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Inward Investment Guides

Texas Today: Economic Development Strategies and Business Success Stories

Mali R. Schantz-Feld (Apr/May 09)
(page 2 of 3)
Big Deals in "Big D"
In the cities surrounding Dallas, company decision-makers have been influenced by such issues as logistics and quality of life. Sanyo Energy (USA) Corporation, manufacturer of rechargeable batteries and solar cells, moved its headquarters to Frisco in fall of 2006. Andrew Sirjord, the company vice president, says the division had been headquartered from 1987 to 2006 in San Diego, California. "Since a significant portion of our revenue was generated east of the Mississippi, we decided that we needed to get closer to our customer base in Central or Eastern time zones," he says. In addition, state corporate income tax rates, costs of living, costs of doing business, and educational availability were prime factors. "The Dallas area had a strong wage level and low cost of living, so our employees were able to buy a lot more for their dollar when they moved here," he says. "I've been told [by employees with school-age children] that the school system and level of education provided here was a benefit that has wowed our employees."
The city of Denton reports diverse economic development activity. Aircraft maintenance and service company Jet Works Air Center is doubling its hangar and office space at the Denton Airport and adding up to 60 aircraft technicians to its existing staff of 132 people. The privately owned, 13-year-old company is the sole completion center for the Italian corporate aircraft manufacturer Piaggio. The company has leased land on which to build a 45,000-square-foot facility that will include 32,000 square feet of hangar space, with the remainder earmarked for offices and back-shop activities.

Aldi Inc., a discount grocer, is planning what is expected to become Denton's largest distribution center within the next few years. The company purchased a 185-acre tract near the Denton Municipal Airport for the estimated $40 million, 500,000-square-foot center that will support 25 stores in the Dallas-Fort Worth area. The site's advantages include proximity to Interstate 35 North with easy access to Dallas, Fort Worth, and Oklahoma City. Also in Denton, jewelry manufacturer Jostens' is completing a 13,000-square-foot expansion to its facility that will result in the addition of approximately 175 new jobs to the current 290-employee base, which increases by approximately 200 seasonal and temporary workers during the fall peak season.


Insurance company Torchmark Corporation's long history in McKinney began 14 years ago in 1995, when its Dallas-based subsidiary outgrew its space. "We wanted to relocate that subsidiary," says Mark McAndrew, chair and CEO. "We were leaning toward Oklahoma City, where we already had ample office space, but the city of McKinney really made us a nice offer of incentives." That deal resulted in the construction of a 150,000-square-foot office building. More recently, an incentives package from the state and the city facilitated another 150,000-square-foot expansion for the relocation of the corporate headquarters from Birmingham, Alabama, and consolidation of data center functions from Waco, Texas, as well as Oklahoma City and Birmingham.

McAndrew says McKinney's location on the edge of the Dallas metro area encourages employee recruitment from outlying areas. He also notes that the cost of labor and business is much less than other places with a concentration of insurance companies. "Much of our competition is based in New York and Connecticut," he says. "When I look at their expenses, our expense ratio is about half. By locating here, we can be competitive in the marketplace but still have a very acceptable profit margin in our products."
In Irving, Chris Wallace, president of the Greater Irving-Las Colinas Chamber of Commerce, notes that over the last eight months, technology, energy, oil and gas have been very successful sectors, with eight new, expanded, or retained technology companies and five new or expanded energy companies. Projects include TXU Energy, which added approximately 850 employees at its new 247,000-square-foot headquarters; OptimEnergy's new 61,339-square-foot office, with 245 new hires; and 167 jobs with Pioneer Natural Resources' 293,000-square-foot expansion.

One of the secrets to Irving's recruitment success is the proximity to Dallas-Fort Worth Airport. Irving is also home to the Las Colinas Development, a master-planned community replete with corporate tenants, including 32 Fortune 500 companies and the global headquarters of Exxon Mobil, Fluor Corporation, Kimberly-Clark, and Commercial Metals. "We lean on our already established companies to help us attract others," says Wallace. Accessibility, one of the area's selling points, will become even more convenient when a light rail system, currently under construction and slated for a December 2011 completion, connects Las Colinas to the airport and downtown Dallas.

Attention to "speed-to-market" details has garnered the attention of the city's larger clients who need quick and efficient transitions into their new facilities. "We were able to recruit Fluor from southern California to Irving three years ago," says Wallace. "They wanted their building finished in eight months from an empty piece of land; ground to move-in. All of the directors that impacted the project were called around the table at once - the transportation, permitting, building inspector, water guys, the fire marshal, anyone involved with planning, grading, building, or move-in." He says gathering the principals together created a streamlined process that continues today.


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