From the Houston Chronicle: Texas Medical Center's multibillion-dollar research campus opens, ushering in a new era

The Texas Governor and the city of Houston continue to work together the economic interests of the local area by enhancing the Texas Medical Center. 

- Click here for the article.

The first piece in a long-anticipated multibillion-dollar biomedical research campus opened Thursday in the Texas Medical Center, setting the stage for what could become a game-changing life sciences hub generating $5.4 billion in annual economic impact and tens of thousands jobs in Houston.

Houston has struggled to compete with larger life sciences magnets in San Francisco, Boston, San Diego and Raleigh-Durham, and the 37-acre Helix Park campus along Old Spanish Trail, a project nearly a decade in the making, represents a major milestone in helping the city gain momentum.

“When you looked at the incredible business and economic platform the state of Texas has, there was one glaring deficiency, and that is to have a massive hub for life sciences,” Gov. Greg Abbott said at the event.

Economic development officials think Helix Park will help to fill that gap, becoming a launch pad for a more mature life science industry in Texas.

The project is also the first time TMC, University of Texas M.D. Anderson Cancer Center, Texas A&M University Health Science Center and UTHealth Houston have collaborated to build and finance a shared space to house their researchers under one roof.

“We've never really had a place where all of us felt like it was ours,” Bill McKeon, president of TMC, said in an interview. Shared laboratory spaces, plus a plethora of communal areas and coworking/office spaces, are meant to encourage researchers to mingle and collaborate.

From the Galveston Daily News: Talk resumes about redeveloping grain-elevator land at Port of Galveston

For our look at local politics and economic development.

- Click here for the article.

Grain elevators that have been towering above Harborside Drive near Pier 25 for about 40 years are taking up space that might be used for more profitable endeavors, one influential port leader argues.

Jim Yarbrough, a member of Wharves Board of Trustees, which governs the public docks, has been arguing since at least 2016, when he was mayor, that the grain business has gotten soft and tenuous and waterfront leaders should consider whether there’s a higher and better use of that port land.

The port has been shipping grain from elevators for almost 150 years. The first grain elevator went up in 1875, then blew up in 1977 when a spark ignited grain dust, killing about 15 people.

“At one time, the grain elevators produced a lot of jobs and money,” Yarbrough said. “Over time that has dwindled down to not much. It doesn’t produce that many jobs.”

Among the first questions Yarbrough asked when he joined the board was when the lease agreement for the property expired, he said.

“It takes the port a while to move and do things,” Yarbrough said. “My hopes were to implode or get rid of the grain elevators.”

__________

- Galveston Wharves Board of Trustees. 

From the Dallas Observer: DENTON USED TO BE KINDA COOL. THEN IT PAID $8 MIL FOR A BUC-EE'S.

I though this served as a good reminder that cities are primarily economic units. I can't speak to the wisdom of this deal . . .

- Click here for the story.

. . . but it would be interesting to look at how Buc-ee's has developed a strategy which persuades local cities to provide tax incentives - and infrastructure - for it to build stations there and whether these turn out to be worthwhile economically. This shouldn't stop with Buc-ee's, Walmart and many other do the same.

- Click here for Denton OKs incentives for Buc-ee's Travel Center.

The battle over Buc-ee’s raged deep into the night at City Hall, which was packed with residents for and against the massive, trendy travel center. Under the proposal, Buc-ee’s would provide more than $5 million in infrastructure to the site on the west side of Interstate 35E between Loop 288 and Wind River Lane.

Neighbors fear congestion, noise pollution, light pollution, and other issues that they believe could harm lifestyle and property values. About 20 speakers sounded off to council members for and against the project. Opponents said it would bring low-paying jobs, and that tax breaks would add insult to injury.

Supporters said Buc-ee’s is a high quality operation that would bring visitors, and provide property and sales tax revenue. The proposed travel center would have 96 gas pumps and about 50,000 feet of retail space.

On state and local economic policy

Both of these articles are form Governing Magazine. The first investigates whether private efforts to spur economic development are preferable to public efforts and finds mixed results. The second questions a standard line made about cities, that they are economic entities oriented towards growth, but growth can upset existing power structures - so there can be resistance to it.  

- Welcome to Jobs Inc., Where States Have Little Say in Economic Development.

Go down the list and every apparent advantage of privatization seems to have an equal and opposite downside as well. Proponents claim that private economic development corporations are more responsive, but looser rules open up the possibility that they’ll cut corners in dubious ways. And they may not be more nimble at all, since new entities add their own layers of bureaucracy to the mix. The privatized entities typically are more flexible when it comes to managing their own personnel, but there have already been examples of staff being grossly overpaid as a result.

In short, while it might make sense to give development officials a leash longer than is the norm for government work, that approach offers no guarantee of success. “There is no evidence that privatizing economic development either helps or hurts economic development,” Timothy Bartik, an economist at the W.E. Upjohn Institute for Employment Research, says flatly.

- Do Cities Really Want Economic Development?

. . . economic struggle can be a cultural unifier in a community that people tacitly want to hold onto in order to preserve civic cohesion.

Jane Jacobs took it even further. As she noted in The Economy of Cities, “Economic development, whenever and wherever it occurs, is profoundly subversive of the status quo.” And it isn’t hard to figure out that even in cities and states with serious problems, many people inside the system are benefiting from the status quo.

They have political power, an inside track on government contracts, a nice gig at a civic organization or nonprofit, and so on. All of these people, who are disproportionately in the power broker class of most places, potentially stand to lose if economic decline is reversed. That’s not to say they are evil, but they all have an interest to protect.

From the TSHA: Historic World War II pipelines sold

The Texas State Historical Association tells us that on this day in 1947 the Big Inch and Little Inch pipelines were sold by the US government to a private company - Texas Eastern Transmission Corporation, which was headquartered in Houston. Both pipelines also connected Houston with the northeast, which helped solidify Houston as the center of the oil and gas industry.

This might be an interesting read for both 2305 and 2306 students. 2305 students should consider the interplay of interests involved in the construction of the pipeline before and during WW2, and the decision about what to do with the pipeline once the war was over. 2306 students ought to think about the role government policies played in the development of the local area and the degree to which local power brokers were able to ensure that these policies benefited them, as well as the local area.

WW2 was very good for the local economy and the business interests located here.

Here's the note sent out by the TSHA:

On this day in 1947, the Big Inch and Little Big Inch, two strategic pipelines laid during World War II from East Texas to the Northeast, were sold by the U.S. government to a private company. Secretary of the Interior Harold Ickes realized as early as 1940 that shipment of petroleum to the Northeast by tankers would be impossible in time of war because of German submarines. In 1941, at Ickes's urging, oil industry executives began to plan the building of two pipelines. One, twenty-four inches in diameter, called the Big Inch, transported crude oil. The other, twenty inches in diameter, called the Little Big Inch, transported refined products. The Big Inch ran from Longview to Southern Illinois, thence to Phoenixville, Pennsylvania. Twenty-inch lines continued from there to New York City and Philadelphia. The Little Big Inch began in the refinery complex between Houston and Port Arthur and ended in Linden, New Jersey. Together the pipelines carried over 350 million barrels of crude oil and refined products to the East Coast before the war in Europe ended in August 1945.

And from the TSHA entry on the Big Inch and Little Inch Pipelines:

After the war, the pipelines became the focus of a clash of interest groups, with the oil and gas industry wanting to convert them to natural-gas pipelines and the railroad and coal industries opposing this. The Surplus Property Administration, given the task of determining future use, hired an engineering firm to study options; this study recommended that the pipelines be converted to natural-gas transmission. At the same time the United States Senate held hearings on their future use. In January 1946 the SPA recommended that first preference should be to continue use as in the war to ensure availability of the lines in a national emergency. However, by June 1946 the War Assets Administration announced an auction for the lines. All bids were ultimately rejected because no defined use preference had been established. After a strike by coal miners in November 1946 the WAA solicited bids to lease the lines, with Tennessee Gas and Transmission Company awarded a lease for natural-gas use to run from December 3, 1946, to April 30, 1947. Once it was established that the lines were viable for natural-gas transmission, the WAA again offered them for auction. The high bid of $143,127,000 came from a new corporation, Texas Eastern Transmission Corporation, formed by George Rufus and Herman Brown and their partners. The purchase was final on November 14, 1947. As of 1993, Texas Eastern had its headquarters in Houston.

From the Atlantic: Here Are the 10 Biggest U.S. Cities by GDP—And How They've Grown Since 2009

According to the story, Houston's GDP grew quicker than that of any of the ten largest cities in the nation since the end of the recession.

Here's proof:



But Houston is still in the middle of the pack in total GDP:



Click here for the source of those numbers.

Learning from mistakes in Houston

The Atlantic tries to figure out what drives job growth in Houston - which is by far the largest than in any other city as you can tell from this graph:


Its link to the energy play a big role, but they highlight Houston's ability to learn from past mistakes. This is especially true of its ability to not repeat what lead to the recession Houston suffered from 1982 to 1987.

First, oil companies did not lay off too many workers after the 2008 crash.

Houston's energy sector is remarkably old -- the average age is over 50 -- and companies were nervous about laying off too many veteran workers before they had time to pass their skills down to the younger generation. Houston's energy demographics "helped to moderate energy industry job losses," leading to fewer job losses overall.

Second, policies were put in place to ensure that a housing bubble would not develop.

The 1980s also taught Houston a lesson about real estate. Between 1982 and 1987, Houston suffered "one of the worst regional recessions in U.S. history," Jankowski said. The metro area lost more than 220,000 jobs -- one in seven in the region -- but added nearly 188,000 housing units, as developers ignored the signs that demand had plummeted. The results were disastrous and scarring for the real estate industry.

Houston avoided over-building problems in this recession by tightening lending and home construction in the early years of the crisis. Houston didn't really have a housing bubble in the 2000s. The ratio between its median house prices and median household incomes peaked at 2.7 in 2006. By comparison, a typical Miami family would have to spend five-and-a-half years of their total income to afford an average home in the city by 2006. In Riverside, it would take nearly seven years. So as housing values cascading all across along the Sun Belt -- by 40 percent percent in Miami and 44 percent in Riverside -- they merely dipped about 2 percent in Houston.

Houston GDP

And why not add data for the local area?

According to the Bureau of Labor Statistics, the GDP for the Houston-Sugarland-Baytown area in 2011 was:

$419 billion.

It's the 5th largest in the nation (behind NYC, LA, Chicago and Washington DC - and just ahead of Dallas)

For detail:

- Houston has fatest growing GDP of large metros.
- BEA: Growth Continues Across the Nation’s Metropolitan Areas.

Two local items from Houston

1 - Houston's mayor announced two related projects. One designed to reforest Memorial Park - which was hit hard by Hurricane Ike and the ongoing drought - and address traffic issues in the Galleria area by creating "Bus Rapid Transit Lanes" in the median on Post Oak.

Funding these projects will be augmented by expanding the Uptown Tax Increment Reinvestment Zone 16 by adding almost 1,800 acres to it.

- From yourhoustonnews.
- From the Chron.

Here's a map of the uptown TIRZ.




2 - HISD has announced the creation of two magnet schools "specializing in two key Houston industries: health care and energy. Both are set to open in the fall. The middle school will involve a collaboration with Baylor College of Medicine, and the high school will be a partnership with the Independent Petroleum Institute of America."

Cities are primarily economic entities, and these two efforts seem designed to enhance the area's economic focus on the energy and health sectors.

The metro goods to services ratio

This is a measure of which cities primarily provide services and which primarily produce goods. There's no detail about this data, so I don't know what to make of it, but we can see how Houston stands apart from other areas in the nation. We still make stuff - or more accurately, refine stuff.