AUSTIN | Economic Development

[sewaneetigers]

Originally Posted by ATX2030

Report: Austin is now the 2nd fastest-growing city in the U.S.

https://www.kvue.com/article/money/e...5-bd18b699b327

https://kenaninstitute.unc.edu/wp-co...-10122022r.pdf

San Francisco number 1?

[The ATX]

It's not about population growth.

[freerover]

Originally Posted by undergroundman

I personally would like to see a purge of existing employees and start over from scratch.

Why? Why not just start a new company at that point? Sorry, it just seems like an incredibly silly suggestion and I’m struggling to even guess what logical rationale exists for that.

[Novacek]

Originally Posted by freerover

Why? Why not just start a new company at that point? Sorry, it just seems like an incredibly silly suggestion and I’m struggling to even guess what logical rationale exists for that.

because the value is in the name, existing user base, and first mover advantage.

Not that I necessarily agree with the "clean house" approach, but there is a vast difference between "twitter with all new people" and "brand new Musker app"

[lonewolf]

Originally Posted by sewaneetigers

San Francisco number 1?

looks like it's just a YoY economy growth chart. Tech can be very volatile when it comes to valuations for the most part. SF will usually be leading the pack in good times or bad, we'll probably be there ourselves pretty soon.

also, the rationale for the study seems silly on its face. a 3 year span would seem to be much better

[atx-adam]

Interesting editorial from the Austin Business Journal:

Letter from the editor: Worried developers just froze tower's construction — what should we make of that?

Austin's economy is in uncharted territory.

Ever since Central Texas economics have been in overdrive and arguably overdue for a correction, basically for the past five years, I've been reminding stewards of this region that this isn't our father's economy. It's not even the economy a 47-year-old Austinite like me has lived and breathed.

When the next downturn hits, it will likely hit us like never before. The bigger they are, the harder they fall.

Why all this talk of consternation? A noticeable crack in our economy's veneer emerged earlier this week when Los Angeles-based developer Kilroy Realty Corp. made it known that it was halting construction of what is to be called Stadium Tower near the Q2 soccer stadium and The Domain neighborhood.

Should you care enough to re-evaluate your company's immediate business plan? I think so. I propose that this is a red flag that should be minded by even professionals outside real estate when you combine it with the bigger picture. Don't take it as sky-is-falling news, but rather an early warning signal that reminds us that conservative business practices should be considered at this time.

Don't panic, but be wary. Your employees, shareholders and clients deserve that caution.

That's the lesson offered by Kilroy Realty's decision to halt construction of Stadium Tower. I personally went by the site on Oct. 27. It's a huge hole flanked by some random construction equipment and the base for a huge crane meant to bring the 500,000-square-foot tower to life. If the crane could do its work, it would yield a building roughly the size of the Frost Bank Tower downtown.

It's not that Kilroy (NYSE: KRC) is short on money. The company is public so many financials are available, and all point to it being a successful business for the foreseeable future. And it has reason to be bullish on Austin. It just announced a big win on Oct. 25, when it was made known that architecture firm Page signed a 15-year lease for 51,000 square feet in the new Indeed Tower downtown, which Kilroy bought last year to get a foothold in the Austin market.

But Kilroy sees some writing on the wall we should all heed. It's putting Stadium Tower on ice "until the economy gives us more confidence or we pre-lease a substantial portion of the project," CEO John Kilroy told analysts on an Oct. 26 earnings call. This will surely cost the company money, but executives obviously estimate they'd lose more money if a finished building sat empty during a recession.

Disclaimer: The Domain is a different beast

One reason Kilroy's move should cause only pause and not panic is that The Domain is a real estate submarket like no other. We've been calling it Austin's second downtown for years. That part of North Austin has an extreme amount of new construction on the drawing board and in action. And rightly so: Amazon, Facebook, Vrbo, Indeed and other internet giants call its towers home, and they and others have displayed an almost insatiable appetite for office space despite the work-from-home movement.

Kilroy executives, who have not talked one-on-one with ABJ yet, are caught in a complicated but somewhat geographic-specific situation. Up the street, a new office tower by Austin-based Stonelake Capital Partners in The Domain sits ready for tenants. PayPal took the top two floors but that left roughly 22 floors un-leased. That has to be a sign to Kilroy.

On top of that, about a mile from Kilroy's frozen site, Philadelphia-based Brandywine Real Estate Trust has cranes already up to flesh out Uptown ATX next to The Domain. The buildings being built by Brandywine are so significant they promise to expand the second downtown's skyline to the east across Burnet Road — something Kilroy intended to do with Stadium Tower. But Brandywine's construction is much further along.

So a lot of Kilroy's decision boils down to who can bring office space online in the right time for that submarket — something most businesses don't need to mind. But read between the lines: Kilroy projects that prospective tenants, businesses perhaps like the one you work for, won't be bullish enough on office space in the coming year. It's no secret: We're probably in store for a recession in 2023.

No pain, no gain — and we've had lots of gains

Many have reminisced about Austin's ability to be the last one into a recession and the first one out. It's been easy for a college town with a backbone of state government to insulate itself. But what happens when the world is at your doorstep? Suddenly, so are many of the world's problems.

I got my first taste of this sting about 20 years ago during the tech downturn. When that bubble burst, Austin felt it — but not as much as, say, Boston or Silicon Valley. So when I was an ABJ reporter around the turn of the century, I called a Canadian developer to ask them why they were backing out of a huge new neighborhood they planned north of Austin.

Here's the gist of what I was told: We know Austin is a sound investment and this project would work, but we've taken such a bath on the East and West coasts that we can't put money there right now.

We now have a bevy of national and international players in our economy. Can we expect such things to happen with more frequency and impact during the next recession? Statistics would say so.

It's been about 20 years since Austin saw a major office building under construction frozen by economic times. After the dot-com bust in 2001, Intel Corp. ditched a 10-story building downtown that was just a skeleton. A 10-story building for downtown Austin was a big deal 21 years ago. Now we're talking about a building twice as high being put on hold months before a projected recession.

Twice as nasty already and on a much earlier timeframe. I fear we just lost our reputation for being last into a recession. Will we still be the first to get out?

The Kilroy site won't be as big of a blight on our landscape as the "Intel shell." Crews at Austin-based Harvey-Cleary Builders haven't taken Stadium Tower vertical yet, it's just a big hole covered by a fence so it's not that noticeable. Which is why I write this: Notice Kilroy's decision, and consider playing it safe with your business in the months to come. The bears are coming out to play.

[freerover]

Originally Posted by Novacek

because the value is in the name, existing user base, and first mover advantage.

Not that I necessarily agree with the "clean house" approach, but there is a vast difference between "twitter with all new people" and "brand new Musker app"

Ask ShaggyTexas about the value of an “existing” user base and brand.

[We vs us]

I'm happy for an opportunity to post this link, which, aside from the snarky tone, actually makes a useful point about social media -- which is that, both members and advertisers alike actually don't want totally unfettered speech as a value. They want safe spaces to play and to advertise, and what that means for Twitter is that "you have to ban racism, sexism, transphobia, and all kinds of other speech that is totally legal in the United States but reveals people to be total assholes. . . . the dull reality is that you still have to ban a bunch of legal speech if you want to make money."

Musk may be able to find value at the margins -- slightly more centrist mods, for instance -- but the sea change his backers and cheerleaders want to see will almost certainly not materialize; and if it does, it will almost certainly kill it outright.

[lonewolf]

correct twitter turning into 4chan would kill it so i think any worries that's where it's headed are overboard. elon did float idea of a tiered twitter experience the other day.

tier A - sanitized, family friendly, 4 quadrant content and posters
tier B - a pg-13 environment, edgy jokes, comics+video clips with edgy humor
tier C - pretty much anything legal goes

user selects which tier they want to experience and are walled off from the others. if you were to tier c post on a tier a account you would be banned

[hookem]

Originally Posted by freerover

Ask ShaggyTexas about the value of an “existing” user base and brand.

Man, you could make a podcast about all the drama that went on with Hornfans and Shaggy/Surly Texas/Bevo et al. Some of those Longhorn fans were pretty connected with high up people though, and you could get info from them the average person wouldn't be privy to. Of course there was also blatant lies and misinformation. I guess they were ahead of their time in that sense...

[lzppjb]

Originally Posted by hookem

Man, you could make a podcast about all the drama that went on with Hornfans and Shaggy/Surly Texas/Bevo et al. Some of those Longhorn fans were pretty connected with high up people though, and you could get info from them the average person wouldn't be privy to. Of course there was also blatant lies and misinformation. I guess they were ahead of their time in that sense...

I have been/was a member of that community since the very early days of Hornfans. Like...1999 or something. But I haven't posted much at all on Surly the last couple of years.

[ILUVSAT]

Not sure if this is the correct spot to put this...but, this is HUGE!

The CMT Music Awards are moving to Austin after ~55 years in Nashville (originally called the Music City News Awards which began in 1967). It will be held at the Moody Center.

https://www.bizjournals.com/austin/n...r-decades.html

Congrats Austin!!!

[The ATX]

Originally Posted by ILUVSAT

Not sure if this is the correct spot to put this...but, this is HUGE!

The CMT Music Awards are moving to Austin after ~55 years in Nashville (originally called the Music City News Awards which began in 1967). It will be held at the Moody Center.

https://www.bizjournals.com/austin/n...r-decades.html

Congrats Austin!!!

Nice. I need to head over to Urban Planet to see what the Nashville crowd thinks about it.

[We vs us]

FWIW, so far as we know, this isn't a permanent move. They come to Austin in 2023 only.

Still a huge coup, though. Moody Center is absolutely playing in the big leagues.

[lzppjb]

I was just about to ask that. Everything I read keeps saying "...for 2023."

Maybe Austin can work its way into a rotation.

[The ATX]

Maybe they are just kicking the tires on Austin and the Moody Center.

[lzppjb]

Originally Posted by The ATX

Maybe they are just kicking the tires on Austin and the Moody Center.

For sure. If it does really well, I could see a rotation. I don't see them ever taking it away from Nashville for good.

[We vs us]

Originally Posted by lzppjb

For sure. If it does really well, I could see a rotation. I don't see them ever taking it away from Nashville for good.

Agreed. Hard to take it away permanently from the home of Country Music. But -- a lot like the Spurs series that's playing here later that month -- it's definitely a proof of concept for our new arena. We could host a bunch more pro Bball and other special events in there. Just got to prove it works.

[wwmiv]

Originally Posted by lzppjb

I was just about to ask that. Everything I read keeps saying "...for 2023."

Maybe Austin can work its way into a rotation.

If a rotation is their plan, Denver and Los Angeles want their turn.

[atxsnail]

Originally Posted by atx-adam

Interesting editorial from the Austin Business Journal:

Letter from the editor: Worried developers just froze tower's construction — what should we make of that?

ABJ has a podcast called "ATX Next" where they discussed this and the local commercial real estate environment on the last episode. I don't usually listen to stuff like this but it was interesting enough to hear them talk about the possible trouble on the horizon. At the very least, a shift in focus seems likely in the near term. They discussed how our being a new player on the national/international scene makes us more vulnerable to problems outside of our region than in decades past. They also discuss the recent trend towards industrial/manufacturing that didn't use to exist here.