Left to right, Economic Development San Marcos Executive Director Amy Madison, San Marcos City Manager Rick Menchaca and San Marcos Mayor Susan Narvaiz.
By the Newstreamz editorial board
We commend and congratulate the city government in San Marcos for its recent deal to bring the Spain-based biomedical company Grifols, Inc., into the city. We are heartened that such an uncontestable win should emanate from City Hall, which has been known to advance some odd schemes in the name of economic development. We believe this is a very good sign.
We won’t go so far as to say that the Grifols deal instantiates city government at its very best, but it’s getting close. Biomed is sort of the holy grail of economic development. Economists have been giving $30-per-plate speeches for years in Hays County touting biomed as the can’t-miss basis for economic development in burgeoning locations such as our little bend of the NAFTA trail.
Thus, the competition for biomed is no less than an article of faith among economic planners. On the day the city introduced Rick Menchaca as the new city manager in San Marcos, he began his response to a question about his preferences for economic development with, “Everyone says biomed,” as if to just get that out of the way. Menchaca went on to add, of course, that he would need to hang around for a while before truly understanding how the city could leverage economic development.
So, here we sit a year and a half later, and we have biomed. Not only that, but we obtained biomed in the teeth of a fierce recession that has done enormous damage to personal fortunes when it hasn’t driven millions into bankruptcy. It’s not like the good times are rolling. You won’t find a lot of towns on the globe that can brag about adding this kind of jewel to their portfolios during a very difficult 2009.
At full buildout within four years, we’ll have another 190 jobs at average salaries of $38,571, well above the average in San Marcos. We suppose that other biomed-related companies will appear in San Marcos, noting that it’s advantageous to locate near Grifols. Perhaps the College of Health Professions and the College of Sciences at Texas State can leverage Grifols, and Grifols can leverage them, into bigger and better developments.
And the incentives are extremely reasonable. The city will refund to Grifols about $1.8 million in personal property taxes over 15 years. The county will make the same kind of refund, adding another $2.1 million. Bear in mind, these are refunds of personal property taxes, which means machinery and equipment. The property taxes for land and buildings will not be refunded.
Best of all, though, the Grifols deal gives us hope that the city has people in place who can play economic development at the level this city needs. We look forward to more good work from the likes of Menchaca and Amy Madison, Executive Director of Economic Development San Marcos, both of whom started in April 2008.
Given all the strife about the controversial Springtown Center incentive proposals, we might sound as if we’re shifting with the wind. But we cut Menchaca and Madison a fair amount of slack on Springtown. They both walked into the middle of that movie, which goes all the way back to StoneCreek development that’s inexorably linked to the Springtown issue. We’re realists who don’t believe it’s reasonable to think newcomers could diffuse such a political hornets nest.
Maybe if Madison and Menchaca had their feet a little firmer on the ground last fall, they could have done something smart about StoneCreek, like insisting that Target give up its non-compete easement on its old Springtown property before the city gave away another $4 million. But they were just getting started, and the motives behind that boondoggle well preceded them.
We also commend Mayor Susan Narvaiz, whose political gifts approach the stuff of legend on the scale of San Marcos. When you’re trying to herd cats like the state government, the county, and the city while courting an attractive biomedical company with options, you need political muscle to bring it all together. Even if Narvaiz didn’t do all the lifting, there’s a pretty good chance the Grifols deal wouldn’t have happened without her.
Obviously, we sometimes disagree with the mayor, but she is undeniably a power hitter, and it’s good to have her on our side when we agree. That said, it’s pretty easy to agree about biomed.
The county also deserves credit, though reasonable county officials will tell you that the personal property tax refund for Grifols is a no-brainer, just like the county property tax abatements for the retail portion of the Seton Hospital development in Kyle. When economic development is at stake, the county isn’t necessarily proactive all the time, but the commissioners are always willing to make a reasonable deal.
Perhaps the Grifols deal marks another important economic development shift. For the last 5-7 years or so, all of the action on the Hays County corridor has been in Kyle and Buda. While San Marcos was notoriously gridlocked, despite being most ideally positioned between Austin and San Antonio, Buda and Kyle were on the move.
Under John Trube’s strong mayoral leadership, Buda brought in Cabela’s, then leveraged that victory into a nice sales tax base led by the Wal-Mart that followed. Kyle, crushed by surging residential development, took the initiative to build Kyle Parkway, and now the intersection of that road with Interstate-35 is about to be flush with two million square feet of retail and a 210-bed Seton Hospital. Meanwhile, San Marcos accomplished litle for ten years.
Now, San Marcos is back in the game. We certainly wish Buda and Kyle the very best, because it benefits all of us. But Buda, resorting to its podunk ways since Trube left town, is mangling a nice opportunity to bring in US Foodservice. And Kyle, because the down economy has slowed commercial development on Kyle Parkway, is so challenged by debt that the city staff is worried about a tax rate of 70 cents per $100 of taxable property value within two years.
Meanwhile, San Marcos has solvency, the nearest midpoint between Austin and San Antonio, a university that’s growing in so many respectable ways, and a true sense of place that Buda and Kyle both lack. San Marcos is neither heavily leveraged, nor is it encumbered by old ways that blind it to the future.
So, we pass along our compliments to San Marcos and its city officials. And we do hope, going forward, that Grifols victory, and not the recent Springtown fiasco, is the face of economic development as we strive for this great little city to become ever greater. At the very least, we’re beginning to believe, we have the people to make that happen.Email | Print