Local economic development officials refer to it as the “billion-dollar week” – when three manufacturers announced in mid-September that they would invest big in San Antonio, capping intensive efforts to bring them here.
Now those officials, determined to build upon the momentum to capture more deals, are switching gears – and building their strategy around a scorecard comparing San Antonio to the cities it competes with.
On the eve of her presentation for the city council’s Economic and Workforce Development Committee on Tuesday, the president and CEO of the San Antonio Economic Development Foundation (SAEDF) sat down with the Rivard Report to lay out the organization’s plans for the coming year.
Those plans involve focusing more on initiatives that address some of the city’s biggest challenges.
“We’re a sales organization. The majority of what we do is focusing on transacting, and we work some great deals last year,” said Jenna Saucedo-Herrera, a former CPS Energy executive who is in her third year of leading SAEDF. “The billion-dollar week was exceptional – we’re seeing real returns in advanced manufacturing. But we still want to work bigger and better deals. We want to be able to compete for headquarter operations, regional headquarter operations.
“But to do that, we know that we’ve got to improve the product that we’re selling.”
Since 2016, the SAEDF has operated with a target-industry approach to attracting and retaining new business and jobs with a focus on building up the manufacturing, cybersecurity, and bioscience sectors. In that time, the Forefront SA plan contributed to 57 new headquarters being established in San Antonio, nearly $2 billion in investment made, and almost 18,000 new jobs created.
But the organization’s target goals for 2020 are being expedited with a six-month business plan Saucedo-Herrera developed. The plan takes the organization and its goals to the end of May. Starting this summer, SAEDF will widen its scope to work with other development partners regionally as well as to launch a more holistic approach to economic development.
It will focus less on traditional development measures such as employment numbers and capital investment, Saucedo-Herrera said, and more on the long-term economic health and sustainability of the economy.
The shift is the result of a strategic planning process, guided by Atlanta-based consulting group Market Street Services, that began last June. The group conducted stakeholder interviews with 15 people, such as former City Manager Sheryl Sculley and former Mayor Henry Cisneros, plus industry-specific focus groups and surveys.
That part of the process helped SAEDF create a competitive scorecard for San Antonio and the region. The scorecard compares the city to 10 metro areas – those the SAEDF aspires to compete with and those it already does – on five aspects, including:
- Economic performance: employment, output, wages, income, poverty
- Workforce competitiveness: labor force, age composition, educational attainment, migration
- Innovation and entrepreneurship: research and development activity, self-employment, small business lending
- Business environment: infrastructure, business costs, business climate rankings
- Quality of life: crime, commuting, cost of living, health outcomes, recreational amenities
“Basically, what site selectors and CEOs see when they’re looking at our market, that’s what we want to see and we want it to be front and center for us,” said Saucedo-Herrera.
The scorecard includes the metro areas of Austin; Charlotte; Dallas; Denver; Jacksonville, Florida; Kansas City, Missouri; Nashville; Phoenix; Seattle; and Washington, D.C. Among those, San Antonio came out with a scorecard rank of 9, ahead of No. 10 Jacksonville and No. 11 Kansas City, the lowest-performing cities.
While San Antonio ranked a 3 for business environment, its total score was driven down by a rank of 11 for economic performance, which includes wages and poverty, and 10 for quality of life. Austin was ranked the highest-performing city.
The color-coded scorecards create heat maps that visually indicate both San Antonio’s assets and challenges. “Obviously, one of our assets is that we’re diverse and culturally rich. It’s a beautiful thing. And we’re growing exponentially,” Saucedo-Herrera said, while many communities’ populations are declining.
One of the city’s greatest challenges, however, is low educational attainment, and that’s despite an upward trend in the number of professional certifications earned during the past few years.
“We can talk about wanting to compete for headquarters all day long, but when site selectors see [a low score] on educational attainment, we’re not even making the radar,” Saucedo-Herrera said. “So until we do something here to address this long-term, we won’t be successful in working bigger deals.”
In early January, a national commercial real estate expert speaking at an Urban Land Institute event challenged local officials to stop thinking of San Antonio’s competitive advantage as being a low-cost city. Saucedo-Herrera agreed, but said it’s been difficult to change that narrative.
“In the eyes of so many businesses, their decisions, always come down to dollars and cents – it’s got to be an economic decision for them,” she said. “It’s great that we have a competitive cost of doing business. That’s one of the main reasons Navistar is here. But all of Navistar’s questions centered around available talent. So I’m talking about how you can have a great quality of life in San Antonio at an affordable cost to talent, but I don’t think that is a value proposition when we’re communicating to business.”
One goal for SAEDF is to work on graduate retention – keeping local university graduates in San Antonio through direct-to-work programs. Another includes working more closely with development partners, including the City and County, to improve the “ecosystem” around certain industries, such as cybersecurity.
It may also involve partnering with officials on mass transportation issues and the airport’s Strategic Development Plan, which could mean SAEDF contributes to incentive programs that attract airlines and more nonstop flights.
Over the last couple of years, the SAEDF has raised about $500,000 a year from the private sector to augment its $4 million annual budget. “Which is a great thing because the private sector is buying into our vision,” Saucedo-Herrera said. But it’s not enough.
“We’ve incrementally fundraised, and we’ve incrementally improved our organization,” she added. “If we want to see the step-change I’m talking about, if we truly want to be a top-performing economic development organization, a regional economic development organization, we probably need to double the size of our budget.”
She called the fundraising goal a “heavy lift” in a city with competing activities and needs, several chambers of commerce, and few corporate headquarters. But last year’s successes make it a good time to up their game, she said.
“There’s so much momentum. There is so much excitement right now around economic development and the need for San Antonio to step up,” she said. “I think the EDF is well positioned to do just that.”
On Monday, SAEDF announced that Craig Boyan, president of H-E-B, will lead the organization’s executive committee for 2020, along with four new private sector leaders: Randy Smith, CEO of Weston Urban; Rolando Pablos, business development consultant and former Texas Secretary of State; Cynthia Teniente-Matson, president of Texas A&M University-San Antonio; and Michael Lynd Jr., CEO of Kairoi Residential.