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Home My WebLink AboutAlliance Texas updateStrategic Advantages Town of Westlake April 5, 2013 Regional Growth & Transportation FW CBD 20 min. DFW Airport 20 min. 17,000 ACRES, MASTER PLANNED Overview Denton 20 min. Strategic Advantages AllianceTexas Corporate Base DEVELOPMENT STATISTICS $7.16 billion invested  $36.4 billion economic impact  31 million+ SF developed  240+ corporate residents  65+ companies listed on the Fortune 500, Global 500 or Forbes’ Top List of Private Firms  28,000 employees  7,300+ homes built Overview ECONOMIC ENGINE TO NORTH TEXAS Strategic Advantages Automotive Consumer Goods/ Services Pharmaceutical/ Health Care Logistics Aerospace/ Aviation Electronics Corporate Residents INDUSTRY CLUSTERS Strategic Advantages NATIONAL ECONOMY: CURRENT HOT ISSUE Increased vacancy rates, which now range from 8% for multifamily housing to 18% for office buildings, and falling rents, which have declined 40% for office and 33% for retail since 2007, have exerted a powerful downward pressure on the value of commercial properties. The problems facing commercial real estate have no single cause. Real estate bubble inflates values Recession undermines what would otherwise have been good deals Tightened credit and regulatory standards constrain refinancing of viable loans Between 2010 and 2014, about $1.4 trillion in commercial real estate loans will reach the end of their terms. Nearly half are at present “underwater” – that is, the borrower owes more than the underlying property is currently worth. Commercial property values have fallen more than 40% since the beginning of 2007. Source: TXP COMMERCIAL REAL ESTATE Strategic Advantages NATIONAL ECONOMY: GDP will remain positive for 2010, but real “recovery” won’t happen until at least the second half of the year – double-dip could happen. Solid job creation will follow demand growth that isn’t stimulus-driven – can’t happen without credit resolution. Interest rates unlikely to rise until recovery is firmly in place. Economic recovery will almost certainly bring inflation acceleration, although property values are countervailing force Rising interest rates curtail growth, depress tax revenues Deficit/debt impact? Longer-Term Outlook (Next Five Years) Best Case – back to traditional model: global recovery leads to export-driven growth (lower dollar and new tech/products) that allows job creation and creates overseas markets for investment. Worst Case – some version of stagflation: debt yields inflation, causing interest rates to rise sharply and growth to be stifled. Best Case Requires Investment to Support Growth Source: TXP CONCLUSIONS Strategic Advantages TARRANT COUNTY CONTEXT Local recession is over, at least technically. Some job growth and uptick in local consumer spending, but well off prosperous pace Local real estate also will lag recovery in the rest of the economy. Overcapacity has been addressed on development side, but other shoe has yet to fall on values, especially for commercial space. Resetting of real estate values is crucial to resumption of flow of capital – better understanding of collateral and working off excess inventory will set stage for future investment. Job creation can’t really begin to accelerate without new investment – along with everything else, there is too much uncertainty on both economic and public policy front at this point. Look for job growth to be positive for 2010 Slow growth over next five years consistent with population Confidence and capacity to spend are slowly recovering – expect about another year before balance has been restored. Recovery is U-shaped at best. OVERVIEW Source: TXP Strategic Advantages TARRANT COUNTY ECONOMIC TRENDS ECONOMIC STRUCTURE IS CHANGING: Less Production Consumer Emphasis Change in the Number of Tarrant County Jobs: 4Q-04 to 4Q-09 -10,913 2,594 5,274 -1,724 5,948 25,528 13,050 -2,298 1,785 2,327 Production (Agr/Mining/Const//Mfg) Wholesale Trade/Transp/Warehousing Finance/Real Estate Information/Utilities Professional Services Health Care/Ed Services Retail/Hospitality/Entertainment Management of Companies/Admin Services Other Services Public Sector Source: TXP Strategic Advantages TARRANT COUNTY ECONOMIC TRENDS SLOW GROWTH/DECLINE IN THE BEST PAYING PRIMARY JOBS 2009 Average Hourly Wage Job Growth From 4Q04-4Q09 Mining/Oil & Gas Extraction $62.77 58.1% Professional Services $31.90 20.2% Manufacturing $31.12 -11.9% Management of Companies $30.94 -28.0% Finance & Insurance $30.41 15.5% Utilities $29.89 10.1% Public Sector $29.63 9.5% Information $27.66 -11.8% Wholesale Trade $27.55 1.4% Transportation & Warehousing $25.23 3.9% Healthcare $22.28 18.5% Construction $22.09 -7.1% OVERALL AVERAGE $20.87 5.8% Education Services $18.84 19.8% Real Estate $18.06 4.8% Administrative Services $16.86 -2.3% Retail Trade $13.50 1.9% Agriculture $13.45 44.4% Other Services $13.41 8.6% Arts, Entertainment, & Recreation $10.32 38.6% Accommodation/Food Service $7.95 12.1% Source: TXP Strategic Advantages ECONOMIC IMPACT OF TRANSPORTATION Assumption in long-term forecasting is that region builds “adequate” transportation capacity Failure to build new transportation infrastructure has two general negative consequences: Reduction in baseline forecast; Foregoing possible economic development opportunities that occur due to enhanced capacity. Congestion is a good indicator whether or not local transportation capacity is adequate. CONNECTION BETWEEN TRANSPORTATION AND ECONOMIC GROWTH Source: TXP Strategic Advantages ECONOMIC IMPACT OF TRANSPORTATION Industry competitiveness via improved access to markets, materials, and labor; Household welfare – through access to employment/economic opportunities and reduced transportation costs; Travel capacity – through facilitation of both individuals and firms to and from the area; Reduced costs associated with congestion and traffic accidents; Direct employment, both for construction and transportation itself GENERAL AREAS OF IMPACT Source: TXP Strategic Advantages ECONOMIC IMPACT OF TRANSPORTATION Decrease production and transportation costs Facilitate industrial growth Enhance inter- and intra-regional competitive position Improve workforce and business productivity Enhance labor force prosperity and opportunities Maintain competitive position vs. other regions of nation and world Strengthen the local tax base IMPLICATIONS FOR TARRANT COUNTY Source: TXP Strategic Advantages CONCLUSIONS Tarrant County remains one of the most attractive regions of the country. Continued in-migration population growth anticipated, although at slower pace Community is very competitive on costs, quality of life, entrepreneurial infrastructure, and labor force availability and capacity A number of forces are constraining production-related job growth. Globalization – markets and production costs Substitution of capital/technology for labor “Commoditization” of many products Creates heightened competition for what remains in terms of relocation/expansion. Government challenged for foreseeable future. Multi-billion State shortfall. Federal stimulus coming to an end Local jurisdictions challenged to use conventional financing LONGER-TERM Source: TXP Strategic Advantages SUMMARY Best case for the economy – back to the future: global recovery leads to export-driven growth (lower dollar and new tech/products) that allows job creation and creates overseas markets for investment. Better prospect of sustainable growth Better chance of higher paying jobs Transportation infrastructure is an essential element of the above. Industry competitiveness via improved access to markets, materials, and labor Substitution of capital/technology for labor State and Federal Government will struggle to provide adequate funds. Translation: creative application of all tools available to put needed infrastructure in place. Best positions region for limited external funding Maximizes local decision-making/control KEY POINTS Source: TXP Strategic Advantages REGIONAL GROWTH Dallas-Fort Worth: 4th Largest Metro Area in U.S. 12th Largest Metropolitan Economy in the World 1st in Population Growth (among U.S. Cities) in 2008 Today, the population is more than 6.5 million By 2035, the population will be 10 million Strategic Advantages REGIONAL GROWTH Fort Worth: 17th Largest City in the U.S. 2nd Largest City in the Metroplex 1st in Population Growth (in DFW Metroplex) in 2008 Today, Fort Worth’s population is 725,000 Since 2000, Fort Worth’s population has increased 34.7%. Strategic Advantages NATION’S LARGEST METROPOLITAN AREAS Metropolitan Statistical Area July 1, 2008 Percent Change New York-Northern New Jersey-Long Island, NY-NJ-PA 19,006,798 0.4% Los Angeles-Long Beach-Santa Ana, CA 12,872,808 0.7% Chicago-Naperville-Joliet, IL-IN-WI 9,569,624 0.8% Dallas-Fort Worth-Arlington, TX 6,300,006 2.4% Philadelphia-Camden-Wilmington, PA-NJ-DE-MD 5,838,471 0.3% Houston-Sugar Land-Baytown, TX 5,728,143 2.3% Miami-Fort Lauderdale-Pompano Beach, FL 5,414,772 0.4% Atlanta-Sandy Springs-Marietta, GA 5,376,285 2.2% Washington-Arlington-Alexandria, DC-VA -MD-WV 5,358,130 1.0% Boston-Cambridge-Quincy, MA-NH 4,522,858 0.7% Source: US Census Bureau, March 2009 (ranked by July 1, 2008) Strategic Advantages Population Growth 2005 - 2030 Source: NCTCOG & City of Fort Worth Legend 500 – 2,000% 100 – 499% 50 – 99% 10 – 49% 1 – 9% No Change City Limit Strategic Advantages NORTH TARRANT EXPRESS SEGMENTS Strategic Advantages ALLIANCETEXAS GLOBAL LOGISTICS HUB FOR 3RD STRAIGHT YEAR, ALLIANCE GLOBAL LOGISTICS HUB #1 FTZ IN U.S. Top U.S. General Purpose Foreign Trade Zones (FTZ) By Value of Foreign Goods Admitted 1.Fort Worth/Alliance (TX)------------------------------------$5.357 billion 2.Newark/Elizabeth (New Jersey)--------------------------$4.060 billion 3.Harris County (TX)-------------------------------------------$3.775 billion 4.Port Hueneme (California)---------------------------------$3.063 billion 5.El Paso (TX)---------------------------------------------------$1.200 billion Strategic Advantages UNIQUE CORPORATE ENVIRONMENT Circle T Ranch Strategic Advantages Retail WESTLAKE CORNERS Strategic Advantages DEMOGRAPHICS/MARKETING FACTS Alliance Population Within 7 Miles 215,000 Within 10 Miles 414,000 Available Lots 9,000 Additional Population within 5 years 27,360 Income $80,000 Daytime Employment 40,000+ School Districts Keller – Current 33,000 Enrollment Keller – Future (2020) 40,000 Enrollment Northwest – Current 15,000 Enrollment Northwest – Future (2030) 90,000 Enrollment Traffic Counts I-35W by Hillwood Office 75,000 Cars per day I-35W by Alliance Town Center 100,000 Cars per day SH 170 40,000 Cars per day US 377 22,000 Cars per day Other Traffic Drivers Cabela’s 4,000,000 Visitors Annually Texas Motor Speedway 500,000 Visitors Annually Fort Worth Alliance Airshow 150,000 Visitors Annually Deloitte 40,000 Visitors Annually Pilot Training 12,000 Visitors Annually Strategic Advantages DEMOGRAPHICS/MARKETING FACTS Westlake Corners – 3 miles Population 30,000 Daytime Population 20,000 Income $93,000 Traffic – US 377 22,000 Traffic – SH 170 40,000 Alliance Town Center – 5 miles Population 190,000 Daytime Population 40,000 Income $75,000 Traffic – I-35W 100,000 Sq. Ft. of Retail 800,000 Lone Star Crossing – 5 miles Population 100,000 Daytime Population 40,000 Income $80,000 Traffic – US 377 80,000 Traffic – SH 170 35,000 Alliance Crossing – 4 miles Population 58,000 Daytime Population 30,000 Income $70,000 Traffic – I-35W 75,000 Traffic – Westport 13,000 Strategic Advantages AREA DEVELOPMENT MAGAZINE - SEPTEMBER 2009 Polling of Corporate executives Real-time data on: why companies relocate, where they relocate and specific factors leading to those relocations Strategic Advantages RESPONDENT’S TITLE Strategic Advantages DO YOU THINK THE ECONOMY WILL IMPROVE SIGNIFICANTLY? Strategic Advantages TYPES OF NEW DOMESTIC FACILITIES TO BE OPENED (AS PERCENTAGE OF TOTAL NEW DOMESTIC PROJECTS) Strategic Advantages TYPES OF INCENTIVES CONSIDERED MOST IMPORTANT WHEN MAKING A LOCATION DECISION Strategic Advantages Thank You