How the City of San Antonio uses incentives such as tax breaks to attract new businesses will be one the first issues officials will tackle next year based on a new economic development plan city leaders adopted Thursday.
The City Council passed unanimously an ordinance accepting the Strategic Framework and Workplan presented by the City’s Economic Development Department. But not every council member was completely satisfied with the plan or the process.
Developed over the course of nearly a year with the help of Austin-based economic development consultants TIP Strategies, the plan came about after a series of meetings with various stakeholders and council members.
The resulting 68-page document lays out a roadmap for Economic Development Department staff and other city departments to follow in competing with other cities for jobs, investment and development.
You can read the draft plan here.
“We are asking for acceptance today because there are a massive number of policy conversations that need to take place as part of this process,” said Brenda Hicks-Sorensen, director of the Economic Development Department. “The incentive policies are the first ones that we will be taking a look at.”
The framework will serve as the basis for proposed changes to the plan and those will be presented to the council’s Economic and Workforce Development Committee in early 2023, Hicks-Sorensen said.
In addition, the department plans to evaluate the policies of the city’s nine Tax Increment Reinvestment Zones, another incentive mechanism, and how those entities can be better used for economic development opportunities, she said.
The framework outlines four focus areas: industry and innovation, placemaking and real estate, talent and workforce, and the capacity and resources needed to achieve goals.
Among other efforts in 2023, the Economic Development Department is looking to improve the city’s Small Business Economic Development Advocacy Program, which attempts to level the playing field for awarding municipal contracts to small, minority- and women-owned businesses.
The following year, in 2024, it will focus on efforts to improve business retention.
In discussing the framework plan, council members focused mostly on how the city’s economic development efforts should help to improve wages and employment in San Antonio and how the department would work to support the tens of thousands of local small businesses and sole proprietorships.
Councilwoman Ana Sandoval (D7) said she was glad to see that counting the number of living-wage jobs a company provides, or does not provide, will be addressed by the plan.
“That’s just important for us to know as a council because when we look at things like unemployment, that doesn’t necessarily mean that if unemployment is low … that everybody’s got a great job, a living-wage job, and doesn’t need support in some way,” she said.
Councilwoman Melissa Cabello Havrda (D6) also praised the plan for its focus on workforce, talent retention and small business. “We have these assets, we have these incredible businesses out there and, in the last few years especially, they’ve all been flailing, so I think this is very timely,” she said.
But Councilman Clayton Perry (D10) took issue with what the plan cost and the $325,000 expense to hire outside consultants.
“I’m criticizing a little bit that we contracted this out, and the product that we got back because … a lot of this stuff is [economic development] 101 with San Antonio sprinkled through throughout the document,” he said.
Councilman John Courage (D9) echoed Perry’s comments, emphasizing that the plan does not establish the benchmarks he would like to see for how many businesses there are in San Antonio and how various kinds of new businesses affect tax revenue.
“Whenever I’ve looked at a roadmap, it’s trying to tell me where I want to be at the end of the road, and I don’t think what we’ve laid out here particularly tells us where we expect to end up,” he said. Courage also acknowledged that can be challenging because economics and circumstances change over time.
Hicks-Sorensen said her department has the baseline data available and staff plans to use it to develop dashboards with certain targets.
City Manager Erik Walsh reminded the council the city contracted for a roadmap and that’s what they got, he said. The strategy outlined in the plan is important, he added, because the council soon will consider an ordinance for a revised economic development incentive policy that will be “aligned with this framework.”
Mayor Ron Nirenberg defended the process with a quote from Chinese military leader and philosopher Sun Tzu, saying, “Strategy without tactics is the slowest route to victory. But tactics without strategy is the noise before defeat.”
“I would assert that what we were doing before the framework was the noise before defeat — all we were doing was counting jobs,” Nirenberg said.
“So we are realigning all the things that we are doing to make sure that we get to where we want to go through economic development and ensure that our community is holding us accountable [to] achieve our bigger vision for the city.”