Texas Offers Strong Incentives for Investment, Job Creation
The Texas Enterprise Fund (TEF) and Texas Emerging Technology Fund (TETF) are pillars of incentive programs that encourage innovation, investment and job creation in the Lone Star State.
Imagine earning $500 million on an initial investment of $1.8 million. That’s the powerful return that the Texas economy ““ and the city of Paris ““ can expect over the next decade from just one recent success story from the Texas Enterprise Fund.
“This creates a compelling return on investment from not only the TEF funding commitment, but also for local incentives,” says Steve Gilbert, executive director of the Paris Economic Development Corp.
The TEF investment helped Paris successfully compete against locations in South Carolina, Pennsylvania and Nebraska for a new Skinner Baking Co. production facility. The Omaha, Neb.-based company is investing $25 million to reopen a shuttered Sara Lee facility and expects to create 393 jobs. Many of those new workers will likely be former Sara Lee employees who lost their positions when that company ceased operations in Paris, Gilbert says.
It is one of many positives attributable to the TEF, which with the Texas Emerging Technology Fund are pillars of state incentive programs that encourage economic development. Through 2012, the TEF invested more than $487 million and closed the deal on projects generating more than 66,094 new jobs and more than $17.4 billion in capital investment in the state. The fund provides cash grants for projects that offer significant projected job creation and capital investment. It is used when a single location in Texas is competing with out-of-state options.
The TETF is a cash-grant program designed to help the state create jobs and grow the economy over the long term by expediting the development and commercialization of new technologies and attracting and creating jobs in technology fields. The program works through partnerships between the state, higher education institutions and private industry to focus greater attention on research, development, and commercialization of emerging technology.
Incentive programs create a strong partnership between communities and employees, says Audie Keaton, president of Skinner Baking Co.
“With a focus on moving forward, J. Skinner has partnered with the people of Paris,” Keaton says. “With a commitment to the craft of baking and providing unforgettable eating experiences, J. Skinner will continue to be an industry leader within our category and Paris, Texas, will be part of the recipe for success.”
The company supplies more than 200 million pastries and baked goods every year under its own brand name and other labels. Customers across the country include store bakeries, food service companies and distributors. The company also provides services for contract food manufacturers.
A $1.2 million TEF investment assisted in financial services and investment firm TD Ameritrade choosing its Fort Worth operation for an expansion. TD Ameritrade was aided by a $1.2 million TEF investment. The expansion is expected to create nearly 500 jobs within four years and generate an estimated $11 million in capital investment.
“We’ve experienced strong growth over the past several quarters, and we are well positioned for that momentum to continue. This project emphasizes our commitment to our associates and the city of Fort Worth. We are quite pleased that the state has recognized that commitment and invested in the expansion of our local facility through the Texas Enterprise Fund,” TD Ameritrade President and CEO Fred Tomczyk says.
For relocating companies, such incentives offset the financial risks inherent in moving to a new city, says Jeremy Hyatt, director of global public relations for HID Global. At the same time, incentives hold companies accountable to their commitment to local hiring, capital investments and other promises, such as environmentally sustainable practices and building design.
HID Global, an international leader in secure identity solutions, is building its new Global Operations Center in Austin. The $35.3 million investment, which is expected to create more than 250 jobs, was assisted by a $1.9 million TEF investment.
“The state and city incentive is an investment in companies that have the promise to improve the business climate in the state. The company must demonstrate up front a plan that provides a return on the state investment,” Hyatt says. “The city and state receive a company that commits to local recruiting and hiring and capital investment to grow a business. The result is more employed citizens and an increased revenue base. The detailed process enables the state to have confidence in the company based on future investment plans and past business performance.”