The ATX

Austin Economy

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I'm mostly a construction and skyscraper nerd, but I thought I'd start a thread about Austin economic developments.  There is usually a lot to discuss in that regard.

 

I'll start with a report that the Austin metro (specifically the suburb of Hutto) is one one of the three finalists for the huge Tesla battery factory and 6.5K jobs:  

 

http://www.myfoxaustin.com/story/24876061/electric-car-manufacture-has-eye-on-hutto 

Edited by Texas Hill Country
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Apple is currently expanding it's Austin campus and increasing it's local workforce from ~4K to ~7K.  This is Apples largest facility outside of California.  The first new buildings were completed in February.  Here's a map of the final build out:  

 

AppleCampus*600.jpg?v=1

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In addition to their Austin Campus, Apple also started building their new generation Mac late last year at a Flextronics factory in Austin.  Apple and Flextronics are being secretive about their plans, but Flextronics appaently hired 1.7K people for the project.  

 

http://www.macrumors.com/2013/10/15/flextronics-hiring-1700-workers-in-austin-for-next-generation-desktop-computer-likely-new-mac-pro/

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Here's an article in the Austin Business Journal indicating Austin is starting to see signs of a labor shortage.  (That's somewhat surprising considering the area has been and continues to grow by several thousand people every month.)  Austin is the only one of the big four Texas metros that doesn't rely in some part on the oil and gas industry.  It's the higher pay in that industry that is helping to drive the labor shortage in Austin.    

 

http://www.bizjournals.com/austin/blog/at-the-watercooler/2014/04/how-the-energy-industry-is-draining-austins-pool.html?page=2 

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The buzz about the Tesla battery factory has quieted down of late.  If they locate it (or one of them) in Texas it appears the San Antonio area is the leading candidate.  But Charles Schwab is moving their headquarters out of San Francisco, and it appears that Austin, Dallas and Denver are the three leading candidates.  Charles Schwab is currently building a very large campus in the Denver area, and they have large Austin campus that is steadily growing.  But Dallas is a favorite locale for corporate headquarters.  It seems like a close race at this point.  

 

http://bizbeatblog.dallasnews.com/2014/05/real-estate-brokers-buzz-about-possible-office-move-by-san-francisco-based-charles-schwab.html/ 

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Traffic congestion and water shortages are the two big roadblocks in the way of Texas' continued economic boom.  Just today the Austin suburb of San Marcos, which has been named the fastest growing city in the country for the past two years by the Census Bureau, has implemented Stage 4 water rationing.  This is serious.  Where I live is currently in Stage 3, and will probably be in Stage 4 this week as well.  San Antonio may also be entering in Stage 4 this week as well.  The San Antonio Metro and southern suburbs of Austin get most of their water from an aquifer that is rapidly dwindling.  

 

The water use restrictions in each of the 5 Stages varies by municipality.  In my area Stage 3 means I can't do things like wash my car at home or water my lawn for more than a few hours at night/morning on one designated day per week.  The city of Austin is on a virtually permanent Stage 2.  This means restaurants cannot serve water unless the customer requests it, and watering is limited to night/mornings on two specified days per week.

 

http://www.statesman.com/weblogs/the-blotter/2014/aug/12/san-marcos-declares-first-ever-stage-4-drought-res/

 

Most people don't realize this, but as large as Texas is, there is not one single natural lake within the state's borders.  The closest thing to a Texas lake is Caddo Lake which is partially in Texas and partially in Louisiana, but is more like a swamp IMO.  All of the other "lakes" in Texas are river impoundments.  The majority of the Austin Metro residents get their water from Colorado River impoundments, which are only in slightly better shape than the aquifer used by the southern 'burbs and San Antonio.

Edited by Texas Hill Country

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On a brighter note...

 

The popular Austin based Alamo Drafthouse movie theater chain is reopening their S. Lamar location that was torn down and rebuilt as part of a big mixed use development that replaced the old strip shopping center where the previous S. Lamar theater was located.  This location is largely considered to be their flagship location even though their first location is Downtown.

 

Exterior1.jpg     

New theater slideshow and article:  http://www.austin360.com/gallery/entertainment/look-inside-alamo-drafthouse-lamar-and-highball/gCMjw/#5934643

Edited by Texas Hill Country
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Traffic congestion and water shortages are the two big roadblocks in the way of Texas' continued economic boom.  Just today the Austin suburb of San Marcos, which has been named the fastest growing city in the country for the past two years by the Census Bureau, has implemented Stage 4 water rationing.  This is serious.  Where I live is currently in Stage 3, and will probably be in Stage 4 this week as well.  San Antonio may also be entering in Stage 4 this week as well.  The San Antonio Metro and southern suburbs of Austin get most of their water from an aquifer that is rapidly dwindling.  

 

The water use restrictions in each of the 5 Stages varies by municipality.  In my area Stage 3 means I can't do things like wash my car at home or water my lawn for more than a few hours at night/morning on one designated day per week.  The city of Austin is on a virtually permanent Stage 2.  This means restaurants cannot serve water unless the customer requests it, and watering is limited to night/mornings on two specified days per week.

 

http://www.statesman.com/weblogs/the-blotter/2014/aug/12/san-marcos-declares-first-ever-stage-4-drought-res/

 

Most people don't realize this, but as large as Texas is, there is not one single natural lake within the state's borders.  The closest thing to a Texas lake is Caddo Lake which is partially in Texas and partially in Louisiana, but is more like a swamp IMO.  All of the other "lakes" in Texas are river impoundments.  The majority of the Austin Metro residents get their water from Colorado River impoundments, which are only in slightly better shape than the aquifer used by the southern 'burbs and San Antonio.

A scary situation indeed. Hoping we get a good rain storm here pretty soon. I would hate to see Austin and San Antonio struggle with water resources that are in dire need for every city.

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A scary situation indeed. Hoping we get a good rain storm here pretty soon. I would hate to see Austin and San Antonio struggle with water resources that are in dire need for every city.

 

We need a major El Nino already!  The two worst South/Central Texas droughts in recorded history (now and in the 1950s) were during unusually long La Nina periods.  If it weren't for El Ninos this part of the country would be much less inhabited due to water limitations.  Our other source of major rainfall - tropical systems - is limited because of the intense high pressure systems that build up over Texas in the Summer.  This pushes Tropical Storms and Hurricanes in the Gulf south into Mexico and east towards Florida.   :(

Edited by Texas Hill Country

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The construction worker shortage in Texas is getting worse.  From the article:  

 

"The labor shortage has become so severe that the company recently started putting guards on job sites to keep its workers from being poached by competitors willing to pay more."

 

Full Houston Chronicle article:

http://www.houstonchronicle.com/business/real-estate/article/In-building-boom-construction-workers-gain-the-5706440.php#/2

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Companies announcing the creation of a couple hundred jobs or so is not too unusual in Austin, and quite often doesn't even make the 5:00 PM news.  Jobs are fueling the population growth and are not really news unless it's a high profile relocation.  But this announcement is news worthy to me because it's for 1,000 new jobs.  Massachusetts based Interaction Corp made the announcement this week:  

 

http://www.bizjournals.com/austin/news/2014/08/27/interactions-corp-plans-to-hire-1-000-in-major.html  

Edited by The ATX

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All of the big Texas cities are going through economic and population booms right now.  This shows how they compare to each other.   Poor El Paso.  It gets left out of most Texas city discussions even though it would be the largest city in most states if it were not in Texas. 

 

austineconomychart2014*600xx909-606-0-51

Info on the numbers:  http://www.bizjournals.com/austin/blog/at-the-watercooler/2014/09/graphed-out-austins-untouchable-economic-growth.html

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This is little offbeat.  During the past week two New Zealand companies announced plans to set up their U.S. headquarters in Austin.  They will each employee less than 100 people, so no big deal on its own.  But the jobs created by these small company moves (especially from California) and start ups are where the jobs fueling Austin's growth are coming from.  It's not from large headline grabbing projects like Tesla.

 

http://www.bizjournals.com/austin/blog/techflash/2014/09/new-zealand-software-maker-opens-u-s-headquarters.html 

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The first phase of a $200 million biotech campus is set to break ground this week off of Riverside Dr. for XBiotech with 2000 jobs at build out.  You know times are good when huge projects like this get zero to scant mentions on local TV stations or the daily newspaper.  Fortunately the Austin Business journal picks up on this stuff. 

 

screen-shot-2014-09-25-at-10352-am*600xx

The photo and article in the Austin Business Journal:  http://www.bizjournals.com/austin/blog/real-estate/2014/09/austin-biotech-firm-begins-construction-on-200m.html

Edited by The ATX

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This WSJ article indicates a heavy demand for Downtown Austin office space and says Austin's occupancy rate over the past two years has increased at higher rate than any other large city in the U.S.  I hope this leads to more office high rise development.  All of the residential and hotel tower construction is nice, but I would like to see more signature office towers like the Frost Bank building.  

 

MI-CF231_DWEEK_G_20140923173910.jpg

Article:  http://online.wsj.com/articles/austin-office-space-more-supply-less-demand-guess-again-1411507470

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Here's another example of one of those huge projects that continue to boost the local economy that get no local media attention.  It's a mixed use project in North Austin that covers nearly 400 acres with over 4 million Sq. Ft. of mostly office space.  Local start ups and companies moving to Austin are absorbing office space pretty quickly. 

 

thepark.jpg

http://www.parmeraustin.com/index.html

Edited by The ATX

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Here's a local jobs story that must have crossed the magical job creation number to make the news.  (I'm not really complaining because it's great to live in a city where so many jobs are being created that it is not usually news.)  Online marketing firm Yodle is hiring 800 people.  This is another example of a company expanding in Austin instead of their less business friendly home state.  (In this case New York.) 

 

http://www.bizjournals.com/austin/blog/techflash/2014/10/ceo-yodle-to-add-hundreds-more-workers-in-austin.html

Edited by The ATX

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