -City of Kyle ED Strategic Plan 2008

Kyle will become a full service community that will continue to grow quality healthcare, higher education and retail industries for the benefit of its residents. -Kyle City Council 2011

What is Economic Development?

Is all about OPPORTUNITY

To improve the community…..

It is the creation of new tax dollars to grow and diversify the local economy whereby lessening the burden on local tax payers.

Economic Development is…

a PROCESS that if successful leads to employment opportunity and wealth creation and improves the Quality of Life of the town,

It’s about economic growth through existing business retention and business recruitment.

Focused on job creation

& building community wealth

Economic Development is…

Recognizing our SWAT

Capitalizing on Assets

And working on Challenges

ED is key to a communities success.

Decrease “ Brain Drain”

Opportunity to create a positive business climate and good jobs

Helps define “what we want to be when we grow up.”

Guarantee for the future

Economic Development vs. Community DevelopmentEconomic DevelopmentA process which improves the economic and cultural well-being of the peopleIs focused on job creation and building community wealth

Community DevelopmentA process which builds a desirable and sustainable communityImproves the look and feel of a community - - parks and green-space, redevelopment and beautification, and other QOL amenities

The thing about community & economic development…………. There are no right or wrong answers

There are no magic formulas or silver bullets

Every town is unique

Every town must chart its own course

Today’s action -- or inaction -- dictates city future

First things first….

Priorities and vision for community future

What do you want to be

Realistic assessment of assets & liabilities

F O C U S: put chips where you can win

Don’t chase after the latest and greatest economic development fad

Quality of Life -- What is it?

Good schools and low crime

Clean environment & appealing look

Community identity, diversity & PRIDE

Well managed public sector; good value for the tax dollar

Increasing property values

QoL continued…

Connectivity between the city, schools and business

A healthy balance of primary jobs, retail opportunities, and service sector and an active life/work balance

A place where people want to live, raise kids, start a business, invest, and retire

Role of Local Economic Development

Do things that people assume just happen

CARE about business: Creation, Attraction, Retention and Expansion.

Tear down fences and build fences

Maximize economic opportunity for citizens

Promote community to the outside world

Build balanced economy…increase tax base

Business Recruitment

More incentives required to get new companies

Everything has to be ready for companies: real estate, infrastructure, workforce

23 million people in TX today -- est. to be 50 million by year 2040.

Kyle will be the largest City in Hays County within the next 5-8 years. How can we not recruit?

Prospects are usually unreasonable -- Quick turnaround / pages and pages of data / little feedback and strict CONFIDENTIALITY

“You’ve got to go out on a limb sometimes because that’s where the fruit is.” - Will Rogers

Financial Incentives

A fact of life if you want to recruit high paying jobs and large capital investment

Nothing just happens by accident

Competition for quality jobs is INTENSE

Incentive wars are most competitive in metro areas with multiple communities

In Texas, local governments must put up majority of incentives

Examples of Types of Incentives: free land infrastructure grants and financing for

buildings and equipment

working capital loans relocation expenses tax rebates fee waivers

Due diligence: economic

impact analysis cost/benefit

analysis letter of intent development

agreement

the public does matter

Raising the Financial Incentive Bar

Google 2007

North Carolina

$212 M 210 jobs$1 million per job

Sematech Campus 2006

Albany, N.Y. $300 M 450 jobs$667,000 per job

Thyssen-Krupp 2007

Alabama $822 M 2,700 jobs$305,000 per job

Boeing 2009

South Carolina

$570 M 3,800$150,000 per job

Kia Motors 2006

Georgia $400 M 2,900 jobs$137,000 per job

Local Case Studies

RSI Cabela’s Image Microsystems

OK, Let’s recruit….but what? Primary jobs Retail businesses Tourists & retirees Creative class, or home based consultants Big companies, small companies Real estate developers & investors

What are Primary Employers?

…are companies whose products or services are ultimately used in statewide, national or international markets.

And perhaps more importantly, primary employers create primary jobs

What are Primary Jobs?

Primary jobs are jobs created by manufacturing, professional services, distribution/warehouse, service industry, etc. that produce or sell their services on a regional, state, national or international basis.

Non-Primary jobs (or tertiary jobs) are jobs created in the local area and are the result of the economic development (wealth created by primary jobs) ….e.g., local grocery store, service station or restaurant

Primary Jobs are…

Primary jobs are the foundation of local economic development

Retail expansion is the product of economic development, not the cause of it

Local governments “profit” from economic growth and development

Employment Multipliers

All Jobs Are Not Created Equally – A fast food job creates 1/10 additional job

A high-paying manufacturing job creates 2+ spin-off jobs

A job at an advanced technology company creates 7 additional jobs

One wealthy retiree creates 3 additional jobs

Business Decision Lifecycle

Target Markets

Short-Term Targets (represent economic opportunities to which Kyle can begin marketing immediately.)

Destination Retail and Leisure Healthcare Services Professional Services Electronics and Technology

Long-Term Targets (require sustained efforts over a significant period of time)

Corporate Business Services and Headquarters

Biomedical and Life Sciences Logistics and Distribution

Balanced & Equitable Tax Structure

Industrial

Ret

ail

Residential

Ret

ail

Residential

Industrial

Kyle will build this positionas an employment center by:

Supporting the development of a commuter rail station surrounded by dense mixed-use development;

Establishing high standards for new development along I-35 to maximize the impact of new business opportunities;

Unifying the urbanized area; Bridging the gaps between Kyle’s pool of

talent and the lack of local employment opportunities;

Diversifying the tax base to serve a growing population;

Providing a new outlet for regional economic growth by positioning Kyle as the employment center for Austin region’s southern tier; and

Aggressively promoting a new image of Kyle —internally and externally—as the leader in economic development for the metropolitan region’s southern tier.

What do Economic Development Organizations Do? The role of an Economic Development

Organization is to organize and implement a plan of action to improve the economic well-being and quality of life of residents of a given geographic area/region.

Economic Development Organizations are part of a team of players committed to creating and maintaining good jobs and a high quality of life

Most Important Role of City Staff? Facilitate processes and accommodate to the

extent that local code and ordinances allow.

City of Kyle adds value for businesses in Kyle through the ED Department? The ED Office visits with prospects, existing

businesses, groups and individuals on a regular basis to facilitate/educate on the City of Kyle, local trends and demands, basic processes and referrals to additional resources.

Development Process

Final Plat/ Construction Plan

Record the Plat

Site

Building Permit

Zoning for public infrastructure

Development Permit

Certificate of

Occupancy

Economic Development & Tourism Committee Role The ED&T Committee is the voice of the

community in regards to ED related issues.

Requires Commitment, Confidentiality, Positivity, Support and Vision

Makes recommendations to City Council and plays integral role in the review process of applications for business incentives, policy and plans impacting the future of Economic Development in the City of Kyle.

The Very Best City Leaders Know …

Connections between economic development and other city policies

Their regulatory environment

Their local economic development stakeholders and partners

The needs of your business community

What does Kyle look like?

2012 Population Estimate: 30875 Household Size: 3.23 Median Age: 29 Average Household Income:

$65,100 Educational Attainment: (persons 25+yrs)

High School Grad: 89% Some College (no degree): 31% Bachelor Degree or Higher: 25%

What are the fundamentals of Kyle?(household size, age, income and education)

Some observation’s relevant to Kyle’s current situation ....A Third Party Perspective- Carlton Schwab, TEDC

Your economic development effort is strong for what it is, but woefully behind communities that have the economic development sales tax

Buda $1.2 million

Bastrop $1.3 million

Lockhart $600,000

Pflugerville $2.0 million

Kyle $215,000

“As such, you are at a competitive disadvantage for most primary employer opportunities, which makes it extraordinarily difficult to address the housing/jobs mismatch.”

-Carlton Schwab, President

Texas Economic Development Council

How everyone can help everyday…

Local identity/Community pride Shop KYLE when possible Get involved & stay informed Be Open Be Open to Change Change is going to happen with your whether

we like it or not. Change is inevitable.

-Let’s help direct it.

“There are at least ninety nine ways to get beat, but only one way to win: get there first” Willie Shoemaker

“Even if you’re on the right track, you’ll get run over if you just sit there.” Will Rogers

Questions, Comments, Observations…