Tuning Into Austin

Can Madison—should Madison—be more like the central Texas city of music, tech and opportunity it’s so often compared to?

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Gary FarmerFar, far away in a land called Austin, government spending is not something that left-wing legislators do unto fiscally conservative opponents. Here, smart spending is tied to taxpayer rebates and corporate return on investment. That’s actually how people talk inside Austin’s city hall, and they’re Democrats!

Case in point: When Facebook was looking to expand its geographic footprint to a place with a deep talent pool, the city of Austin and its chamber rolled up their sleeves and got to work. They already had talent, thanks to UT–Austin. To that, the city council green-lighted a $200,000 incentive agreement, which was in addition to $1.4 million from the Texas Enterprise Fund in exchange for a pledge of two hundred full-time jobs paying at least $54,000 by the end of 2013.

Apparently all parties underestimated Facebook’s economic impact. “They since expanded to another floor in that building and I believe are aiming for three hundred employees,” Austin American-Statesman reporter Kirk Ladendorf tells me. Practical, profitable public-private partnerships in business attraction, retention and expansion? Austin really is weird!

And what’s weirder? Farmer, who helped nail down the red carpet for the Facebooks of the world to waltz in on, by raising millions of dollars from the private sector and flying to places like Silicon Valley—on his own dime—to tell Austin’s story, is a Republican. A Republican who voted for a five-percent tax hike last November to build the new Dell Medical School at UT–Austin—Michael and Susan Dell earned naming rights with their $50 million gift.

“It was the right thing to do,” says Farmer, of his vote. “The right thing to do for the community, my family. I mean, who’s against better health care?”

And if that’s not weird enough, consider that one thing we all know about hard-nosed business types like Farmer is that they hate all that bureaucratic red tape. Hate it. And yet.

“Austin is a process-driven city,” explains Farmer. “There’s a process for everything down here. We get stuck in that, though, sometimes. But sometimes it produces a better product or a better result. I guess you could be against process, but I think in Austin and probably in Madison, you’d be banging your head against a tree because process is important. So you recognize that, you embrace it, you get involved with it and work through it.”

I stand corrected. Sometimes folks like Farmer don’t love process, but they understand its role. And that can make all the difference. And in Austin, even the way they do process is weird.

Enter Kevin Johns, director of the city of Austin’s Economic Growth and Redevelopment Services Office. A whirling dervish of energy and ideas and one sharp dresser, Johns told me about a new UT–Austin supercomputer partnership to develop a business analytic software technology. If approved by the city council in August, Austin will be the first city in the world utilizing the tool to improve city economic growth by creating ROI scenarios for major government investments.

Kevin Johns“It gives the city decision-makers and the community stakeholders a common ground for aspirations to be legitimized, evaluated and put into the mix,” says Johns. To me, this sounds a lot like the predictability and cost that Farmer told me was vital to Austin’s economic bounce.

His office is also working with the chamber and Opportunity Austin 3.0 to help tackle the problem of hard-to-employ populations, whose numbers are up over ten thousand. The city estimates five-thousand service-sector jobs in five years, created through commercial revitalization around the inland port system that includes significant small business expansion coupled with distribution company recruitment. The latter task, of course, fits right into Opportunity Austin’s wheelhouse.

“The city has put together the Family Business Loan Program, but with no city money,” says Johns. “We’ve gotten credit unions, local banks and two sources of federal dollars to create a $40 million loan pool.”

The planned-for result is impressive. “The return on investment in a barebones way is just about under half-a-billion dollars a year,” Johns explains, “half of that being social service delivery that we hope is not needed, and then half of it is the wages they get that they pump back into the community.”

What we have here in Kevin Johns, ladies and gentlemen, is a public-sector entrepreneur. How’s that for weird?

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