New Century Cities. Will Austin become one, or get left in the dust?

[JAM]

Say "science park" to most Americans and they probably will think of beautifully landscaped campuses of low-rise buildings on the outskirts of a city, where researchers commute to their cubicles each morning and fight the evening traffic to return home. For 50 years the prototype was Research Triangle Park—an 11-sq.-mile district snuggled into the piney hills outside of Durham, N.C., with such multinational tenants as IBM (IBM) and GlaxoSmithKline (GSK).

No longer. Today's high-tech meccas are being constructed deep inside major cities. Michael Joroff, an urban-planning guru at Massachusetts Institute of Technology, dubs them "new century cities." Their goal, says Joroff, an adviser to projects in South Korea, Britain, Sweden, and Abu Dhabi, is to "kick-start high-priority industries with new spaces where companies and universities can work together and develop the next generation of workers."

Planners also hope to tap into the "new urbanism" movement by offering plenty of amenities where scientists, entrepreneurs, and creative types from an array of industries can intermingle and, with a bit of serendipity, cross-pollinate ventures. "To be a neurocenter of the knowledge economy, fiber and telecom are not enough," says Josep Miquel Piqué, 22@Barcelona's chief executive. "You also need things like good food, wine, and aesthetics."

Full article: http://www.businessweek.com/magazine...7050810294.htm

[Downtown_Austin]

Austin's potential downfall - in the competitive environment of cities attracting economic development - will be city council and the chamber's cockiness, cavalier attitude, and unwillingness to provide incentives to companies to locate here.

I'm currently researching this for a longer article, but I'm confident that the public would be shocked and pissed by the number of companies/jobs that wanted to locate in Austin, only to bypass it without a second thought because council/chamber wouldn't compete for their business and provide ad-valorem tax abatements.

oh, it could be an atrocious public transportation system, too.

[ATXboom]

^^^Please expose what is going on!!!

Just like companies... same applies to municipalities.

If you believe you're on top and do everything right and see no need to change you will be out of business in a matter of time.

What I'm curious about is that I could see Austin passing on opps oddly enough in this economy... but a Round Rock or Cedar Park pulling out all fo the stops for company relos. That is why most relo's head to the burbs anyway... our problem may not be much different than some other metros. I'd love to know the "system" dynamics behind the scenes. Core cities may be at the heart of driving sprawl via the city/suburb incentive game. Disincentive to locate in city and incentive to locate in burb. This dynamic needs to change to stop sprawl.

A great way to help small businesses grow is to get a few big relos to the area. I almost feel at times as if city leadership is out to snuff my business.

[M1EK]

This may surprise you to hear it from me, but as far as employment subsidies go, I'm actually with the antis.

Austin is far better off with downtown residents working out in the burbs than the other way around. Of course, ideally we'd have both, but the downtown residential development is such a winner for school taxes, among other things, that we can afford to pass on incentives for companies that will just leave in a few years anyways (Samsung, Dell come to mind). Since it's so difficult to figure out how to structure incentive packages that don't end up screwing municipalities, I'm more than comfortable with just working on the built environment in the core (employers that willingly populate these buildings without having to be bribed are more likely to be there for the long-haul).

[ATXboom]

^ Interesting perspective and I respect it. However I'd love to see a study onthe metro incentive dynamics (muni to muni). I believe they drive sprawl in part.

Another thought... lots of people want to move to Austin and are. Watch the unemployment level over the next few years, particularly as we move into a growth economy. We'll see if city leadership is doing what they can be match new employers with new residents.

[JAM]

Originally Posted by M1EK

Austin is far better off with downtown residents working out in the burbs than the other way around. Of course, ideally we'd have both, but the downtown residential development is such a winner for school taxes, among other things,

Sounds like current council will attempt to curtail this revenue by making it too difficult to build...

Originally Posted by M1EK

that we can afford to pass on incentives for companies that will just leave in a few years anyways (Samsung, Dell come to mind). Since it's so difficult to figure out how to structure incentive packages that don't end up screwing municipalities, I'm more than comfortable with just working on the built environment in the core (employers that willingly populate these buildings without having to be bribed are more likely to be there for the long-haul).

I'm wondering what the real trade-off is here? i.e. Samsung brings in 1000 workers, which build 500 new homes and generates 500 new property tax revenue streams + local construction activity?

[M1EK]

Originally Posted by JAM

I'm wondering what the real trade-off is here? i.e. Samsung brings in 1000 workers, which build 500 new homes and generates 500 new property tax revenue streams + local construction activity?

And then a year or two later Samsung pulls right back out, laying off a bunch of people and costing us a bunch of money in social services.

[JAM]

Originally Posted by M1EK

And then a year or two later Samsung pulls right back out, laying off a bunch of people and costing us a bunch of money in social services.

Ah, but Social Services come from the state level. So they still pay their local property taxes while looking for another job - I don't think there is a glut of unsold real estate in this metro, so it must not be too big of an issue. Technology companies ebb and flow pretty hard with the economy on a global scale, so maybe the Samsung example isn't a good one. I'm sure their decision was not taken lightly given the huge investments they made here. Regardless, cities are competing for job growth at present time, and tax abatements are one of the ways they compete. Another way the city could compete is to set aside an area similar to what the article mentions to capture that type of investment. What does the city of Austin offer better than another city if it isn't tax abatements?

[TXAlex]

It's not as if Samsung is pulling out. Retooling/repurposing isn't quite like closing shop.

[ATXboom]

Some homework clearly needs to be done but my guess is the Samsung situation is more rare than common. We can't use one example to pre judge the whole taco.

Beyond that... we should be offering any incentive possible for corporate HQ relos... see how well Charlotte has done in this arena. Much more staying power than a satellite office.

[M1EK]

Samsung is (mostly) pulling out. They'll be a lot smaller here when all is said and done. You guys are a bit out of touch on this one.

The problem with offering incentives to lure companies in is that you are then vulnerable to the next place offering an incentive to lure that company away from you. Ref: the move of most of the chip stuff to the Albany area recently. This applies more to suburban employers (note, not employers in suburbs of Austin, but employers in suburban PARTS OF Austin) thanks to lesser investment in infrastructure and lesser identification with the city.

Still, though. The incentives to Intel and Vignette didn't make us look so good (even though they ended up not being paid), did they?

[Scottolini]

Originally Posted by M1EK

Samsung is (mostly) pulling out.

Riiiight.

A loss of 300 jobs out of 1,500 is nothing to sneeze at, but Samsung, and their billions and billions of dollars of investment in Austin are hardly pulling out.

http://www.statesman.com/business/co...15samsung.html

[M1EK]

Originally Posted by Scottolini

Riiiight.

A loss of 300 jobs out of 1,500 is nothing to sneeze at, but Samsung, and their billions and billions of dollars of investment in Austin are hardly pulling out.

http://www.statesman.com/business/co...15samsung.html

First step in pulling out. We'll see if they really go through with the retooling. Nevertheless, this comment is particularly apropos:

Wow, 230,000,000 for 1000 jobs. That's 230K per job. Even if it's for 5000 jobs that's 46k per job. And that's probably money from 10 years ago or so.