TYPE A AND TYPE B
EDC’S SPELL SUCCESS
A and B. They’re blood types. They’re personality types. And they’re two options for Texas communities selecting economic development strategies.
> The decision to become either a Type A or a Type B economic development corporation (EDC) determines what kind of projects a community’s sales taxes can be used for when targeting ways to improve business climate and quality of life. Type A sales tax revenue generally funds facilities, land acquisition and equipment, while Type B tax revenue also can support affordable housing, the construction of sports facilities and public, recycling facilities and streets, among many other initiatives.
About 125 miles northeast, Tyler is also reaping the benefits of Type B status. Tyler is an economic powerhouse in East Texas, and is home to major air conditioning equipment manufacturers Trane and Carrier, as well as Brookshire Grocery, Suddenlink Communications and the East Texas Medical Center. But like many of Texas’ fast-growing cities and towns, traffic has become a big concern. “We’ve been adding 3,500 new residents a year for the past 10 years,” says Tom Mullins, Tyler Economic Development Council, Inc.’s president and CEO. “That puts a lot of stress on our road system.”
”WE’VE BEEN ADDING 3,500
NEW RESIDENTS A YEAR”
So Tyler has made major infrastructure investments in recent years using Type B tax dollars. “Our citizens have been very supportive of it because of the way it has been used,” Mullins says.
They also like the fact that the city has delivered on the pledges it made when residents were asked to support the Type B initiative in 1995. Those included paying off existing bonds, lowering taxes and ushering in a ‘pay cash as you go’ budgeting principal. While it didn’t happen overnight, in 2012, Tyler has no debt and a 20.8 cent per $100 value property tax rate — a more than 60 percent reduction from the 53.3 cent rate in 1994-95, according to Mullins.
Among the infrastructure investments that are keeping cars and commerce moving in Tyler — and attracting more economic development opportunities — is the $14 million Earl Campbell Parkway, named after the former Longhorn and Houston Oiler football great. This new thoroughfare has provided access to land for development, including a new business and technology park. TR
> For the city of Bellmead near Waco, which established a Type A EDC in 1980, the decision to convert to Type B status in 2010 gave it more options to meet the needs of its 10,000 residents.
”OUR DOWNTOWN HAD BEEN IN SERIOUS DECLINE”
“Our downtown had been in serious decline and we wanted to create a better business environment,” says former mayor Kevin Wilson, the president and CEO of Bellmead EDC. “Comptroller Economic Development and Analysis Division representative Russell Gallahan provided a step-by-step guide through the conversion process and suggested we include a ‘contract with the voters’ to ensure the community fully understood the benefits and value the change would mean.”
The move from Type A to Type B sparked a Downtown Revitalization Project that has helped spruce up existing buildings and shopping centers and rid the town center of unsightly vacant buildings. The Bellmead EDC provided matching grants to business owners who wanted to enhance their sites with new coats of paints or nicer landscaping and has brought new businesses — and jobs — to Bellmead. A vacant gas station that had become an eyesore in the downtown area is now a revitalized hub of activity as King’s Mart.
Bellmead also received a Texas Capital Fund Downtown Revitalization grant to provide additional improvements for sidewalks and streetlights in the town center. The improvements and continued partnerships between the EDC, the city council, residents and the business community has had a ripple effect. Other new enterprises coming to the community include a Donut Palace and a Gold’s Gym Express. A new kid-friendly dental practice has opened in a former Blockbuster video store and a $6 million, 120-bed nursing care facility also has opened. And H-E-B invested $13 million to build one of the largest H-E-B Plus stores in the state, creating scores of new jobs. TR