Odessa Development Corporation - Regular Meeting

Any housekeeping or anything else? For Carlton's sake, if we could go around the room and just give our name and who we're representing as far as if you're like City Council, ODC Board, what have you. And if you don't mind, we'll start with you, sir. Henry Mitchell, District 1, City Council.

Ronnie Phillips, ODC Board.

Nancy Mangroo, ODC Board. Crystal Taylor, City of Odessa. Peggy Dean, ODC Board.

Tim Benjamin, ODC Board. Brian Bill, ODC Compliance. Mike Whitrow, ODC Board.

Melanie Holman, ODC Compliance.

I'm Tom Manske with Economic Development Staff here at the Chamber.

Monica Schonder with Economic Development here at the Chamber.

I'm Renee Earls with the U.S. Chamber. Kathy Vaughn with Economic Development.

George Payne, Economic Development. And so a little housekeeping for anybody new in the building. The restrooms are a catty corner over there. If you need them, this is a casual thing. So if you just need to get up and go walk out or take a phone call, please feel free to do so. You're supposed to take an economic development sales tax workshop every couple of years. We haven't in a little while, and we've got a lot of new faces. So rather than send people scattered to all the workshops around the state, we brought in Carlton Schwab. I'm fortunate I get to work with Carlton quite a bit through TEDC. Carlton's been president and CEO of TEDC since 1999. Another century. Another century, there you go. Fifth grade in 99. And y'all believe me. I was in junior high. Give you a little bit of his background, though, so you know, because he is considered an expert on economic development. In 2012, he was named by Governor Perry to the Select Committee on Economic Development, a committee created by the 83rd Texas Legislature to review economic development policy for the state of Texas. In 2015 and 16, he was chair of the advisory committee of the Texas legislative conference. In 2017, Mr. Schwab was named honorary life member of the International Economic Development Council. He's also a life member, which he was named in 22, of the Council for Development Finance Agencies. Prior to his tenure at TDC, he served as Director of Development at the LBJ School of Public Affairs at the University of Texas at Austin. And I'll just remind you that's about 27 miles north of Texas State University, just to keep that on the table. From 89 to 96, he was director of Deloitte Consulting, where he specialized in corporate site location analysis and economic development strategic planning. In other words, he was a site selector. You hear me use that term a lot.

Don't hold that against me.

We won't. Y'all make us work really hard. What else did I want to highlight here for you? He spent time working, oh, because this is close to home. He spent time working in economic development at the local level, having served as vice president of the Lubbock Board of City Development from 86 to 89. And he likes to, he raises registered Texas longhorn cattle. And is a Texas certified master naturalist. Affiliated with the Balcones Canyonlands Chapter in Austin, Texas. And unfortunately for TDC, he's leaving us. I wouldn't call it retirement because I heard you say consulting. But it's February, end of February. And that's because it will be how many years? 28. 28 years. So with that, I'm going to turn it over to Carlton Schwab. Wow.

Thank you, Tony. You're very nice. Thank you. How y'all doing today? Wonderful. I thought I would start just to, and we're going to, I want this to be really relaxed and to feel free to stop me, ask questions, you know, just so this is time where it's not just me talking. Monica, could you help me pass these around? Here's some of the materials that we have that we hand out as part of these workshops that we think are important. The first one is something, what is economic development and why it's important. There's a lot of folks out there that either don't understand what economic development is or why we even employ it. We've been so successful in the state for such a long period of time now that many people have taken our success for granted. And it's like, hey, we're Texas. We don't need the economic sales guys. We don't need anything. Growth is going to come. And, you know, sort of like I call it the we're Texas, you're not kind of attitude. When in reality, we have a lot of hardworking people men and women like Tom, his staff, and the board here that are responsible for the success of this state. And I would add to that the fact that 35, well, 37 years ago now, the legislature passed the ability for communities to tax themselves to create economic development organizations. We're going to talk about that law a little bit later on. I promise you I won't kill you with boredom on that. I've cut it down to about six slides. But nonetheless, that vehicle changed the game for us in the state. You know, to some people who are in 37 years, that goes a long, long time ago. To others, myself included, wasn't that about 15 minutes ago? You know. Yeah, it does. But what it did was create resources at the local level for the citizens of Odessa to invest in an economic development organization paid for by the citizens of Odessa, and then that organization spends money to help grow this community. And that was done over 700 times in this state over those many years. And the number's now about 784. It fluctuates. Some people, some communities rather, they vote out their EDC, or they change the sales tax rate, or they get out of it entirely. But it's a phenomenon that has now, some version of it, been replicated in 25 other states. So we are a bottoms up in the state, in our state. And think of if we were like Georgia or Indiana, places I've worked in on a number of occasions. You want to do a project in Georgia, you're calling the capital, and somebody's going to say, and you say you need 150 acres, you need to be by an interstate. Someone there is going to punch into their computer and say, Here are the three locations. In Texas, we don't operate that way. We're out there on our own. We're selling ourselves. We're promoting our communities with the help of the state economic development organization. But it's really a co-equal kind of thing. So again, I mentioned one of the things you're going to hear from me today is local control is what got us here. Local control is under assault at the Texas legislature. Everybody in this room needs to know that. Should we ask this to the press here?

No.

Good. Good. That's a good thing. So be mindful of the fact that and don't take for granted what you have here with the economic development sales tax. Sorry. Every session of the legislature, there are attempts to really water it down, eliminate it, turn it into essentially sales tax to support municipal government, quite honestly. So we have to, we've been successful for many years preventing that from advancing through the legislature, but it's scary. Every session it comes back, somebody will file a bill, two or three people will file a bill, and it will be to water down the ED sales tax. And for many communities, that will be an opportunity for them. I'm not saying Odessa. But for many communities, that would be an opportunity for them just to shut down their EDCs.

So did you say, Carlton, did you say that the purpose is the sales tax to support municipal government?

Well, it could be if it's watered down. That's what it will turn into.

But that's not the eye. That's not.

It's economic and community development. Type A being traditional economic development. Type B being more community development. So another publication that we have in the handouts today is this local economic development guidebook. Those of y'all who have been around a long time know that TML produced the Attorney General's office used to produce TML took over when the AG's office got out of economic development about 10 years ago and produced a 150 page document and so what we tried to do about 3 or 4 years ago is boil down the most important parts of that 150 page document throughout a lot of the footnotes and legal references and things like that and tried to hone in on what's most important for our economic development communities, members around the state. And then this little four-pager is everything we can cram onto four pages that kind of succinctly identifies what the ED sales tax is all about. So, any questions so far? Y'all better be taking notes. We do have a quiz. In order for you to get your little certificate on land. No, we don't. Did we decide it? Yes, it's not working. I'm happy to question it.

You ready?

Yeah, I'll just do it. A little bit about us. We were founded in 1961. It was a time in the country when industrial development around the country was really, really becoming important to economic expansion post-World War II. And our organization started at that point in time. And it was the Texas Industrial Development Council. many, many years, economic development was considered industrial development. And we were the TIDC for 31 years. More than half of our history, we were the TIDC. In 1992, we became the TEDC. We're now up to 1,200 members, which makes us the largest association of economic developers in the country. Which, believe it or not, we're only slightly larger than you would think California, New York, even Illinois. Second largest is Georgia. Because if you know anything about Georgia, the state, the massive Atlanta metro area has so many municipalities. And they also meet once a month in Atlanta and have 300 people going to a luncheon. So we're trying to stay ahead of Georgia. And we've managed to do that, but certainly they don't have the folks like Tom that are that number of members. A lot of their members are what we would call affiliate members. They're in the real estate community. They're board members of EDCs. They're alongside economic development organizations. We're governed by a 30-member board, a nine-member executive committee, and Tom is on our board. Tom is going to be one of those rare guys that's going to serve on our board longer than four years because he took the place of somebody who left the board. So we just figured that out the other day. You got five years with us, but you like it a lot. Well, just, hey, be glad you got hair. When I started this job, I had a big box of hair. So what do we do? We do what professional associations do for their members, and that's continuing ed, conferences and networking. We get together three times a year. We have a winter meeting, generally mid to end of February. In the odd-numbered years, that meeting is in Austin because the legislature's in session. and then we have a mid-year, we just had our mid-year in Plano, and then this year our annual conference will be in October in Houston. We do resources and publications, award programs, and then we spend a lot of time in those, we spend a lot of time in the legislative years at the capitol advocating for strong economic development policy, defending what we have on the books. And you might be surprised how much of our effort is simply to keep the wolves at bay, just in terms of people who don't like what we do in economic development. But again, we've been successful. We anticipate that we'll continue to be successful. We've also had some defeats in the last couple years. We'll talk about those a little bit later on. So we're gonna talk about economic development, how it works, why it's important, what the best economic development organizations do. Got a couple little modules in here about the law. We'll make that as painless as possible. Talk a little bit about the sales tax in the legislature, The comptroller's role, if you're looking for a state role other than the governor's office having its own economic development organization, the only place now is the comptroller's department. And what's good about what they do is they're good places to gather information. So, for example, you can get into their database and look at every tax abatement program in the state. every Chapter 380 or 381 agreement, and find all of those kinds of things to see what other communities and cities are doing. And then we're going to try to answer, why is Texas competitive in economic development? What are the role of incentives? And what does Texas need to do to stay competitive? Again, questions?

Sorry, I don't know if this is relevant, but is the effort against these EDC programs, are they trying to weaken the private sector?

It's really coalesced around the use of incentives. Okay, that's the main opposition that, you know, they view they. There's an organization called the Texas Public Policy Foundation, which is funded by prominent members of this region. And they view or try to encourage the view that if you provide incentives for a data center, that you're engaging in corporate welfare. And they use that, if you look at their chapter on economic development in the first paragraph, the last, it's hard to read their legislative materials, but the last one was something like economic development, or as we refer to it, corporate welfare. So it's very harsh. These are big funders of political campaigns. So there are, on the House side, upwards of 40 members that are influenced heavily by this organization. The Senate is not a bit friendly to what we do. Again, I'm glad the press isn't here. I'm just being blunt. And we really haven't engaged the Senate, or the Senate hasn't been engaged. I told somebody this recently, and it was pretty astounding. I went 10 years without testifying on a Senate bill. That's how little they were interested in, invested in economic development policies. policies that we got out of the House were kept to the waning days of the session. They had the hearing on the floor. They voted them out with voice vote, so they didn't have to be on record to explain why they voted for us socialists, right? Us corporate welfarists.

Well, the misconception is that If they eliminated the EDC, that tax would go back to the taxpayer and it would not.

Correct. I mean, that's one thing. And then another thing, we'll talk about this. Another thing we've been criticized repeatedly over is, hey, we're a growing state. What about all the infrastructure needs of communities? Well, if you go to the comptroller's site and look at the reports, that the EDCs have to submit. They're submitted for two-year periods, and they lag a lot. But the most recent one showed that there's about $700 million a year, not a small sum, from EDCs around the state that are dedicated to infrastructure, supporting infrastructure, which you all can do, you all have done. It's economic development, right? So we kind of, throw that back at them and sometimes it works, sometimes it's like they don't care. But it is a wonderful resource for our EDCs. If we wouldn't have created, one of the things that I learned, I moved away having worked in local economic development and then I was fortunate enough to work in 35 states. I lived in Chicago for seven years, well, five, and I took the job back to Texas with me for five years and then moved back. But one thing I learned was how much more prepared other states were for economic development than we were. Now, I'm talking about the period 1989 to 1996. But one of the reasons they were prepared was they dedicated monies globally to pay for an industrial park and fully develop it. I remember having gone to economic development school and trying to convince, as a young economic developer at the board in Lubbock, hey, old Farmer Jones' field out there on Loop 289 is not an industrial site. Because once you started asking the question, where's the nearest water Oh, it's three miles that way. What about sewer? It's five miles that way. That's not a site. But what I found was, traveling around the country, that that was like, those were the basics. So if you think back when we started, when we passed the law in 1989, those early monies, many communities said, we've got to have a product, and a product is an industrial site or a business park, or something that's ready to go to meet the needs of of expanding and relocating the country. So it got us in the game in a hurry. Now, for such ancient history, a lot of these folks don't want to know about economic development, but, man, it got us in the game, and it got us in the game fast. And, you know, hey, the proof is in the history of the success that we've had over the last 30-plus years. I toss this out because I've been wanting to annex Colorado for a long time. Doesn't every sensible Texan spend some time in Colorado from July to September? And y'all are that much closer than I am. Anyway, I offer this because our perspective is often outlandish. I mean, we're pretty self-impressed about our success. One might argue we have every reason to be. I'm not saying we don't, we do. But we have to understand that everybody wants to kick our butts. And the rest of the country feels about us like we feel about California. We're not loved. out there. And we want to get beat. Yeah, you don't believe in it, do you?

No, I do not.

It's true. They don't like us. They like to beat us. And, yeah. Yeah. So, just bear that in mind. And the other thing I'm trying to do is dismiss this notion that we get every project that comes down the pike. It's not even close. It's not even close. As Tom will tell you, if... of all the leads he gets in any one year, if 15% of those leads turn into an actionable kind of relationship, that's good. If 3% to 5% of those actually result in visits, that's good. Is that fair? Yeah. I mean, it's way up. At least when I was in economic development, the local level looked at it. This is a tough business and it's often years in the making. Everybody has to understand that. This is not instant gratification at all. Okay, let's talk a little bit about the way we view economic development. First of all, citizens of Odessa, Texas had an election. They decided to fund an economic development corporation, so they determined intentionally that they want an economic development organization. Generally speaking, it's about retaining existing businesses, creating new and attracting new jobs, fostering growth, and building the tax base, and then being part of a collaborative So how does it work? Well, it's about this concept called primary jobs. And you all have, think about Odessa's economy as an oil and gas production machine. Oil and gas production is a primary economic activity. You all have an incredible primary economic development base. The problem is, of course, you'd like for that to be a little more diversified. And that's one of the reasons y'all are in business here. Yeah, it's important to dance with Ubrania, but it's also important to be able to have other kinds of employment, other kinds of investment, because we all know that the oil and gas industry ebbs and flows. But it's all about producing more goods or services that can be consumed by the local economy, the product is then sent outside of the region, money comes in from outside the region in the form of paychecks, and then that money is churned through the local and regional economy. That make sense? Now you all know Y'all know more about economic development than most of the members of the Texas legislature. I'll let y'all decide whether or not that's a compliment. I said that one time. Coming out of COVID, I got invited to speak to a group. I was just chomping at the bit to get out. Weren't y'all, you know, And there was an event in Northwest Austin, and they said, we want you to come in and talk about how economic development works. And, you know, I said, I'd love to. What do you want me to do? He said, well, so it was something like this, but it was a little more fundamental. And I walked in there, and there were 300 people in there. And this was the Texas Association of Property Tax Professionals. Texas Association of Properties. So appraisers, county appraisers, basically. So I'm going through this, and I said something like along the lines of what I just said. I said, you know, I was teaching them about how economic development works. I said, and now, now you know, like this, and I looked up, and well, before I looked up, I said, now you know more about economic development than 95% of the Texas legislature. And I look, like I'm looking at Tom, and there's a state senator sitting there. Well, he was one of that 5%. Yeah, exactly. He laughed. I was glad he laughed, but I was like, oh my God. So private jobs are in manufacturing, professional services, logistics, generally speaking. Again, they're producing a good or service that... They produce a good or service that's sent outside the region and the money comes in, churned through the economy. So that churn enables folks to spend money in grocery stores, service stations, restaurants. So, you know, when people say, man, what Odessa needs is the Trader Joe's. Well, There's a reason you don't have a Trader Joe's. Trader Joe's follows the generation of wealth, follows the creation of primary jobs. And somebody at Trader Joe's, do y'all have a Trader Joe's? Oh, okay. Somebody at Trader Joe's has determined there's not enough of that yet in Odessa, Texas. It's like, you know, you go to, over the years, you know, I've gone all over the state and, you know, got a workshop in abilene next month and somebody in abilene will the mayor of colin you know will come over to me and say you know what we need we need a walmart a walmart and i'm like mayor look you don't have a walmart because you don't have enough going on to support a walmart you don't have enough economic development the mayor thinking that the walmart itself would be an economic development driver. It's not. It's simply taking the disposable income of citizens within a reasonable commute zone of that Walmart and satisfying their needs for whatever it is they're looking for. But it in and of itself is not a driver. Now, a Walmart distribution center would be, of course.

But then you get into your A or B class, right? I'm sorry? You get into your A or your B class.

Oh, you mean type B corporations? Yeah. Yeah, well, we'll talk about that. Yeah, okay. Hold on to that thought. Here's some examples of the thousands of primary employers in taxes. And, of course, here's some of the employers here. Is this... Is this distribution center here still going strong?

Oh, it's gone dead. They're now up to... Is it Dollar Tree now? It's Dollar Tree. It used to be Family Dollar. And they were two shifts up until about a year ago. Now they're running three shifts. Oh, that's wonderful.

Listen, I can remember a time when that project was huge here. This is during the doldrums in the middle of it. Big downturn. in the oil and gas economy. And I mean, it was celebrated from sea to shining sea. And it was a big win because, and you know what? At the time, it deserved to be celebrated. You know, you might look at that, well, yeah, okay, those are primary jobs, but they're not anything like the primary jobs provided by Halbert. Doesn't matter. They're still contributing to this local and regional economy. Seems like that was about it. five years ago and I bet it was 20. It's more than that, yeah. Yeah, it's more than 20, yeah. So what we're about is the multiplier effect, okay? I don't have, there's a lot of different opinions on what an oil and gas job, and there's so many different categories of oil and gas production jobs that It would be hard to pinpoint what that is, but I've seen it as high as 7 to 1. So 1,000 jobs in the oil and gas sector would produce 7,000 additional jobs, that kind of thing. It may not be that high. It may only be 4 or 5, but it's still a lot. It's a lot. It's one of the strongest multiplier effect jobs that we have. So here's the list of the economic activity. Over here are the additional jobs. This is a pharmaceutical manufacturing facility with 500 jobs, average wage of $67,000 a year, which, by the way, is low. How many of y'all have heard about the Eli Lilly facility that's going in Houston? They're talking about the average wage there being $115,000. So one wonders how many people that will be. Of course, the initial estimates are always going to be higher than what actually ends up happening. But still, that's good multiplier effect kinds of economic development. So kind of reviewing. Local government benefits from economic growth and development. Retail expansion is a product of economic development, not the cause of it. And primary jobs are the foundation of economic development. Now there's a couple other things that can occur in local economies. I just wanted to mention transfer payments. A social security check is a transfer payment. All of us who paid into Social Security at one point in time will start getting it back. Well, that money was sent, let's say, theoretically to Washington, D.C. Now it's coming back. That's money from the outside that contributes to the churn. So, obviously, if you're a place like Georgetown, Sun City, you have mainly wealthy people retiring in Sun City. They're not only bringing Social Security checks, they're bringing their 403B, 401K, pensions, all of those kinds of things, and that too contributes to the churn. Tourism, tourism generally is thought of as a secondary economic activity. You could probably make the case that in Aspen or Telluride or someplace like that, It's a primary job. I mean, just go there and rent a condo for a weekend, right? But tourism is also, if you think about it, it's money coming from the outside and then dropped in your community and then that too is turned through the local economy. The problem is that's disposable income that's dropped and turned. It's not the highest. It's not the primary job. Make sense? Any questions before we get into this part? Not all right? It's a good teacher. You know, we talked about this a little bit earlier. We now have 37 years. Well, next month will be 37 years from the time the first EDCs passed their sales tax. And, oh, by the way, Abilene was the first. Abilene was the first EDC. passing the new sales tax but so we have all this experience and we can talk about what economic development organizations do they organize the economic development effort they lead a team of players and they generally focus on all of these if not more of these kinds of things as part of their core activities so I know Tom y'all y'all do Certainly workforce, marketing, recruitment, do business retention, expansion. Do you all do small business development, or is that handled by the SBC?

We send a lot of traffic.

Yep, yep. And, of course, periodically you're updating a strategic plan. Strategic, you know, it's amazing. Everybody does a strategic plan now. I used to ask in the bigger sales tax workshops how many communities had done a strategic plan. There'd be like three meat arms raised up. And now, if you ask the question, everybody in the room, they're doing something. Even if it's on the back of a napkin, it doesn't matter. I mean, have a plan. Nothing ever goes to plan. But if you've got a plan, that's... some guideposts for you, but then be willing to reassess the plan. And the way things change in the world now, that's like every two years. You know, it used to be every five years. It's every two or three years. But having a plan is part of the important business of selling the EDC or the ODC, the ODC locally, do y'all have old man coffee in Odessa?

We have old men that drink coffee.

But old man coffee is like where old men sit around and gripe about what's going on. but don't really have any solutions.

No, we don't have enough farmers. You'll have to ask Tom about that.

We don't have enough farmers for that. Both of y'all don't win.

Gotcha. Well, one of the things I like to say is that everybody in this room needs to have an answer, even if it's just two or three things to old man coffee. what the hell are they doing down there in ODC? Well, I'll tell you what they're doing. A, B, and C. Doesn't have to be anything more than that. And shut up old man coffee, at least for a few Friday mornings, right? But yeah, most people nod their heads when, if I have to explain old man coffee, they're like, oh yeah, man, I see Bill, Ed, Joe, oh yeah, those guys. Anyway, again, here's some of the things that economic development organizations help their communities through and do. And again, not to sound paranoid or anything, but if this goes away, who does this stuff? Who does this stuff? Nobody that I can think of. My friend Brian Kelsey came up with this a couple years ago, and I was like, man. And I think Tom will tell you, one of the greatest things about being in economic development is every day is different. Every day's challenges are different. Sometimes they're, you know, it's oh no, not that again. But most of the time, it's very interesting to And one of the things that I go back to all the time, I work in a business where I'm working or trying to help people who are working to make other people's lives better. You know, when y'all get a project, it affects people's lives in a positive way. You know, other than making family and faith the most important thing, a person has a job. You know, I once came up with the, there was a minister sitting with Monica, and I was just riffing, feeling my oats, and I said, you know, praise jobs from whom all blessings flow. And I said, was that blasphemous? And he went... Okay, why are... So, just kind of summing this up, why are economic development organizations important? And this, too, is something you can tell the guys at Old Man Coffee, right? One, especially in Odessa, especially in Birmingham, y'all are always looking to expand your economy a little bit. I mean, it can't hurt. There's always going to be oil and gas. There's always going to be economic success related to it, but everybody in this room knows the downturns and the pain that that often inflicts upon the local economy. You're controlling your own destiny. You've decided that we're going to compete, man. It also, I would say, it also enables you to say, no, we're not going to compete for this. We're not. They want too much. We're not willing to give that. I want folks to understand that's okay. I'm not advocating that, but I will say that if there's a company out there that's asking for the moon, look at their financial. I've seen way too many of those. I mean, we used to see them in Lubbock all the time. The company... It's making a decision on the community and why they know that Odessa is one of the places they can make money. When they've decided that, then, and you know they're legit, then you can fashion the kind of incentive agreements that help the project across the finish line and ensure that that company comes to Odessa, Texas. By having the EEG sales tax, you've told the world we're competing. We're competing for investment and that jobs are important to investments. A couple of other things about economic development organization is that y'all are connectors. And that's just a sample of the organizations y'all are connected to. And then a couple of other things I'd like to mention. Economic development has shifted a little bit away from being solely a business attraction. There's a lot more support now, serious support, about business retention and expansion, supporting entrepreneurship, and then public-private partnerships, working with workforce development organizations, and those kinds of things. Bringing in new companies is still very important, but it's not as widespread as it used to be. And in fact, using existing businesses as a way of trying to attract new businesses is also a trend. Again, strategic plan, understanding the local economy, not only strengths, weaknesses, opportunities, threats, but also understanding as an organization what economic development is, but just as importantly, what it is not. Okay. I'm going to drink some tea. Y'all got any questions?

Maybe they need some coffee.

Yeah, they probably do. I've seen somebody nod back there. Is this guy ever going to quit talking?

I'm glad that you talked about the process that it is to get businesses to come. There's so many things. I've only been here a year in this department, but just to see all of the different people you have to talk to, the landowners, it's a process, and yet it feels like there's very little wins, but the work is happening. I mean, it's happening consistently. So, you know, I wish that was more known, I think.

You know, just because of the stuff I see come across my desk and stuff I read daily, and I asked Ray about it at dinner last night. You know, we didn't get into specifics. We talked a lot about data centers. We talked about, you know, other stuff that was going on in the state. But it's been a long time since I've seen the state's economy this, and he picked the right word, sluggish. I think our economy is sluggish. Well, you might say, well, what about Toyota in San Antonio, that big expansion? Yeah, but those of us in the business knew that was coming for two and a half years. It was like, what are they waiting on? What are they going to announce? We knew that was going to happen. Dallas now with the stock exchange, and they still get a lot of white collar jobs have been pouring in there. But manufacturing is pretty much nonexistent. I get to see all the reports of the manufacturing expansions and things like that in the state. Been dead in the water for months. I keep looking for those. I keep looking for Waco to land something. Temple. Sagini. Sagini had a little bit of an expansion. Caterpillar recently. But these things are slow going right now. And then I look at my hometown. I can't remember a time when there were as many layoffs in Austin as they're happening. Again, technology taking people's jobs is what's going on. So, you know, to think that things are gonna be like they've been for the last, much of the last 20 years is a mistake. We can't take that, continue to take it for granted. We gotta work really hard now because we don't really know I don't think anybody knows the impact of AI. I mean, there's some really, there's some really scary scenarios. 30% of the country being unemployed, eventually. That's not good. That's not good at all. And I just throw that out, telling you what I read. Other people say everybody's gonna adapt, The good AI is going to win over the bad. There'll be a consolidation in the industry. But I can't help but think it's a bubble. And I'm worried about the stock market. Because there's a lot of speculation going into it. And that will affect everybody when that does occur. We've seen it in many other Again, remember the dot-com era? I expect that there will be something like that related to AI.

Well, what kind of job would you have for somebody that was in technology that all of a sudden lost their job and had no manual labor skills? What do you do with something like that?

Yeah, exactly. And that's the kind of jobs that are... I've got a neighbor that worked in software. His... Jobs being gobbled up by AI. And he's a really smart guy. But he hadn't got a job yet. And again, in a place like Austin, you're going to see a lot of that. We have some conflicting data on 2025. The state says that we created 147,000 jobs. And that's quite possible, new jobs. but it did not take into account the layoffs. The Federal Reserve Bank of Dallas says Texas created zero jobs in 2025, a net zero. I'm sure the answer lies somewhere in between, but I can't remember when that happened. Maybe 2008, 2009, you know, during the, yeah, that kind of slowed down. So we're sluggish, we're sluggish. You know, hey, we don't need to panic. That's the way business works, it works in cycles. But I do believe we're in kind of a down cycle.

I have a question. Yeah. You know, I think an economic development organization is really important in a community like Odessa because we will never compete with San Antonio or Dallas or Austin. Have you seen any communities have a lot of success in educating and getting the community at large to buy in on the importance of their economic development organization, and what did they do?

Great question. That is a great question. You know, I'm going to have to think about that a little bit. I think there was a time when it was kind of a natural that everybody supported it. I'm kind of thinking about there's so many fast growth areas that there's a tendency for people. My hometown, I grew up in New Braunfels. When I grew up in New Braunfels, it was about 18,000 people. It's 120,000 people in New Braunfels now. And everybody that's there is the last person that wants to be there. They want to shut the door. They, I mean, the fighting among local politicians there is unbelievable and a lot of it has to do with economic growth. One of the things I like about going to West Texas and going to East Texas in particular, there are people that still want jobs. If you go to a lot of the Metroplex suburbs, a lot of those people again, same attitude. I got my acre of paradise. I don't want any more traffic. And sadly, a lot of them, which you have going on in Frisco, I don't want anybody that doesn't look like me. And that's going on out there. So, just in terms of sort of rallying for economic development, I haven't seen it in a while. I really haven't. I mean, just where the Because we haven't, we're spoiled. We haven't, things haven't gotten that bad. I see a lot more fighting than I do collaboration. You know, Amarillo was a place that always was really, really pro-economic development until about three years ago. And they got into crazy political arguments and You know, they've never been the same. They have never been the same. And it's tough to do economic development in Amarillo. And there's a lot of people in Amarillo that know that. The business community knows that. The business leaders, for the most part, know that. But the Facebook warriors don't. They don't care. And they don't think about it. They have no greater... They need to be... sitting in here talking about how economic development works. So, another place...

There's not any compelling piece of evidence that you've seen somebody market to the Facebook warriors that was able to increase buy-in?

I don't know that they're buy-inable. It doesn't matter.

There's not anything that's going to matter.

I don't know that they're... We talked about that yesterday in a marketing meeting. And you can't be lying. how do you get across to the we call them cave people citizens against virtually everything it's not them that you're trying to persuade it's the people they're persuaded to read their stuff yeah right true yeah um you know i i there there are communities well i'll give you an example uh oh

Well, I was going to ask, and again, I never really know how relevant my questions are, but is there something of a comp model that you would see, like this is a paradigm of a community that I guess could be a case study? I know when they were developing downtown Odessa and we're still doing that, we were looking at case studies. Do you have any off the top of your head that you've seen that really flourished and kind of went from stagnant to growth as a result of this collaboration?

Yeah, let me think about that. I have a... One community I can think of that finally bought into economic development is the East Texas community of Marshall. I remember going to Marshall about 20 years ago. Nobody cared. They thought, we're at Marshall, we're okay, we're not ever going to be anything more. That place has some energy now. It did have energy for a long time. Another place I think that would really like jobs, but unfortunately they don't have a particularly strong economic development effort right now, is Wichita Falls. I mean, they're still pro-jobs. You know, Lubbock, is not anti-jobs. I think maybe talking to Lubbock Economic Development Alliance. But that was years in the making. Lubbock rejected the economic development sales tax three or four times before they finally got it. They're finally living up to the potential that a lot of people saw back when I worked there 40 years ago. And so it's out there. But I would contend it's not out there to the extent that it should be. It's not out there because so much of the dialogue is controlled by the keyboard warriors. And it's not out there because we're spoiled. We're spoiled. State as a whole is spoiled. And I just hate to see that. I hate to see the fighting and lack of understanding about how important this stuff is. And I'm telling you all this repeatedly today about how important it is because I'm telling you every session of the legislature in the last four sessions, the legislature has taken stuff away from local government. And they made it harder on them to They made it harder on the cities to function, and the counties to function, and the school districts to function. So bear that in mind when you vote for your state rep and your state senator. Where are they on issues like the ones we're discussing today? It's funny. I worked in the legislature years ago, and the prevailing wisdom back then was that the legislature would happily give control to the local level. Local level didn't argue about it, but they just said, yeah, we're happy to do it, but we need some money to do it, right? And that's just flipped now, like so many things in politics and government. But be mindful of that. Protect what you have here. You have a good organization. You have good resources. You're trying really hard. This stuff takes time. And it takes a lot of time. And we're not in, going back to what I said about the economy being sluggish, the US economy is sluggish right now. The whole country is sluggish. These ridiculous tariffs have really suppressed investment. And I never thought I would see a A Republican administration should not be for free trade. And we're not right now. But the worst problem is we don't know what we're for. The Supreme Court said the President can't do tariffs, but he's still threatening tariffs. So do you think anybody is going to come and make a decision, a foreign investor, going to come to the United States and make a half a billion dollar decision to manufacture widgets in Waco, Texas? Probably not, until all this gets sent in.

I think that's a good reason that everything is sluggish, because uncertainty is a killer.

It's a killer.

You know, we can handle it. We know it's going to be bad. We can handle it. We know it's going to be good. But when we're uncertain, I think it just stops everybody dead in their tracks.

So the best, again, I get to do this great job where I get to go around the state and see what everybody's doing. The best organizations do these things. I think I mentioned, I buried the lead here on the slide before when I talked about elected officials are on board. Everybody knows what you can do in Odessa, Texas, what economic development is. and what it is not. It is not providing funding for the J.C.'s pancake breakfast. As much as J.C.'s would appreciate that, I'm giving you a really absurd example, but you know what I'm saying. I've said that before in some small towns and gotten mad at it. And then the best boards and elected officials know these 10 factors, strengths and weaknesses, where you are and how you compete in the region, vision and goals, strategy, connection between what you're trying to do to the city's policies, the regulatory environment of the city, the needs of the business community, the marketing message of the economic development organization, the staff of the EDC, and the stakeholders. You've got all that going, and I know you all do. You've got a good thing going. And finally, one other thing. You know, ideally, again, the best ways this works is the EDCs.

I'm sorry, we found the little, it needed the, what do you call this thing? The gong, gong, gong, gong. What do you call that? A dome.

Are you on to my slide?

We just discovered it. Yeah, we just discovered it. Oh, it's okay.

Let me get the slide.

The stick. The stick. Oh, there we go.

Again, the best UDCs, are entrusted, their boards are entrusted by the councils to be the voice of the business community. The board, as representatives of the business community, they facilitate the cooperation with the council, and they keep the staff out of politics, and they try to be as apolitical as possible. And the boards are all about policy and guidance and remain apart from the day-to-day. And again, I see that here. I see that in many places. To me, this is the best recipe. And it's tricky because cities want to have their eye on the EDCs. But they're a little different. You know, a lot of our old-timers in economic development, they were like, my God, I'm going to tee up this economic development project, and I'm going to take it over there, and, you know, I'll get counsel to support that, and then, you know, I'll go back to them six months from now when I've got the next project. It has to be a little more collaborative than that. And that's just a reality, again, a political reality at this point in time. the problem from an implementation standpoint is there's no guidance in the statute about how to do this. So you've got, you've literally got places that they name the board, they've got the right business leadership and literally pass the budget and say, see y'all next October. And The EDCs run with that. Sure, if they're going to do business incentives, they've got to come back and do those with the council. So you've got that at sort of one end of the spectrum. At the other end of the spectrum, you've got cities telling Tom how many pencils he can buy. It's absurd. But again, there's no guidance in the statute You know, we also like to joke that one of the great things about local government code 501 to 505 is that it's not very specific. And one of the worst things about local government code 501 to 505 is that it needs more specificity. So it just depends on the community. And I've seen how you all do it here. I like it. I like that the ODC is in the realm of the chamber. It's a good chamber economic development relationship. Don't mess with that. Don't mess with that. Okay. Y'all want to take a quick little break? How you doing?