Economic Development goals for Kyle: Manufacturing, yes; retail, not so much

I’ll be looking forward to the presentation planned for Tuesday’ City Council meeting on the subject of economic development strategies for Kyle that will be presented by the Natelson Dale Group. I’m not that familiar with this organization, but, according to its website, it "is an economic and financial consulting firm established in 1974 which provides services to both public and private clients" in the areas of "real estate market forecasts and development feasibility studies, financial feasibility and income projection analyses, economic development strategic plans" and a host of other areas, The company is headquartered in Yorba Linda, Calif., and it also has offices in Phoenix and Washington, D.C. I mention all this because the Natelson Dale Group appears to be much more than a bunch of local yokels fresh off the turnip truck and I’m willing to give them the benefit of the doubt..

My guess is that the group is going to recommend to the council that it focus its economic development efforts on attracting "high tech manufacturing" companies to either start up or relocate to Kyle. "TNDG recommends that initial cluster targeting be focused on those ‘game-changing’ clusters requiring a relatively high level of effort, but also contributing significantly to Kyle’s image as a destination," the report says. "Fostering a sense of destination supports branding efforts in Kyle and expands opportunities for the resident workforce to be employed in Kyle and thereby identify more strongly with the community than if they were out-commuters. By focusing on a handful of high-profile industries that Kyle could ‘become known’ for, the City would be building a brand along with attracting jobs and investment."

Specifically, the report says Kyle should focus its efforts on these specific types of high-tech manufacturing companies: semiconductor and other electronic component manufacturing; electrical equipment manufacturing; electronic and precision equipment repair and maintenance; electronic shopping and mail-order houses; and medical equipment and supplies manufacturing.

It also suggests the premier area of the city that should be targeted for these companies is a site dubbed "Plum Creek 6," located on the east side of Kyle Parkway north of Kohlers Crossing.

In ranking its target industries, TNDG grouped them into three categories: 1. Highest priority (which includes manufacturing, information, health care and manufacturing support); 2. Mid-level priority (professional services, logistics and arts/entertainment/recreation); and 3. Lowest priority (wholesale trade and retail). Which to me translates into the city should immediately quit wasting money sending representatives to retail trade shows/conventions.

Interestingly (and, perhaps, coincidentally) TNDG recommended one of the first steps the city should take in its economic development efforts would be to "Re-orient existing Economic Development and Tourism Board to serve as initial/interim ‘target industry taskforce’; (and) recruit additional industry representatives (potentially from outside Kyle) to ensure interface with targeted industries/clusters." What makes this interesting is that on this same City Council agenda is an item to approve nine individuals to the Economic Development and Tourism Board, none of which, I believe, were recruited. Of those, only two are "industry representatives" and both list their primary addresses as Kyle: Neal Kelly, vice president and chief operating officer of Seton Medical Center Hays, and Harish Kalkani, founder and owner of RSI, an electro-mechanical distribution company whose corporate headquarters are located at 1670 Kohlers Crossing. Five of the remaining seven also list Kyle as their primary address including one, Jim Hough, who lists as one of his major accomplishments that he provided the Pope with a trailer to ride on during his visit to Phoenix. So there’s that. But, then, this is what happens when you make economic development such a low priority that you decide not to go out and recruit experts to serve on an Economic Development Board, as the TNDG recommends, but just hope you’ll get some folks to volunteer.

To counter this oversight, TNDG recommends something I’ve long advocated and that is the city "Initiate a plan for the eventual creation of an independent Economic Development Corporation (EDC) in Kyle, to provide the flexibility in economic development responsiveness needed in order to consolidate Kyle’s economic competitiveness with respect to neighboring and other competing entities." This could render the Economic and Tourism Board superfluous. The issue here, of course, is funding. Normally, as the report points out, these EDCs are funded with a half-cent of the city’s sales tax allotment. However, Kyle has already dedicated that half-cent to the county. I don’t know why — I have asked the city for an explanation and will update this when that explanation is provided. So then the issue becomes (1) whether the city believes it’s in its best interests to devote than half-cent to the county or to the funding of an EDC and (2) if they choose the latter option, can they convince the county to give up that money? However, as the TNDG report points out. "Generally speaking, economic development prospects are more accustomed to and comfortable with economic development organizations structured as EDCs, which offer maximum flexibility to structure assistance across jurisdictional/organizational lines, maintain confidentiality, and maintain independence from bureaucratic and political encumbrances."

TNDG wisely recommends that, in order to make Kyle more attractive to residents, visitors and businesses, it should "improve walkability in/around existing and planned employment centers, and concentrate other amenities in these areas," which, of course, contradicts the area’s long-range transportation plan and why I have argued that transportation plans generally work in opposition to economic development plans.

TNDG’s report includes some demographic information I found fascinating. For example, the largest segment of the city’s population — 11.1 percent — falls within the age of 30 to 34, but an astounding (at least, to me) 21.1 percent of Kyle’s total population — that’s a little more than one out of every five persons living in Kyle — is younger than 9 years old.

It also notes that 55.7 percent of the city’s workforce commutes between 15 and 45 minutes each way and that 14.4 percent of Kyle’s workforce population commutes an hour or more each way. That’s twice the percentage of the state as a whole.

"The data show that only a very small percentage (2.3%) of resident workers are employed in Kyle in 2012," the report points out, "and the in-commuters holding 86 percent of the jobs in Kyle tend to be younger, have lower earnings, and be employed in the trade, transportation, and utilities industry class, compared to Kyle’s out-commuting workforce."

In summation, we need a whole lot more better paying jobs here in Kyle. But I’m betting most of you already knew that.