The city of Temple, Texas, is strategically located along the Interstate 35 corridor between Austin and the Dallas/Fort Worth Metroplex. In addition, it is adjacent to Fort Hood, one of the largest active duty armored posts in the US. In 2011 the Killeen-Temple-Fort Hood MSA was ranked among top five best-performing metro areas in the nation, according to the Milken Institute, which ranks metropolitan areas by how well they are creating and sustaining jobs and economic growth.

The Temple EDC wished to position the city to continue this trend through a better targeted business recruitment program. With this in mind, TIP was hired to define the top five industry categories best suited for Temple, taking into account the community’s and region’s existing assets. Additionally TIP was to provide extensive research on each target, as well as a marketing and implementation plan.

The selection of target sectors is traditionally bound to an assessment of only a few determinant factors, such as access to an available workforce, industrial sites, and incentives. Our target industry recommendations are not based solely on these issues, but also on conversations with the area’s business leaders to better understand potential opportunities and challenges that might not be readily identifiable through secondary data sources alone.

Laborshed Analysis: Employees by Zip Code
Source: TIP Strategies

To define the study area for the target industry analysis, we established the actual laborshed of the City of Temple by collecting employee zip code information from the city’s major employers. We obtained data from 11 employers on 17,958 employees or 10% of the Temple Metropolitan Statistical Area’s (MSA) non-military workforce. Employers represented various sectors including healthcare, distribution, back office, education, and manufacturing.

Using tools such as a laborshed analysis, economic base analysis, location quotients, and a shift-share analysis, a quantitative analysis was conducted to identify potential target industry sectors. The list was then filtered further using specific criteria, including location, growth, size, image, and infrastructure. The resulting list includes both existing industry clusters and aspirational targets. Each industry sector was profiled and specific niches are noted. These niches show the greatest potential for growth, pay higher than average earnings, and are sufficiently large to warrant an investment of TEDC’s resources for business recruitment. In addition, they play to Temple’s strengths and fit with Temple’s site availability.

The TEDC adopted the plan in early 2012. With the tools provided by TIP, the TEDC has augmented its marketing program, enhanced its industry research, and re-focused its business recruitment efforts.

via TMASC
Opportunity grows in the region

New TMASC report in development
On November 19, 2008, Bexar County Economic Development held its inaugural Texas-Mexico Automotive SuperCluster (TMASC) Conference in San Antonio, Texas. Bexar County created TMASC that year to leverage the changing geography of automotive assembly and automotive markets in North America. TMASC would capitalize on changes in the industrial landscape by building upon the region’s numerous global vehicle and heavy equipment manufacturers, hundreds of Tier 1 original equipment suppliers, and world-class innovative assets. This first look at the region was facilitated by an excellent benchmark study conducted by TIP Strategies, Inc.

Late last year we engaged TIP Strategies to take a look at the region again and create an updated report. The finalization of that report is currently underway. Meanwhile, here’s a snapshot of the TMASC region as we saw it three years ago.

TMASC, circa 2008
Heading into 2009, the TMASC region was home to the final assembly plants of nine global manufacturers. These plants employed more than 18,000 workers and were capable of producing almost 900,000 units per year. The region also had over 200 Tier 1 supplier plants, which employed over 133,000 workers.


TMASC, circa 2011
As of the end of last year, the TMASC Region was home to seven automotive assembly plants and parts plants, employing over 17,000 workers and capable of producing over 800,000 units. The region also contained six commercial and military vehicle manufacturing plants.

Over the last few years, TMASC’s scope has broadened to reflect the region’s additional heavy equipment and commercial vehicle manufacturing activity as well. Heavy equipment manufacturers in the region include Caterpillar, John Deere, and Manitou, which together have seven plants in the region. There are also two specialty vehicle manufacturers: Skyline, which manufactures recreational vehicles, and Frazerbilt, which manufactures emergency response vehicles.


Growth hasn’t come in the form of new plants only. In 2010, Toyota invested $100 million to add a Tacoma production line at its plant in San Antonio. Moreover, yesterday GM announced its continued expansion in the region with a new $200 million metal stamping facility at their plant in Arlington. The new operation will create 180 jobs and save GM an estimated $40 million each year is logistics costs.

Regional roll out coming later this quarter
Once the new TMASC report is finalized, we will be sharing it via the TMASC website, as well as through special presentations to selected TMASC partners throughout the region. We look forward to providing an updated vision of the region to our TMASC communities and stakeholders this quarter, and to exploring new collaborations like we did last week with the Capital Area Economic Development District committee of the Capital Area Council of Governments (CAPCOG). To schedule a presentation, please contact us. We are excited about the many opportunities 2012 will give us to increase advanced manufacturing assets and activities in the region.

Many communities and regions rely heavily upon military installations to sustain their local economies. In some cases, the presence of an installation is akin to having a corporate headquarters or an auto assembly plant. Bases are often the largest regional employer and contribute outside spending, investment, and talent. Furthermore, installations can become part of the fabric of the community, influencing everything from public education to healthcare services to housing. Although this interconnected relationship can procure significant benefits, it also makes defense communities uniquely vulnerable to shifts in resource allocation at the Federal level.

The $487 billion in spending cuts mandated by the 2011 Budget Control Act and a general shift in US global defense strategy have raised concerns in many military communities. These concerns are compounded by recent calls for a new BRAC round, likely in 2015. TIP Strategies, Inc. has worked with a number of defense communities throughout the US on economic development and workforce issues. We are currently working on two projects centered around military installations: Calhoun County, Alabama (Anniston Army Depot) and Clarksville-Montgomery County, Tennessee (Fort Campbell).

Recently, Alex Cooke, a senior consultant at TIP who has worked on many of our defense community projects, attended the 2012 Association of Defense Communities Winter Forum held in Miami. The event brought together a number of experienced public and private experts to provide insight and advice regarding the “new normal” defense communities are now facing.

Not surprisingly, the prospect of a new BRAC round was a focal point of discussions at the forum. Although the economic impact of a base on the surrounding community is not generally weighed in the BRAC process, all experts agreed that installations must demonstrate “military value” to survive. The following strategies were recommended to help community leaders ascertain the “military value” their local base represents:

— Establish a formal and ongoing mechanism for communication with the commanding officers (COs) at the installation.

— Schedule “commander’s briefings” for the congressional delegation on a regular basis.

— Build a grass-roots relationship with the command structure at the base. This goes beyond relying on local public officials: business, community, veteran, and retiree groups should all build relationships with local commanders.

— Utilize the online BRAC library. Learn what has been said and written about the base and similar operations in the past.

While contemplating the loss of a major regional asset is never easy, it is essential to consider the consequences early in the process. Defense communities will need to examine a wide range of options. They will need to anticipate alternative land and building uses and understand the issues surrounding environmental remediation of military bases. They will also need to be creative in attracting companies to absorb existing workers.

Planning for a base closure is most effective when pursued as part of a broader economic development strategy. At a minimum, this suggests taking a fresh look at regional assets. In the same way that diversification from a single major corporate player makes sense, so too does diversification from government and military employment.

To learn more about TIP’s experience in defense communities, click on the links below:

— Wichita Falls (TX) – Defense Diversification Plan

— Clarksville-Montgomery County Economic Development Council, TN – Labor Market Assessment

— Pensacola Bay (FL) Area Chamber of Commerce & Escambia County (FL) – Economic Diversification Plan

— Okaloosa (FL) Economic Development Council & Walton County (FL) Economic Development Corporation- Economic Diversification Plan

Rex Nelson, a former presidential appointee who works for The Communications Group, Inc., is a nationally recognized writer and community development consultant. He recently posted a blog entry detailing the importance of revitalizing downtown Hot Springs as a key component to the community’s overall success. Mr. Nelson praises this new direction for the city and surrounding region, quoting extensively from the economic development plan that TIP Strategies, Inc. recently completed for the Greater Hot Springs Chamber of Commerce/Garland County Economic Development Corporation.

I barely had finished writing a blog post last week on a walk I took in downtown Hot Springs when the announcement was made: The Superior Bathhouse will be transformed into a brewery. The Superior, which opened in 1916, is the smallest of the eight bathhouses on Bathhouse Row and is the closest bathhouse to the Arlington Hotel. The Superior has been empty since 1983. A brewer named Rose Schweikhart Cranson hopes to turn the Hot Springs mineral water into craft beers, spirits and nonalcoholic drinks such as root beer.

“That’s one of the big reasons I wanted to use the bathhouse, because I would have access to the water,” she said last week. Built by L.C. Young and Robert Proctor, the Superior has 11,000 square feet and cost $68,000 to construct. The National Park Service recently renovated the building, including a new ramp to make the entrance handicapped accessible. Schweikhart Cranson said she and her husband have been testing the waters since they moved to Hot Springs from Springfield, Ill., last year.

“We’ll choose beer styles that will work with the water with minimal tinkering,” she said. “It’s favorable for making beer.”

Josie Fernandez, the Hot Springs National Park superintendent, said she hopes to have negotiations completed by the end of the year. At the same time, it was announced that a nonprofit organization known as the Muses Creative Artistry Project wants to move forward with using the back and the upstairs of the Hale Bathhouse. The Muses began operating a cafe and bookstore in the Hale lobby last year. Built in 1892, the Hale has 12,000 square feet on two main floors. In 1917, one of the hot springs was captured in a tiled enclosure in the hotel’s basement. That feature is still in place. The building was renovated in 1939 in the Mission Revival style, and the red brick was covered in stucco. Named for early bathhouse owner John Hale, it was at least the fourth bathhouse to use the Hale name. The Hale, which closed on Halloween Day 1978, is the oldest visible structure on Bathhouse Row. The National Park Service has spent more than $1.5 million in recent years to preserve the building, including updating the heating and air conditioning system.

The Muses — which describes itself as being “dedicated to preserving classical art and music through performance, education, wellness and music therapy” — was founded five years ago by Deleen Davidson. The organization wants to include in the Hale two performing arts spaces; studios for the study of music, art and dance; meeting spaces; an artist-in-residence apartment; and a wellness room for guests to experience the baths. If plans for the Superior and the Hale move forward, the Maurice will be the only one of the eight bathhouses that’s empty. That represents tremendous progress in downtown Hot Springs. I agree with the world-class Little Rock architect Reese Rowland, who has described Bathhouse Row as one of the great stretches of urban street in America. But, as noted in last week’s post, there’s so much more that needs to be done to return downtown Hot Springs to its rightful place as one of the region’s top attractions — the Saratoga of the South, if you will.

Thanks to longtime friend Kay Brockwell, the director of business retention and recruitment for the Garland County Economic Development Corp., for forwarding the city’s strategic plan for economic development, which was completed last September. That effort was led by TIP Strategies out of Austin, Texas. When I was with the Delta Regional Authority, I worked closely with Jon Roberts of TIP in developing a strategic plan for the Delta. I can assure you that Roberts does first-class work. I was delighted to see that he made downtown redevelopment the major part of his strategy for the Hot Springs area. He notes the many advantages Hot Springs possessess — a national park, the lakes, Oaklawn Park, the convention center and Summit Arena.

“These advantages, however, have bred a certain complacency,” Roberts writes. “The risk is increasingly one in which ‘good is good enough.’ This viewpoint threatens to compromise the city and the region. It would perhaps be defensible if the region really were doing well.

“In fact, there are dire warning signals. Population growth has become stagnant. The tax base is fragile. Bold initiatives, from education to redevelopment, have received only tepid support. Further, many of the greatest assets of the community are increasingly in danger of decline. These extend from the business base to hotels and even retail trade.

“It is clear that a concerted effort is called for, not only because there are opportunities but because inaction carries serious consequences. It would be an overstatement to say that this is a time of crisis. But it is not overreaching to suggest that Hot Springs cannot afford to squander many more opportunities.”

The strategic plan describes the redevelopment and revitalization of downtown Hot Springs as the “greatest opportunity for enhancing economic vitality in Garland County.”

Roberts writes: “Across the country, cities both small and large have rediscovered the importance of their downtowns, and examples of revitalized city centers are abundant. America’s renewed interest in downtowns was rooted in the historic preservation movement of the 1970s.

“Economic developers eventually learned to value vibrancy in the urban core for a more practical reason: a healthy downtown makes a city more competitive in the pursuit of new businesses. This is because prospects often see the state of a downtown as a reflection of whether a community values investment and excellence. Moreover, companies realize that in the competition for talent, a community that offers a higher quality of life and stronger sense of place finds it easier to recruit and retain the workers it needs to remain successful.”

Roberts has reached the crux of the issue: Revitalizing downtown Hot Springs is about more than attracting tourists. It’s also about attracting young, highly educated, creative people to live in the city.

Now, the bad news.

Roberts continues: “Unfortunately, few recent efforts toward downtown revitalization and redevelopment in Hot Springs are apparent.”

He’s right. Rather than focusing on the welcome leases at the bathhouses and the presence of art galleries downtown, too many visitors have their memories of Hot Springs sullied by dated, musty hotel rooms and huge buildings such as the Majestic and Medical Arts that stand empty.

“Through most of its history, downtown was a major destination for tourism and economic activity within Hot Springs,” the strategic plan states. “Its proximity to Hot Springs National Park and the presence of Bathhouse Row drew visitors to the region for more than a century.

“But downtown Hot Springs has lost much of its luster. Historic structures are in need of investment, ground-floor retail space is underutilized and the upper stories of most buildings remain vacant. The lack of new investment should be a great concern to Hot Springs’ leaders and citizens. One serious risk is that these buildings could fall into disrepair and no longer be salvageable. If this were to occur, Hot Springs would undoubtedly see its competitive position as a tourism destination erode. It is extremely important that the community no longer allow the status quo to continue. Supporting revitalization of downtown Hot Springs — as both a tourism destination and a catalyst for economic activity — will require a committed, sustained and bold approach.”

Does the leadership of Hot Springs have the stomach for such a committed, sustained and bold approach?

That’s a question I can’t answer. With the economy on the mend, can the city now attract outside investors to sink capital into projects downtown? The risks are there, but given Hot Springs’ long history as a magnet for visitors, I think the upside is tremendous for those willing to invest in hotels, condominiums, apartments and upscale retail establishments. Heritage tourism is hot, and Hot Springs is positioned to attract well-heeled visitors if the model is Saratoga rather than Branson. One thing Roberts calls for is improving the now tacky Central Avenue corridor from Oaklawn to downtown.

“While much of Hot Springs’ history and image is inextricably linked to Bathhouse Row, other destinations appear to have surpassed the urban core as tourism draws,” he writes. “For example, Oaklawn now brings approximately 1.6 million tourists to Hot Springs annually, and Lake Hamilton and Lake Ouachita are also major attractions.

“Few benefits of tourism spending, however, can be seen in downtown Hot Springs. At the same time, few amenities (such as retail, restaurants and hotels) that serve visitors are apparent within the area surrounding Oaklawn. This strategy proposes linking the area’s various attractions to create a mutually supportive network and complete visitor experience. … This corridor should be viewed as the primary linkage between Hot Springs’ two premier urban attractions: Bathhouse Row and Oaklawn. It should serve as the focal point for robust economic activity, creating a dynamic environment for small businesses and visitors alike.”

At least part of the business leadership now realizes that downtown is the key to moving Hot Springs forward. I consider this a statewide economic development priority, not just a Hot Springs priority.

I’ll be back there Saturday, thinking about what once was and dreaming about what someday might be.

By Christine Negroni

via NYTimes


The old Town Hall in Stamford, Conn. has been renovated and will become a home for aspiring entrepreneurs.

STAMFORD, Conn. — The old Town Hall here, a Beaux-Arts building on the National Registry of Historic Places, has sat unused for 25 years, a victim of Stamford’s rapid growth in the 20th century. But the Town Hall will join the 21st-century economy, with the announcement this month that it would become an incubator for business start-ups in a 10-year lease agreement with private investors.

The Stamford Innovation Center, as the venture is called, is expected to open by summer, and aspiring entrepreneurs will get work space, mentoring and access to investors.

Acting as a corporate sponsor for the venture will be Sikorsky Aircraft, the helicopter maker and military contractor based in nearby Stratford, Conn. The company, a subsidiary of United Technologies, has leased 2,000 square feet on the building’s second floor, and will coach tenants and may even invest in them, said Chris Van Buiten, the vice president for Sikorsky Innovations, a network of employees focused on finding new technologies.

Sikorsky is priming the pump by issuing five technological challenges to the public that, on the surface, are aviation related. It is seeking proposals on, among other things, ways to apply wireless monitoring to digitized aircraft and to obscure the visibility of airplanes in flight. Successful applicants will have use of the company’s space at the Town Hall for a year.

“In much the same way that Sikorsky does not make the engines or avionics that are installed into our helicopters,” Mr. Van Buiten said, “likewise will some next-generation technology solutions not be produced by us.”

The Stamford Innovation Center is renting most of the old Town Hall from the city. The Connecticut Department of Economic and Community Development provided a half-million-dollar loan to turn the building into modern office space.

In 2008 the city began renovating the Town Hall, with the hope of finding a tenant. It spent $16 million enlarging the space and making it handicapped-accessible. Patty Meagher, a founder of the Innovation Center, remembers the time she and the others involved with the project first considered leasing the building as the work was completed in 2010. “Remember the line from that movie, ‘You had me at hello’? That was the initial reaction,” she said when they first saw the limestone facade, iron-railed staircase, terrazzo floors and brilliant murals on the walls of several rooms.

The location was also an asset, she said, in the shadow of Stamford Town Center mall, steps from the city’s library, theater, shopping and dining districts. There are no restrictions on the kinds of ideas that will be considered for the center, so long as the directors believe there is potential for turning them into successful businesses. A few start-ups are already working in the building on projects as varied as a GPS-enabled community news site and the use of cloned immune cells for medicine.

As fledgling businesses develop, tenants will be introduced to venture capitalists, many of whom live or work in the area, Ms. Meagher said. The investors and entrepreneurs, she said, “will be meeting each other, interacting, and that’s how these companies could very well get funded.”

Business incubators are very of-the-moment across the country. In Chandler, Ariz., the City Council financed a biotechnology-themed center, while a center in Portland, Ore., focuses on sustainability. Nearly three-quarters of these enterprises are sponsored by economic development agencies, governments or academic institutions, according to the National Business Incubation Association. The Stamford Innovation Center is among the 25 percent that are private, with aspirations to become profitable businesses based on rents charged to tenants and educational programs offered to the public.

Over the last five years there have been 150 incubation centers opened nationwide, the association said. While no studies cite the recession as motivating that growth, Linda Knopp, the group’s research and policy director, said she believed the economy played a role. “More communities at least start considering the business incubation concept during economic downturns,” she said, “as they’re looking for ways to stimulate economic growth and create jobs.”

Certainly that is the goal in Stamford, with a population of 122,643, which has an unemployment rate of 7.1 percent, lower than the state and the nation as a whole, but which has lost jobs in the financial and manufacturing sectors and has had an increase in office vacancies. One quarter of the city’s 13 million feet of business space is unoccupied, said Laure Aubuchon, the director of the Stamford Office of Economic Development.

“We are a victim of our own success, because we keep building space,” Ms. Aubuchon said. But she said the upside is that when the entrepreneurs are ready to start their businesses they will be able to find affordable rents in Stamford.

Sikorsky has set a goal of incubating at least two viable companies a year. Barry Schwimmer, a founder of the Innovation Center who is managing the opening, said Sikorsky was setting an example that he hoped other large companies would follow.

“It is a fairly unique model,” he said, adding that such communication between large, established businesses and small, untested ones was “virtually unheard-of.”

What is developed here will most likely have wider applications, Mr. Van Buiten of Sikorsky said. He offered the example of paint that changes color on a military helicopter, which could also be sold to the automobile industry. “We’d be willing to spend a lot of money,” he said of a product like that. “But think of how that would appeal to teenagers if a car company could offer that kind of paint on a Scion at $1,500.”

By Caitlin Mac Neal

via Slate


A driverless car is tested in Germany. Photo by ODD ANDERSEN/AFP/Getty Images

Yesterday, February 16th, Nevada became the first state to approve regulations that permit self-driving cars. Since the legislation process began last June, Nevada officials worked with insurance companies, car manufacturers, law enforcement and testing professionals to develop rules mainly aimed at safety, according to PC magazine.

The regulations spell out procedures for testing the vehicles now and requirements for use by residents in the future. The robocars in the testing phase will have red license plates. Cars that have been approved for use by Nevada residents will sport green plates. The person in the car is considered the operator (and two people will be in testing-phase cars at all times). TechCrunch notes that as of right now, while people cannot operate the car drunk, they are allowed to text and make phone calls.

In order for a company to test its self-driving car, the company must purchase a bond from Nevada, at the price of somewhere between $1 million and $3 million.

While Nevada is the first state to approve and regulate robocars, Google has already tested its self-driving cars on public roads (see the car in action here). There were always people manning the cars (its first crash was actually the fault of a human), and Google notified local law enforcement in advance of any tests. Audi and Voltswagen are also working on robocars, according to PC magazine.

The main benefits of self-driving cars include reduced fuel consumption as well as less traffic congestion and accidents. Widespread consumer adoption of the technology is still far away—taxi drivers, your jobs are safe for now. But the new regulations could have an immediate effect on the Nevada economy. The state has the worst unemployment rate in the country, having been hit hardest by the recession, according to CNN. As the first state to develop regulations for this emerging technology, Nevada may experience an economic boost as companies flock to the state to test their vehicles.