An analysis of the Fort Worth Report on Dallas Regional Chamber data compiled from news articles shows that 44 companies have expanded operations, added new facilities or moved their headquarters to Fort Worth since 2010. Compared in total for North Texas, this represents 8.3% of all listings since 2010.
A total of 530 companies announced large business moves to the area between 2010 and January 2022, according to data from the Dallas Regional Chamber.
“It’s a little concerning if Fort Worth isn’t really capturing its share of business expansion plans,” 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 relocations and business expansions since 2010
Fort Worth accounts for just over 8% of the 530 businesses that have moved or expanded to North Texas over the past decade.
If a city’s residential development exceeds its economic growth, it risks becoming a suburb. Karras and his team at TIP Strategies have 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,” Karras said. “I think there’s less risk of (becoming a suburb) now, but it’s still something that should be at the forefront of local leaders’ concerns when making decisions about everything, like the use land and infrastructure.
Balanced development creates a balanced tax base so the city can provide amenities such as proper infrastructure, parks, and fire and police departments, Karras said.
The city council approved an updated version of the economic development plan in February, according to previous reports from the Fort Worth Report. Karras describes the economic development environment in Texas as competitive due to the state’s tax advantages, affordability, and central location.
According to an informal report submitted to the city council, Fort Worth also has the least amount of dedicated “money closing” funds compared to other cities in the region to financially incentivize businesses to locate in the area. The council approved the use of tax increase funding districts of part of the money spent on 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 final U.S. regional distribution center and headquarters in 2020. Ariat CEO Beth Cross said part of the choice was geographic.
“It’s completely justified by how important this part of the world, this part of the country is to us,” Cross said. “So it was definitely essential for the business. It’s really consistent with the values of the brand.
Cross told the report that Ariat received city incentives, which she could not share, as well as a $750,000 grant from the governor’s office of her 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 offered an incentive plan valued at around $500 million, but the plant ended up in Georgia following an open state court press.
Electric battery company Schumacher announced the move of its headquarters to Fort Worth in July 2021, consolidating itself with its distribution operation in Dallas. CEO Mickey Leech said the move near the American Airlines Center had been beneficial for finding workers, but when the company reached out to the local community for help moving into the new facility, nothing came of it. has worked”.
“Our landlord helped us find a great space where we can do everything under one roof,” he said. “And we had no interaction from the city of Fort Worth. We 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 business wants to move, it often consults with a site selection consultant and gives them specifications on what the business is looking for, such as land area and building size, said Robert Sturns, director of economic development at 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 business. The process remains secret under a nondisclosure agreement until the company chooses Fort Worth and is presented to the city council for approval, Sturns said.
“Generally we’ll have everything kind of buttoned up and we’re 99% sure the deal will go ahead before we present anything to the board,” Sturns said.
The City of Fort Worth has two main incentives: Chapter 380 and tax abatements. Not all companies want incentives when offshoring, Sturns said.
Chapter 380 grants reimburse businesses for taxes they have already paid in Fort Worth based on their compliance with their incentive agreements. Companies must submit documents each year to show that they have delivered on the promises of the agreement. Incentives can be revoked or reduced if a company fails to meet requirements.
The city has investment requirements, job creation requirements and average salary requirements for a business to be eligible to receive incentives from the city of Fort Worth, Sturns said.
The pipeline for businesses remains strong, Sturns said. About 40% of the incentive projects are in the manufacturing, industrial and logistics sectors, and he sees room for growth there. But interest in office space is down, he said.
“People are still trying to figure out, you know, sort of a return to work schedules, and what that looks like, and what their needs will be,” he said.
Job growth vs offshoring
Businesses less than a year old accounted for 29,979 jobs in Fort Worth in 2019, according to an annual report from Sparkyard, an organization that supports entrepreneurship in Fort Worth.
Sparkyard’s analysis is based on research by the philanthropic organization Kauffman Foundation, which found that between 1980 and 2005, all net job creation in the United States came from companies less than five years old.
Cameron Cushman, assistant vice president for innovation ecosystems at the University of North Texas Health Sciences Center, said offshoring can’t do much for the local economy.
“One of the dirty little secrets of economic development is that often when these companies move from city to city, they don’t create jobs,” Cushman said. “They just move them from place to place. A startup, when you think about it, can only create jobs by nature.
The city recently added an Entrepreneurship and Innovation Committee, led by Leonard Firestone of District 7, to discuss ways to grow startups and small businesses.
The city sees technology as an industry that could see growth and is part-funding an incubator program focused on physical health technology, according to previous reports from the Fort Worth Report. By developing the industry from scratch, it could help the city attract bigger companies that need a large and skilled workforce.
“You kind of have this chicken and egg thing,” Sturns said. “You try to recruit the workers to recruit the companies because they are looking for the workers, but you can’t get the companies if you don’t have the workers.”