June 7, 2013
Message from the Chief Executive Officer
So much for the shorter e-newsletters I mentioned a month ago….
This is the first week of summer vacation for most students and for some parents as well. The last few weeks of the school year and the first few weeks of summer seem to always be more hectic than normal, at least it is in the Garza household. Soccer, t-ball, band and other activities are finally over, but now come the vacation bible school, art classes, swim lessons and more!
For many of us, keeping kids “busy” is important. It keeps them from idling around or worse.
Harlingen has been busy the past few weeks as well. City elections, university merger/medical school legislation, trade shows, training sessions, new Board officers, interstate highway designations and much more can keep us busy.
The danger in keeping busy, is that one ultimately needs to remember that all the busy work needs to turn into something productive. I always tell my kids don’t just keep busy, do something.
Harlingen is doing something. That statement is very broad and general, but as you know, I’ll elaborate on it. As an example, a good measurement of growth in the commercial sector is a look at vacancy rates for industrial space. We have about 30,000 SF of Class A industrial space available at this time. I mentioned in a previous newsletter that over the last eight months, new businesses have absorbed 260,000 square feet of industrial space.
Another measure used by many of us to gauge growth is a look at building permit activity. In the month of April, the Rio South Texas region had slightly over $31 million in the value of commercial permits, according to numbers compiled by the Rio Grande Valley Partnership. Harlingen alone had $16.5 million, or 53% of the total value of commercial building permits in South Texas!! Some may think, we had a good month, but if you look at the year-to-date figures, Harlingen has almost $63 million worth of commercial construction in the first four months of this year. This is about one-third of the total for the Valley. This also places us on the top of the list this year. Second to us is Brownsville at $34 million, and then McAllen at almost $32 million, who have population counts that are two or three times more than us.
This isn’t just keeping busy. Harlingen is doing something.
I was in conversations with a prominent member of the business community a few weeks ago, and he was talking about the role of the Harlingen Economic Development Corporation. His comment was very telling of what some people perceive our role to be. He said that our job was “to lend or grant money to the private sector”.
Along with other sources of revenue, we have annual sales tax revenues of nearly $4 million which are allocated to various projects, debt service, and operations. Did you know that our economy isn’t measured in the millions of dollars? It’s in the billions. We know that we have over a billion dollars in taxable retail sales, with only Brownsville and McAllen being part of that exclusive club here in the Valley. If we use per capita income figures and round off our population to 70,000, we know that the income of Harlingen is over a billion. If we start looking into wholesale trade, services, and other measurements of the economy, we know we are talking about billions, not millions. So, what does our annual revenue represent in the local economy? It represents very little. I can’t put a number on it, but I can say with certainty that it would be in the less than 1/4 of 1%, at best.
OK, so where are you going with this, Raudel? You were asking that right? Good, because if you weren’t, I guess I lost you a few paragraphs ago.
My direction is simply this: The Harlingen EDC, although perceived by many in this community to be a big influence in the economy, really isn’t in terms of cash infused into the economy. Therefore, if all we do is grant or lend our revenues on an annual basis, we will have minimal impact on the economy.
However, I don’t believe that our role is to grant or lend money to the private sector. As a matter of fact, I come from the school of thought that says that businesses should do deals because they make economic sense, i.e. they will make a profit – not because a governmental entity gave them a little bit of money. I also believe that one of the measures of a good economic developer is that one can sell his or her community assets without having to write a check. That’s a good goal to have isn’t it? Try to create an environment where businesses will grow. I think it is.
Our role is and should be to be a catalyst. To point out the obvious to those who are a fit for our economy. Our role is to market our assets. Our role is to let developers know that we have no space left and that we have numerous companies looking at our area, and that if the private sector doesn’t step up and build, we will. Because we need to create the capacity for this growth to continue. The alternative is that those companies that are a fit, will go somewhere else. And that is unacceptable to us.
Our role is to look for opportunities to provide public infrastructure that will lead to private investment. Our role is to work with partners to educate and train our workforce, at a minimal cost to us. Our role is to look at our strengths and weaknesses and find strategies that will increase one and reduce the other.
Looking back at some of the projects we have participated in thus far this year and in the recent past, this entity has been a catalyst. We will continue to be, but only if we have support from everyone in the community. To gain support, we don’t have to be in total agreement about every deal, but we certainly have to agree that the status quo isn’t acceptable. We all want higher-paying jobs for our citizens. We want a well-educated workforce. We want a better life for those who don’t have jobs, or are struggling to make ends meet.
Look for the EDC to turn down a few more businesses than in the past. We seem to have an increase in requests for funds lately. If these companies aren’t creating many high-paying jobs, provide benefits, internships, and participate in the community, as minimal factors for consideration, they will have difficulty being considered for financial assistance.
We believe that our region can compete well in terms of cost of doing business against any other area in the United States. Couple that with our proximity to international markets, we have a great story to tell.
Books can be written on some of what I touched on here, so I’ll just end it by saying that I’m generalizing. Economic development is complicated and often misunderstood. It is subject to different interpretation based on the environment in which one is familiar with. Economic developers play many different roles in communities. One of those is also to educate the public on economic development.
Class dismissed! Have a great weekend! And come next week, don’t just stay busy, DO.
News from around the Harlingen area and beyond
Manufacturing Building Available for Lease
1805 North Loop 499, Suite 110
Harlingen, TX 78550
72,000 Total SF available
24′ minimum clear height
and much more. Call the Harlingen EDC office for more information at 216-5081.