Texas Rising

River City Reels in Business

by Bruce Wright

San Antonio is still the reigning queen of Texas tourism, and it can still count on its military installations for an economic boost. But today, it’s also a rising business powerhouse. High-profile company relocations and new manufacturing initiatives have made the River City a place where the world does business.

Local Government Tools that Made the Difference

for San Antonio

Mario Hernandez, president of the San Antonio Economic Development Foundation, offers the following advice for other communities and economic development officials that want to beef up their economic development efforts:

  • Educational and training institutions must be a primary part of the economic development team;
  • Industry sectors such as high-technology firms must band together to jointly recruit high-demand professionals, such as engineers and programmers;
  • Training programs unique to particular industries should be established for junior and senior high school students; and
  • Quality-of-life factors become more important as employers recruit from outside of their market. Economic development professionals should focus not only on job-producing investments but also on community assets.

About 20 percent of the projects that locate in San Antonio receive some sort of incentive. The city of San Antonio encourages business development through:

  • tax incentives;
  • regulatory reductions;
  • financing; and
  • aid with employee training.

Read more on taxes and economic development incentives by visiting the Comptroller’s Local Government Assistance and Economic Development Division Web site or by calling (800) 531-5441, ext. 3-4679.

Toyota Motor Corp. officials and San Antonio Leaders celebrate the opening of the Toyota manufacturing plant.
Toyota Motor Corp. officials and San Antonio Leaders celebrate the opening of the Toyota manufacturing plant.

“San Antonio is having tremendous success in recruitment from outside of our area,” said Mario Hernandez, president of the San Antonio Economic Development Foundation. “We’re [attracting], on average, two or three new companies a month.”

And San Antonio’s successes echo across the area through the hard work of nearby communities. Just northeast of the city, Lacks Stores Inc. is building a 300,000-square-foot distribution center and 50,000-square foot retail center in the fast-growing city of Schertz that will bring 277 jobs to this community of about 19,000.

The Toyota factor

A lot of this activity is due to San Antonio’s 2003 selection as the site for a $1.3 billion Toyota manufacturing plant. The plant, which builds Tundra pickup trucks, employs about 2,000 people in the San Antonio area.

“We’ve already seen 34 other companies come to San Antonio because of Toyota,” Hernandez said. “And they employ more [people] than Toyota does, about 2,700.”

The plant’s impact extends beyond the automotive industry, said Hernandez. “Toyota really put us on the map,” he said. “That really focused the attention of corporate America. Our image and profile have dramatically changed. Industry across the board has taken notice of San Antonio.”

Some of the nation’s largest companies, such as AT&T and Valero Energy Corp., have placed their corporate headquarters in San Antonio. The city also has emerged as a prime location for corporate data centers, which store data and process transactions, and for “back office” facilities, which handle administrative functions such as accounting and purchasing for major companies.

In January 2007, Microsoft announced it chose San Antonio to host a $550 million data center, and Lowe’s Home Improvement is building another.

“We’re seeing a lot of activity from data centers right now – there’s a tremendous boom,” Hernandez said.

He also noted that Washington Mutual has selected San Antonio for a 4,200-employee operations center.

The SA advantage

San Antonio’s success is no accident, according to Hernandez.

“We’re a city that has been very aggressive in looking for job-producing investments,” he said. “We’ve also been very aggressive in providing incentives.”

The city of San Antonio reports that it encourages business development through incentives such as tax breaks, regulatory reductions and aid with employee training.

“The city has invested very heavily in its infrastructure, so we’re very well prepared for business and for growth,” he said.

Data centers, for instance, want efficient, low-cost utilities. San Antonio’s city-owned utility has a 20 percent reserve capacity and offers competitive rates, Hernandez said.

The cost of living is another factor.

“Historically, we’ve been 8 to 10 percent below the [average] cost of living,” Hernandez said. “Corporate America focuses a lot of its attention on cost factors.”

San Antonio’s people may be its biggest advantage.

“This is a very young community – 30 percent of the population is 17 or younger,” said Hernandez. “When a company is looking for a site, particularly for back-office operations, which are very labor-intensive, they look for places like San Antonio that add people to their labor force year in and year out.”

And San Antonio offers its 125,000 college students plenty of opportunities to prepare for their careers.

“UTSA (University of Texas at San Antonio) is the fastest-growing campus in the UT system, with about 28,000 students,” Hernandez said. “And we’ve got one of the largest junior college systems in the country. There’s a tremendous amount of trained workers coming out of our universities.”

For more information on San Antonio’s economic development success and strategies, visit the
San Antonio Economic Development Foundation Web site at www.sanantonioedf.com or call (800) 552-3333.