Future of the Four States
Texarkana enters new era of economic development
December 8, 2018
A unified vision of regional growth has led to a new initiative to boost economic development of Southwest Arkansas and Northeast Texas. Both Arkansas Governor Asa Hutchinson and Texas Governor Greg Abbott along with the Texarkana mayors announced the creation AR-TX Regional Economic Development Initiative, a new regional economic development nonprofit entity.
“REDI is a group that has formed with a board of directors that has put forth a lot of time, effort and personal finances to get this program off of the ground,” Texarkana, Texas, Mayor Bob Bruggeman said. “REDI will take a regional approach and will serve as a catalyst to promote economic development.”
REDI is dedicated to attracting and retaining businesses in the Texarkana region, and will work with both City Councils of Texarkana, Texas, and Texarkana, Arkansas, as well as the Chamber of Commerce on specific projects. The seven permanent members include Sonja Yates Hubbard, Cary Patterson, Emily Cutrer, James Henry Russell, Dean Barry and Steve Ledwell. These individuals have positions from being the president of TAMU-T to owning a manufacturing business.
“We instituted our own [nonprofit] corporation, and all of us have put [our] money into this. We have dedicated ourselves and placing our own money into this for five years,” REDI board member Dean Barry said. “We have gone out to raise other private money as well [because] we have to raise 800,000 to a million dollars a year for five years that we will operate our nonprofit with.”
The idea of REDI dawned in a daily walk one early morning with three Texarkana leaders.
“Chris Karam, James Henry Russell and I walk in the mornings together. Years ago, I started talking about how Texarkana was dead due to the lack of increase in the tax base in Bowie and Miller Counties in the past decade,” Barry said. “I kept screaming at the other two that Texarkana is nothing [compared to the rest of the State of Texas], so we have to change it.”
City officials, REDI and Texarkana residents all agree that a division between Texas and Arkansas in the past was the reason for the lack of economic development.
“There was not a concerted effort to try to get something done. I don’t think there has ever been anything like what we have established to try to get something done,” Barry said. “State Line has always been a bad place for Texarkana because [it pits] people against each other. I’d give anything for State Line to disappear because [Texarkana] does not need Arkansas fighting against Texas or vice versa.”
One of the factors that has sparked the creation of REDI is criticism of the little development that has taken place and that local businesses are the only way to truly undergo economic development.
“There has been activity in Texarkana, but when you bring in a new [chain] restaurant, all you’re doing is swapping dollars with another restaurant,” Barry said. “You’re not bringing in new money to Texarkana, [and] you’re not bringing in a business that’s bringing in new money for jobs.”
Economic development and how it is funded is commonly misunderstood. For instance, business attraction is only a small part of what Jerry Sparks, Economic Developer for Texarkana, Texas, does.
“Economic development is not one thing. It’s business attraction but also business retention and expansion. There is [another aspect] that we call gardening where if [someone] had a brilliant idea and wanted to take off with it, [the city] would try to help you grow your own business,” Sparks said. “Unlike REDI, [I] work for the city so that is a little different than most economic development organizations. Other organizations are commonly funded through a half cent sales tax, but we are funded through the general tax fund such as sales and property taxes, so we are slightly different.”
Texarkana’s strategic geographic position halfway between Dallas and Little Rock as well as major roads leading from New Orleans and Houston through Texarkana to Canada make the city ripe for growth. Not only are three Interstates projected to cross through Texarkana in the future, but the region also possesses an extensive railroad network consisting of three major railways and a close distance to many major markets.
“We are continuing to see a rapid increase of traffic on our interstate system, and we are poised for another interstate which is I-369 or I-69 which will mainly be an upgrade of U.S. Highway 59 between here and Houston. In the years to come, we are going to see more freight coming from the south because the port of Houston is being enlarged to allow larger ships and vessels to dock,” Bruggeman said. “As freight traffic comes from Houston, it is important that we have the right infrastructure to support that, and in some areas, we’re playing catch up with that. When we have three interstates passing through Texarkana, I can see us enhancing our distribution system and [attracting] distribution companies.”
Federally-funded projects such as the remainder of Interstate 49 to Fort Smith, Ark., and the stretch of Interstate 369 from Houston to Texarkana are expected to contribute the most to this growth from infrastructure. However, these mega-million dollar initiatives are years, even decades away from construction and completion.
“I was on a state advisory board committee for I-69, and dollarwise, it is a huge project. The section just between [Texarkana] and Houston is over $15 billion. Traffic will flow from the Panama Canal and the Gulf of Mexico to Houston and then up on I-69, so it will be vital,” Sparks said. “However, it is an expensive project and it will take a lot of political commitment to it.”
Texarkana leaders and other beneficiaries have lobbied state and federal legislators and governors to delegate state and federal funds for these projects with limited success. On the other hand, due to the recent completion of the section of Interstate 49 between Texarkana and Shreveport, leaders remain optimistic about eventually receiving the funds.
“I wondered how Louisiana received the federal funds to pay for I-49 from Shreveport to Texarkana, and I found out that they took some really big gambles. Louisiana told the feds that they would use unclaimed money as collateral, and they would put the money into building I-49, and they did,” Texarkana, Arkansas, Mayor Ruth Penney Bell said. “It’s going to take some thinking outside the box [for us to finish the stretch of I-49 from Texarkana to Fort Smith]. Somehow, we are going to have to get our senators and representatives to verbalize [the need for this project].”
One of the largest projects that will begin in 2019 will be a complete $30 million renovation of the terminal at the Texarkana Regional Airport. This renovation will allow passengers to board passenger planes using a skybridge, and officials hope that the new terminal will create more new flights straight out of Texarkana.
“The new terminal will not only have cosmetic improvements, but we also hope to increase ridership because many people will not fly into or out of Texarkana,” said Lisa Thompson, Public Information Officer for Texarkana, Texas. “Many people go to Dallas so they can get something to eat before, they have great insurance and good parking, but improving some of those things here will help get us more flights out of Texarkana. There are also functionality benefits such as we will soon have a jet bridge rather than having to climb the metal stairs to get into the plane.”
The relationship between both sides of State Line strengthened after the City of Texarkana, Texas, offered to pay the $300,000 needed for a federal study to be done over the new airport terminal this past year.
“In order to get the [federal funds] for our new airport terminal, a study had to be made. It had to be done, and it was going to cost $300,000,” Bell said. “As mayor, I knew the Arkansas side did not have the funds to pay for it, so I talked to the Texas side. They said that they would pay for it, and they did, and now we are getting a very nice new terminal.”
Since the federal government turned over lands formerly owned by the Red River Army Depot, the real estate west of Texarkana has been acquired and rebranded under the TexAmericas Center in 2010. Over time, the center will be turned into a large-scale industrial complex that is poised to be one of the largest in the Americas due to Texarkana’s location, making the region a strategic distribution center.
“That land next to Red River was privatized by the U.S. Army to use for a business park. TexAmericas Center is a state agency set up to market, develop and promote that property. In years to come when that mission is fulfilled, that agency will go out of existence, but for now, they are in the stages of getting up and going,” Bruggeman said. “They have had some success in utilizing existing structures as well as new structures being built on the footprint. There is also a railroad spur as well as close access to Interstate 30, so things are in place and ready for future economic development.”
The latest development at the TexAmericas Center is that a water pipeline will be built beginning in 2019 from Wright Patman Lake south of Texarkana to the center to provide water to future businesses at the center.
“We are going to have a new intake facility at Lake Wright Patman shortly, and we will run a big water line six miles from the lake to the TexAmericas Center,” Barry said. “I hope by 2020 or 2021 that we have the water line completed.”
Although TexAmericas Center and the Texarkana region has a lot of potential, that potential is untapped. The region has struggled to compete to attract new businesses due to various reasons such as a ‘brain drain’ of college graduates.
“I’m not sure a talented college graduate is going to move back and start their business here in Texarkana when they can’t hire the people they need to do their work,” Thompson said. “We have a good quality of life, good schools and a nice downtown, but it really comes down to people [wanting] to know that they can make money, provide for their family and have a secure way of life. If the workforce is not there and we are not investing in our communities the way we should be, then we know it is hard to attract these businesses or even college graduates to come back and start here.”
REDI’s ultimate goal is to provide reasons for young college graduates to want to return to their hometown including employment, quality of life and other factors.
“I want [young college graduates that leave Texarkana for college] with the talent that they have to say that they want to live in Texarkana. It seems like everybody’s in Dallas and that is because of all the opportunities that are there. We have to bring those opportunities here,” Barry said. “I don’t want Texarkana to grow into a small Dallas, but I do want to see Texarkana grow at a good, decent 5 or 6 percent [annual] rate and grow jobs.”
City officials have turned to the local workforce to fulfill job vacancies and debated on whether the workforce needs to be trained before jobs are available, or to heavily advocate to a business to locate in Texarkana so that jobs will be available and the local colleges can adjust their curriculum and programs to accommodate the needs of those jobs. However, officials do agree that once ‘the horse or the cart comes, the other will inevitably follow and create a rebounding effect.
“If we can get businesses interested to come here and invest their money, we will supply them with a workforce,” Bell said. “We are just waiting on the breakthrough— the one company with a bunch of jobs that will take the gamble to move to Texarkana and start the ping-pong effect.”
REDI is confident that local colleges can grow to accommodate the needs of local employers and vice versa due to past examples of close relationships between corporations and postsecondary educational institutions.
“The University of Texas at Dallas [exists] because of the foresight of the people who [managed] Texas Instruments. When Texas Instruments was started, they knew they had to have a skill level of education coming up for students to know in order to become employees,” Barry said. “We can do the same thing. There is no doubt that Texarkana has the ability and the institutions to [teach] the skill levels that we need.”
The city also acknowledged that tax incentives play a role but certain circumstances make giving these incentives to companies in Bowie County either difficult or impossible.
“In Texas, major distribution centers can get an exemption from property taxes called the Freeport Exemption. It is not offered in Bowie County but it can be passed on different levels such as school districts or within the city limits. Last year, some $30 billion worth of goods and services fell under the exemption, so it frightens people. It’s complex so no one wants to tackle it,” Sparks said. “It would look like [an entity] was taking away tax dollars from Texarkana College or TISD, [and that is frowned upon]. Maybe we can try it if we get the right project, but [otherwise] it will hamper us in obtaining major distribution projects.”
Cities and states have learned from Amazon’s pursuit of a second headquarters that businesses are primarily looking for an educated workforce and a location that provides them with the infrastructure they need to distribute their products.
“The first thing that was listed as being significant in bringing Amazon to [New York City and Northern Virginia] was education and the quality of education,” REDI secretary Dr. Emily Cutrer said. “I think education is something that really does help our community [grow], and it helps our students get jobs.”
Since the city’s economic development team is restricted to only funding specific projects, coordination with REDI helps get around this restriction since REDI does not use taxpayer money and can fund much more general initiatives.
“The city cannot fund REDI unless there is a purpose or a specific project. There is a very strict law in Texas that deals with the gifting of public funds. Plus, the city council has specific guidelines for spending money on economic development,” Sparks said. “If REDI brought a specific project, we could fund that. But for REDI, since they use private donations rather than taxpayer dollars and it is a nonprofit, it is able to do much more.”
REDI’s first agenda item is to hire an economic director to assist in making decisions that will impact the region.
“[We are] trying to hire the best economic developer we can possibly hire. We have already interviewed [several candidates],” Barry said. “We’re trying to find somebody that wants to be the best salesman [REDI] can possibly bring into Texarkana and this area.”
REDI, city officials and the Chamber of Commerce have all concluded that the specific location of a business moving to the Texarkana region does not matter citing that any jobs created in the region will end up benefiting Texarkana.
“[REDI and the city are] not biased toward Arkansas or Texas,” Barry said. “If we can put a 300-person business in Garden City, Arkansas, or New Boston, Texas, we would jump up and down to do it.”
Little was accomplished when the Texas and Arkansas sides of Texarkana fought over where a business should locate. However, the expression of support from Hutchinson and Abbott along with historic cooperation between both sides of state line in recent years has allowed the region to adopt a ‘regional mindset’ when dealing with business attraction.
“We have to operate as a region because a rising tide floats all boats. Cities [in the region] need to have the willingness to change a law or a zoning ordinance because thinking regionally is a mindset change,” REDI president Sonja Yates Hubbard said. “We need to be ready to jump on something because like Amazon’s second headquarters, some of these things happen very quickly.”
REDI admits that organizing an event that brought both Governors Hutchinson and Abbott together was a marvelous feat.
“It took a lot of effort to get both of the governors here at the same time. There are a lot of us in [REDI] that have a lot of political pool and we have the ability to pick up the phone and call people. That is what we are relying on big time,” Barry said. “When Governor Abbott was [in town], he said he wants something to happen here and I think Hutchinson does too big time. We have a lot of connections between certain people and that’s really going to help us when we get moving.”
Both sides have also made great strides in revitalizing downtown by transforming it into a residential area through various renovations. The mayors believe that once residences are filled, businesses will follow.
“I’m happy [for the Arkansas side and downtown] to be a bedroom community because eventually, stores will follow,” Bell said. “Dry cleaners and stores that have what people need will follow I’m hoping that those types of things will be our salvation [on the Arkansas side].”
Although some Texarkana residents have turned their backs to revitalizing downtown, city officials say that downtown is the heart and life of a city.
“I’m a strong proponent of downtown, and there are people who gave up on downtown five, 10, or even 15 years ago. But I’m an optimistic person,” Bruggeman said. “We’ve done some good things, and there’s a lot more work that still needs to be done [such as the Hotel Grim renovation], but I appreciate those who are willing to take the interest in purchasing a building downtown to renovate it.”
The downtown philosophy is consistent with the importance of maintaining an appealing aesthetic of the city in order to make a good first impression to visitors and possible new or relocating businesses.
“Appearance [of a city] is very important since it is a first impression. It is important that the overhead tower type lighting on the interstate is kept in good condition because [darkness] may suggest that a certain area is depressed economically,” Bruggeman said. “We built the ‘Welcome to Texarkana’ sign out to the west, and there is one to the east on the Arkansas side as well. For some people, these things don’t matter to them, but for others, it is what they remember and it enhances their experience.”
Officials recognize that even though Texarkana may give a solid attempt, businesses may choose another city above Texarkana due to the steep competition to recruit new or relocating businesses.
“There are always other cities that are trying to get the same projects as we are. When we are looking at a certain project, we think about what our competition looks like because it may not always be Tyler, or it may not always even be in Texas,” Sparks said. “We pull as much information as we can, and that can be used to help new businesses looking to start here.”
REDI is convinced that the Texarkana region is poised for growth and that all the pieces are in place to begin growth and to make Northeast Texas and Southwest Arkansas into an economic development success story.
“I’m not saying we are going to be successful. It is possible we may be a failure. I don’t think it is probable, or I wouldn’t be sitting here. But we are going to make every effort, the seven of us, to start and develop growth,” Barry said. “We do not have any selfish interest whatsoever. We are doing this because we love Texarkana, and we want something [amazing] to happen.”