Texas Is Getting Good Marks for Handling Growth

The eyes of the U.S. economic-development community are upon Texas as it prepares to accommodate 4,000 jobs in the move of Toyota’s North American headquarters to the Lone Star State over the next few years. And staring over their shoulders are CEOs and business owners looking on with excited curiosity as they ponder the possibility of following in Toyota’s footsteps and moving to or expanding within Texas.

All the congratulatory publicity aside, it is now time for Texas to show CEOs what it’s made of. Namely, can the state’s infrastructure—highways, city streets, schools and utilities—handle all of the business moving in? And can it possibly accommodate even more growth over the next five to 10 years?

Mid-market department store Kohl’s provides a good example for Toyota and other companies to watch. The retailer’s 240,000 square foot North Dallas facility opened its new customer-service operations center in April, which is expected to hire 500 people through mid-2014 and a total of more than 1,500 within four years.

Economic development experts foresee little difficulty for the state in digesting Toyota’s move, the people who will come with it, and the development demands of housing and schooling.

At least two outside organizations feel that Texas is on the right track. The southern state won Site Selection magazine’s Governor’s Cup for 2013, the fifth time it had received that award under Gov. Rick Perry’s leadership. The award is given annually to the state with the most new and expanded corporate facilities announced over the year. And Texas was named the Best State for Business for the tenth year in a row by Chief Executive magazine in May of this year.

Texas took Site Selection’s top spot with 657 qualifying projects in 2013. Ohio finished second, with 480 qualifying projects. Qualifying projects must meet one or more of the following criteria: capital investment of at least $1 million; 50 or more new jobs created; 20,000 or more sq. ft. of new construction. And Houston made the list of Site Selection’s list of the “World’s Most Competitive Cities,” ranked competitively with places like Singapore and Shanghai.

“States are the laboratories of innovation, and Texas continues to be a beacon of opportunity for job creators and entrepreneurs,” Gov. Perry said. “Over the past 12 years, we’ve built a strong foundation for the future of this state with our low taxes, smart regulation, fair courts and skilled workers. Companies nationally and internationally know that Texas works, and is the best place to live, work, raise a family and own a business.”

And while Texas does face some general challenges in assimilating its recent and continuing population surge—due to a persistent drought there, among other things—economic development experts foresee little difficulty for the robust economy of the state in digesting Toyota’s move, the people who will come with it, and the development demands of housing and schooling the families of the 4,000 white-collar employees Toyota eventually is expected to employ there.

Toyota’s move may bring $7.2 billion of economic activity over 10 years, according to an analysis for Plano, Texas, where it will relocate its headquarters from Torrance, Calif. The figure includes $4.2 billion from payroll, along with direct and indirect spending, and sales and property tax revenue, according to Grant Thornton LLP.


  • Get the CEO Briefing

    Sign up today to get weekly access to the latest issues affecting CEOs in every industry
  • upcoming events