Fort Worth trails other cities in metroplex in attracting new corporations, data show
See full KERA News article by Seth Bodine here.
A Fort Worth Report analysis of Dallas Regional Chamber data compiled from news articles shows 44 corporations have either expanded operations, added new facilities or relocated their headquarters to Fort Worth since 2010. Compared with the total number for North Texas, that accounts for 8.3% of all announcements since 2010.
In total, 530 corporations announced big business moves to the region between 2010 and January 2022, according to the Dallas Regional Chamber’s data.
“That is a little bit of a concern if Fort Worth isn’t really capturing its share of business expansion projects,” said John Karras, vice president of business development for TIP Strategies, a strategic consulting firm hired by the city in 2017.
Fort Worth ranks low compared to surrounding cities in company relocations and expansions since 2010
Fort Worth makes up just over 8% of the 530 companies that relocated or expanded to North Texas in the last decade.
If a city’s residential development outpaces its economic growth, it risks becoming a suburb. Karras and his team at TIP Strategies warned officials that if Fort Worth doesn’t keep up with economic growth, it could become a suburb of Dallas.
“To be a thriving community, you really need a mix of residential employment and commercial investment as well,” Karras said. “I think that there’s less of a risk of (becoming a suburb) now, but that’s still something that should be at the forefront of local leaders’ minds as they make decisions from everything, like land use and infrastructure.”
Balanced development creates a balanced tax base so the city can provide amenities like proper infrastructure, parks, and fire and police departments, Karras said.
City Council approved an updated version of the economic development plan in February, according to previous reporting by the Fort Worth Report. Karras describes the economic development environment in Texas as competitive because of tax advantages, affordability and the state’s central location.
Fort Worth also has the least amount of funds dedicated for “closing deal money” compared with other cities in the area to financially lure companies to relocate to the area, according to an informal report issued to city council. The council approved using Tax Increment Financing Districts a portion of money dedicated to improving infrastructure in a certain area for economic development.
Attracting projects to Fort Worth
Cowtown was a natural choice for Western footwear company Ariat to establish its latest U.S. regional distribution hub and corporate office in 2020. Ariat CEO Beth Cross said part of the choice is geography.
“It’s completely justified by how important that part of the world, that part of the country is for us,” Cross said. “So it was, without a doubt, critical to the business. It’s really consistent with the brand values.”
Cross told the Report Ariat received some incentives from the city, which she could not share, as well as a $750,000 grant from the governor’s office from its Texas Enterprise Fund. This fund allows companies considering Texas for a project to apply for “deal-closing” money.
Fort Worth was on the shortlist to land an attractive, cutting-edge company — electric truck maker Rivian. Fort Worth and the state came up with an incentive plan valued at about $500 million, but the plant ended up in Georgia following a full-court press from that state.
Electric battery company Schumacher announced its headquarters relocation to Fort Worth in July 2021, consolidating with its distribution operation in Dallas. CEO Mickey Leech said the move near the American Airlines Center has been beneficial in finding workers but when the company reached out to the local community for assistance with moving into this new facility, nothing “panned out.”
“Our landlord helped us find a great space that we can do everything under one roof,” he said. “And we’ve had no interaction from the city of Fort Worth. We’ve had no interaction from the business community.”
Schumacher Electric also received incentives from the state’s Texas Enterprise Fund but did not accept them, Leech said.
When a company wants to relocate, it often consults a site selection consultant and gives them specifications for what the business is looking for, such as acreage of land and building size, said Robert Sturns, the economic development director for the city of Fort Worth.
Then, the site selector sends that information across the country and communities like the City of Fort Worth respond and compete with other cities for the company. The process remains a secret under a nondisclosure agreement until the company chooses Fort Worth and is presented to City Council for approval, Sturns said.
“Typically we will have everything kind of buttoned-up and we’re 99% sure that the deal will go forward before we take something to council,” Sturns said.
The city of Fort Worth has two main incentives: Chapter 380 and tax abatements. Not all companies want incentives when relocating, Sturns said.
Chapter 380 grants reimburse businesses for taxes it has already paid to Fort Worth based on how well they stick to their incentive agreements. Companies have to submit documentation yearly to show they met the promises in the agreement. Incentives can be revoked or reduced if a business does not meet the requirements.
The city has investment requirements, job creation requirements and average salary requirements for a company to be eligible to receive incentives from the city of Fort Worth, Sturns said.
The pipeline for companies remains robust, Sturns said. About 40% of incentive projects are in the manufacturing, industrial and logistics industry, and he sees that as a space to grow. But interest in office space is down, he said.
“People are still trying to determine, you know, kind of going back to work schedules, and what that looks like, and what their needs are going to be,” he said.
Growing jobs vs. relocating
Firms up to 1-year-old accounted for 29,979 Fort Worth jobs in 2019, according to an annual report from Sparkyard, an organization that supports entrepreneurship in Fort Worth.
The Sparkyard analysis is informed by research from the philanthropic organization the Kauffman Foundation which found that, between 1980 and 2005, all net new job creation in the United States came from firms less than five years old.
Cameron Cushman, assistant vice president for innovation ecosystems at the University of North Texas Health Science Center, said relocations can do only so much for the local economy.
“One of the dirty little secrets of economic development is that a lot of times when these companies move from one city to the other, they’re not actually creating jobs,” Cushman said. “They’re just shifting them from one place to another. A startup, when you think about it, can only inherently create jobs.”
The city has recently added an entrepreneurship and innovation committee, led by District 7’s Leonard Firestone, to discuss ways to grow startups and small businesses.
The city is eyeing tech as an industry that could see growth and is partially funding an incubator program focusing on physical health technology, according to past reporting by the Fort Worth Report. By growing the industry from the ground up, it could help the city attract bigger companies that need a large, specialized workforce.
“You kind of have this chicken and the egg thing,” Sturns said. “You’re trying to recruit the workers to recruit the companies because they’re looking for the workers, but you can’t get the companies if you don’t have the workers.”