FOR IMMEDIATE RELEASE: April 18, 2019

AEDC paves way for success, growth

 
 

ATHENS, TX: Six years ago, Athens Economic Development Corporation commissioned TIP Strategies, an economic development consulting firm in Austin, to develop a comprehensive strategic plan for AEDC.

The recommendations identified in the strategic plan incorporated input and ideas from key stakeholders and organizations throughout the city, as well as successful economic development practices implemented in other communities, with the overall goal of equipping AEDC to foster long-term growth and prosperity in Athens.

The economic development challenges Athens faces are not uncommon to rural communities. The state and the nation continue to urbanize as migration and demographic trends favor large metropolitan areas. As a consequence, most business relocations, expansions and formations in the United States occur in large cities.

This forces smaller rural communities to compete fiercely for new investment and talent to remain economically viable. To succeed in this environment, communities must be able to compete on cost. In the post-Great Recession economy, businesses are seeking locations that offer the best value in terms of land, labor and infrastructure.

Based on TIP’s research and analysis, AEDC’s strategic plan is organized around the core goals of higher paying jobs, workforce excellence and business vitality.

To accomplish these goals, four pillars, or goals, were established and are still used today as the main backbone of AEDC’s current strategic plan – sites and tools, marketing and attraction, business retention and expansion, and talent development.

AEDC’s biggest challenge is overcoming the lack of available shovel-ready sites, which are defined as having all the planning, zoning, surveys, title work, environmental studies, soil analysis and public infrastructure in place to the site, which is under the legal control of a community or other third party.

Let’s take a look at the first goal, sites and tools.

The objective of goal one is to increase the capacity to accommodate new investment and employment in Athens.

As previously stated, the competition for new investment prospects among communities and regions within the state and the nation are fierce. Cities and economic development organizations seeking to promote new job creation go to great lengths to attract and incentivize business relocations and expansions.

For corporate real estate representatives and site consultants, a key factor for site location is how quickly a site can be developed. Communities featuring shovel-ready sites and buildings have a significant competitive advantage in attracting and retaining businesses.

When this strategic plan was initiated, AEDC had minimal land to offer - a four-acre site in the industrial park and another nine-acre site located on Flat Creek Road. One of the tasks, under goal one, was to pursue targeted assembly of sites and buildings suitable for industrial and commercial development.

To accomplish this, in 2014, AEDC purchased 98-acres to expand the industrial park, and the following year, extended a roadway along with water and sewer. There are plans to extend Enterprise Street to FM 1616, in addition to a new roadway that will connect Enterprise to Old Tyler Highway. Along with this new roadway, utilities will also need to be extended, creating additional shovel-ready sites in Athens’ industrial park.

It was also in early 2015 that AEDC purchased 296-acres for the potential airport expansion project, which was identified as an opportunity for long-range development.

Most recently, AEDC purchased a 53-acre site on FM 1616 to further expand the industrial park, giving AEDC its largest tract of land to offer potential prospects and site selectors, as many of them are looking for larger sites.

A master plan was created showing an aerial view of potential tracts in the Athens Industrial Park, along with total and usable acreage, utility lines, nearby industries and access to major transportation routes. This map is used as a guide to help market potential sites to prospective companies and site selectors.

Today, AEDC is tasked with the management and development of current assets, in addition to pursuing the acquisition, development and management of new assets. It’s important to note that companies are risk adverse and looking for locations that offer speed to market for their projects.

This is why it’s imperative for communities that want to compete in the marketplace to have industrial park sites available and under the control of an EDC. Spec buildings also help to drive prospect interest, in areas with resources to develop such assets.

Another strategy under goal one is to continue adding and refining local economic development incentives. To incentivize new private investment and employment in Athens, it was recommended that AEDC and the City of Athens offer a competitive array of financial tools. AEDC offers qualifying new and existing businesses with financial assistance toward leasehold improvements, construction, real estate purchase, training, personal property or equipment and infrastructure needs. Other local public tools used to stimulate new investment include tax abatements, Foreign Trade Zone, Enterprise Zone, Tax Increment Reinvestment Zone and Chapter 380 and 381 agreements.

Two new tools added to Athens’ tool belt include the Freeport tax exemption and Alternative Site Framework for the Athens Foreign Trade Zone (FTZ). The need for these additional tools were identified goals that were achieved as part of this strategic plan.

AEDC leveraged community buy-in, after a year and a half of perseverance, from Athens’ three highest taxing entities to grant the Freeport tax exemption, relieving 95 percent of the tax rate on qualifying inventory.

Freeport goods are any type of inventory that comes into a company’s possession for the purpose of assembly, storage, manufacturing, processing or fabricating, then sent back outside the state of Texas within 175 days or less.

Many other communities that Athens competes with offer Freeport tax exemption, including triple Freeport. Previously, this put Athens at a disadvantage for recruiting new companies to expand or relocate to the Athens area and with business retention and expansion.

Just last year, AEDC was recognized by Business Retention and Expansion International (BREI) for the Freeport tax exemption project receiving the Award of Excellence for outstanding community with a population under 20,000, as well as receiving the prestigious 2018 Impact Award for its significance and accomplishments in the Athens community.

Without the support and participation from the taxing entities, this initiative would not have come to fruition, thereby helping to alleviate a portion of the tax burden for Athens’ existing industries.

AEDC applied for the Alternative Site Framework (ASF) for the FTZ in 2017 to expand the service area from two locations to encompass all sites within the city limits of Athens. The ASF is designed to serve zone projects that want the flexibility to serve companies at other locations where the demand for FTZ services arise in the future.

The FTZ with ASF gives companies the opportunity to defer and possibly reduce duty paid on goods traded across national borders. Goods may be assembled, or warehoused, at a Foreign Trade Zone.

With limited resources, comprised of public funds, it is imperative that EDC’s be responsible financial stewards, and led by those that have a clear understanding of what drives and grows their local economy.

Governing entities working in unison, along with the professionalism of an EDC and its services, are a major part of paving the way for success, growth and prosperity.

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