Austin Presentation Aug 2009
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Transcript of Austin Presentation Aug 2009
The Tech Bust
Source: CB Richard Ellis (industrial) & Colliers Oxford (office).
Occupancy rates fell by nearly 20% from 2000 to 2003.
Occupancy Rates Decline
94.2
%
91.8
%
82.7
%
77.1
%
95.8
%
81.2
%
77.0
%
76.8
%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2000 2001 2002 2003
Industrial
Office
Source: Texas Comptrollers Office
By 2003, the city’s revenue from sales tax had dropped $13 million, severely impacting services.
COA Sales Tax Revenue Declines
$117.8 $117.4
$110.2
$105.0
$95
$100
$105
$110
$115
$120
2000 2001 2002 2003
Mill
ions
Source: PricewaterhouseCoopers/Venture Economics/NVCA.
By 2002, venture capital investment fell to 20% of what it had been two years earlier.
Venture Capital Investment Declines
$2,076
$1,059
$448 $496
$0
$500
$1,000
$1,500
$2,000
$2,500
2000 2001 2002 2003
Mil
lio
ns
Meanwhile…
Austin had taken itself out of the economic development “game”
Austin Chamber’s economic development funds were being diverted for operations – annual funding for economic development was $500,000Chamber’s website for site selection and business relocation/expansion was “under construction”. . . for over 5 yearsChamber had one full-time staff member focused on economic developmentA City employee skipped a meeting with a major auto manufacturer
Opportunity Austin 5-Year Plan
Program Goals:
72,000 net new jobs
$2.9 billion net increase in payroll
$14 billion in GRP
Opportunity Austin 5-County Region
The Beginning of Opportunity AustinWe raised $14 million in 2004($3 million over our goal!)
5-Year Result
5-Year Goal
New Jobs 124,200 72,000
Payroll Increase $5.7 Billion $2.9 Billion
Corporate relocation announcements 144 100
Out-of-region visits 835 500
Prospect visits 540 250
Regional retention visits 857 475
Summary of Results
Relocations By Target Industry Sector (2004-2008)
Clean Energy 6
Data Center 5
Digital Media 15
Headquarter/Regional Office 29
Life Sciences 13
Semiconductor 13
Software 17
Wireless 8
Other IT 11
Other 27
TOTAL 144
Opportunity Austin
Opportunity Austin
Job Creation Largest 100 Metros
Nonfarm jobs, Dec.
2008
2003-2008 1998-2003
Diff. % Ch. Rank % Ch. Rank
Austin MSA 783,300 124,200 18.8% 1 6.4% 26Raleigh MSA 516,600 72,500 16.3 2 5.1 38Houston MSA 2,628,100 336,600 14.7 3 2.9 50Las Vegas MSA 899,700 114,700 14.6 4 22.1 2Salt Lake City MSA 646,100 78,300 13.8 5 3.1 49San Antonio MSA 856,700 99,300 13.1 6 5.0 39Tulsa MSA 439,800 47,100 12.0 7 -2.3 84Fort Worth MDiv 884,200 93,800 11.9 8 3.6 46Durham MSA 292,800 31,000 11.8 9 2.1 57Dallas MDiv 2,119,600 222,100 11.7 10 0.6 69Baton Rouge MSA 380,400 39,500 11.6 11 2.7 53Orlando MSA 1,064,900 109,600 11.5 12 9.4 13Charleston MSA 296,200 28,800 10.8 13 7.4 19Boise City MSA 263,600 25,500 10.7 14 11.4 7Wichita MSA 313,300 29,500 10.4 15 -5.1 97
Source: U.S. Bureau of Labor Statistics.
18.8%
12.9%
3.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
20%
Austin MSA Texas United States
Employees on Non-Farm Payrolls 2003-2008
Source: U.S. Bureau of Labor Statistics.
-2.5-2.0-1.5-1.0-0.50.00.51.01.52.02.53.03.54.04.5
2001 2002 2003 2004 2005 2006 2007 2008
Mill
ions
of
Sq.
Ft.
Office
Industrial
Real Estate Absorption
Source: CoStar.
-23,900-5,800
-1,300
+22,700 +25,100
+41,700
+24,800
+9,900
Office Building Sales
Source: Sperry Van Ness, Advisor Insights.
2001 2002 2003 2004 2005 2006 2007 2008
Transactions 7 11 11 23 33 14 33 18Avg Price/SF $115 $118 $100 $121 $174 $172 $249 $199
0
50
100
150
200
250Transactions
Avg Price/SF
-23,900 -5,800-1,300
+22,700
+25,100+41,700
+24,800
+9,900
Existing Home Sales
$3.56 $3.56 $3.70 $3.90$4.49
$5.66
$6.96 $6.91
$5.46
$0
$1
$2
$3
$4
$5
$6
$7
$8
2000 2001 2002 2003 2004 2005 2006 2007 2008
Bil
lio
ns
+33,100 -5,800-23,900-1,300
+22,700
+25,100
+41,700 +24,800
+9,900
Source: Real Estate Center at Texas A&M University.
>>Opportunity Austin 2.0
A challenging time…
300 jobs lost with ModusLinkclosing in Round RockAquatic Industries closes Leander
plant
Applied Materials lays off 650
Dell eliminates 900 manufacturing jobs
Harcourt Education eliminates 200 jobs
Jewelery Channel closes in Round RockAdvanced Micro Devices lays off 364
Midway Games cuts 50 Austin jobs
Education Finance partners closes student loan service center
Freescale downsizes by 138 jobs
NCsoft downsizes Austin Studio by 100
Austin Companies in the News in 2008
Applied Materials downsizing continues with another 60 layoffs
Google closes recently established Austin office
Spansion cuts 163 Austin jobs
Sun Microsystems prospects uncertain following acquisition
Freescale downsizes by 319 jobs
Austin Companies in the News in 2009
Fastest Growing Among Top 50 Metropolitan Areas
Source: U.S. Bureau of Labor Statistics.
Non-farm payroll jobs
June ‘09
Growth June ‘08-June ‘09
RankDifference % Ch.
Austin MSA 778,700 -1,200 -0.2% 1
San Antonio MSA 855,900 -6,300 -0.7 2
Virginia Beach MSA 774,000 -7,600 -1.0 3
Fort Worth MDiv 869,000 -13,700 -1.6 4
Newark MDiv 1,031,500 -16,800 -1.6 5
Washington MDiv 2,411,200 -41,000 -1.7 6
Columbus MSA 931,600 -15,900 -1.7 7
Memphis MSA 616,800 -12,900 -2.0 8
Kansas City MSA 1,008,300 -21,300 -2.1 9
Dallas MDiv 2,078,200 -44,600 -2.1 10
Fastest Growing Among Top 50 Metropolitan Areas
Source: U.S. Bureau of Labor Statistics.
Non-farm payroll jobs
June ‘09
Growth June ‘08-June ‘09
RankDifference % Ch.
Baltimore MSA 1,296,200 -32,000 -2.4 11
New York MDiv 5,187,700 -130,300 -2.5 12
Boston MDiv 1,687,800 -46,000 -2.7 13
Houston MSA 2,550,900 -69,600 -2.7 14
Pittsburgh MSA 1,135,400 -31,200 -2.7 15
Philadelphia MDiv 1,880,600 -54,500 -2.8 16
Nassau MDiv 1,249,200 -40,300 -3.1 17
Richmond MSA 616,100 -21,800 -3.4 18
Indianapolis MSA 890,000 -33,000 -3.6 19Miami MDiv 1,000,700 -37,200 -3.6 20
Job Growth, Peer Metros June 2008-June 2009
Source: U.S. Bureau of Labor Statistics.
-0.2%
-3.0%
-3.9%-4.3% -4.3%
-7.6%-8%
-7%
-6%
-5%
-4%
-3%
-2%
-1%
0%
$8,509,907 40.5%
$2,111,754 10.1%
$6,272,472 29.9%
$732,743 3.5%
$1,362,349 6.5%
$483,897 2.3% $426,878
2.0%
$100,000 0.5% $1,000,000
4.8%
Opportunity Austin 2.0 Five Year Approved Budget $21 Million
Economic diversification
Business retention & expansion
Education
Talent attraction
Improve transportation system
Keeping Greater Austin Great
Investor relations
Fundraising campaign
Opportunity Fund
Opportunity Austin 2.0
$60.0
$25.0 $22.5 $22.5 $22.0 $21.0 $17.0 $17.0
$0$10$20$30$40$50$60$70
Mill
ions
Comparison Cities
Opportunity Austin 2.0
Opportunity Austin 2.0
• Campaign launched in May 2008
• 312 companies/organizations have pledged to invest in O.A. 2.0
• 153 - new investors
• Contributions are up 67% from original investors
• Total as of August 31, 2009: $18,329,400
August 09 August 08 2009 YTD Annual Goal 5 Year Goal
OUT OF REGION VISITS 26 9 180 120 600
SOURCES OF LEADS 22 102 181 80 500State 2 28Site Consultants 4 22National Broker 6Local Broker 2 19Web 2 10Out of Region Visits 1 42Direct Company 5 23Referral 6 31
LEAD GENERATION 81 350 500 2500
Cold Calls 48 203
Out of Region Visits 17 110
Electronic Communication 16 37
PROSPECT FOLLOW UP REQUEST 206 1316
PROSPECT VISITS 15 9 99 40 300New (1st) 7 54Repeat 8 45
ANNOUNCEMENTS 1 2 9 15 115
REGIONAL RETENTION VISITS 87 29 420 360 1800
Opportunity Austin 2.0Efforts as of August 2009