Austin Cited as one of the Next Boom Towns

From Forbes:

Which cities have the best chance to prosper in the coming decade? The question is a complex one, and as the economy changes, so, too, will the best-positioned cities.

To identify the cities most likely to boom over the next 10 years, we took the 53 largest metropolitan statistical areas in the country (those with populations exceeding 1 million) and ranked them based on eight metrics indicative of past, present and future vitality. We factored in, equally, the percentage of children in the population, the birth rate, net domestic migration, the percentage of the population aged 25-44 with a bachelor’s degree, income growth, the unemployment rate, and population growth.

The results show two divergent kinds of ascendant cities. One is driven by the tech industry, the in-migration of educated people and sharply rising incomes; the other type is what we describe as “opportunity cities,” which tend to have a diverse range of industries, lower costs and larger numbers of families. We may be one country, but the future is being shaped by two very different urban archetypes.

The Lone Star Model

The most vital parts of urban America can be encapsulated largely in one five-letter word: Texas. All four of Texas’ major metro areas made our top 10. Austin, Houston, Dallas-Ft. Worth and San Antonio are very different places, but they all have enjoyed double-digit job growth from 2010 through 2014, well above the national average of 8.1%. They also all have posted income growth well above the national average.

But the biggest divergence from the pack may be demographics. The Texas cities have become major people magnets, with huge growth in their populations of young, educated millennials and households with children. The clear star of the show is No. 1-ranked Austin, which has become the nation’s superlative economy over the past decade.

Austin leads the pack in terms of population growth, up 13.2% between 2010 and 2014, in large part driven by the strongest rate of net domestic in-migration of the 53 largest metropolitan areas over the same span: 16.4 per 1,000 residents. The educated proportion of its population between 25 and 44 is 43.7%, well ahead of the national average of 33.6%, although somewhat below the traditional “brain center” cities of the Northeast and the West Coast.

The other Texas cities also do well across the board, with strong domestic in-migration, low unemployment and a rising population of young families. The biggest question marks going ahead involve No. 6 Houston, which benefited heavily from the energy boom and now is dealing with the consequences of the oil price collapse. Most economists do not see a total meltdown as occurred in the 1980s, but it would not be a surprise to see Houston fall out of our top 10 until energy prices recover. Economist Patrick Jankowski projects some 9,000 layoffs in the energy sector locally in 2016 but enough growth elsewhere — for example 9,000 new jobs in medical services — to keep employment expanding, although far below the pace of the last few years. The other, less energy-dependent Texas metro areas seem likely to continue their stellar performance.

The Flyover Superstars

There are several dynamic, fast-growing metro areas elsewhere in the country that seem likely to increase their status in the coming years, mostly in the Southeast and the Intermountain West. Like the Texas cities, these areas enjoy lower costs than the Northeast or California, notably for housing, and tend to be pro-business. All are experiencing significant population growth.

No. 2 Salt Lake City and No. 4 Denver have been expanding for years, with significant tech-sector growth. Both are logging population increases, with Denver benefiting from strong domestic in-migration while Salt Lake City has the highest birth rate among major metro areas, 16.9 per 1,000 women from 2010-14, largely due to its fecund Mormon population.

The Southeast has a number of ascendant cities led by No. 5 Raleigh, which, like Austin, has emerged as a tech hot-spot. Some 49% of all Raleigh residents aged 25 to 44 have a four-year degree, higher than any other metro area in the South. The national average is 33.6%.

The Glorious Gated Community

Unlike the rest of our rising cities, the Bay Area’s two major metro areas — No. 3 San Jose and No. 9 San Francisco — do not boast rapid population growth, and have low rates of family formation and births. Yet the area’s technology domination has made it so rich that it blows by most regions in terms of positioning for the future.

The big divergence here is income growth. Since 2010, the two metro areas have enjoyed the strongest expansion in earnings in the nation – 9.2% in the San Jose area between 2010 and 2015 and 7.8% in San Francisco. Silicon Valley and the Bay Area also boast extraordinarily well-educated young workforces. In San Jose 53.5% of workers aged 25 to 44 have a college degree, the third-highest share in the nation, and San Francisco ranks fourth at 52.4%.

Full List: America’s Next Boom Towns

So why are people not flocking to these areas? San Jose is net negative for domestic migration over the time we examined while San Francisco made modest gains only after years of net out-migration. Much of the problem lies in high housing prices, which, notes Dartmouth College economist William Fischel, have turned the Bay Area and the Valley into an “exclusionary region” inaccessible to all but the wealthy and highly gifted.

Given the growing importance of the technology industry, it seems likely that this gated region will continue to thrive in the years ahead, albeit with a low level of new family formation, relatively few children and a limited middle class. It’s a model that some cites may wish to duplicate but few will be able to. Perhaps the most promising candidate to join this list is No. 15 Seattle, which also has experienced strong job growth, largely from technology and boasts a large population of college graduates.

The Fading Big Enchiladas

Perhaps the most glaring omissions at the top of our list are America’s three largest metropolitan areas: New York, Los Angeles and Chicago. Of the three, New York does best, but only well enough for 36th place, hardly what one would expect for America’s, and arguably the world’s, premier city.

New York has high costs like San Francisco but a far more bifurcated economy and demographics. Wall Street may be approaching the end of an epic run, but overall incomes in New York have fallen 0.5% since 2010. Employment has expanded a respectable 7.3% over the past five years, roughly the national average, but the metro area has the highest rate of domestic out-migration in the country.

Similar dynamics have lowered future prospects for Los Angeles and Chicago. Ranked 39th, Los Angeles has posted better job growth than New York at 10.2%, but its income losses were also more severe, down 3.8%. As in Gotham, the elites of Southern California in entertainment, real estate and technology may be thriving, but the vast majority are not doing so well, as manufacturing, construction and business services have lagged. Los Angeles’ population — more heavily Latino and African America — is also less well-educated, with only 34.8% of adults 25 to 44 holding bachelor’s degrees, a good 20 points less than their San Francisco-area competitors.

Chicago, ranked 40th, appears to have worse prospects. For all its problems, Los Angeles still dominates entertainment, has the largest port in the country, close Pacific Rim connection and enjoys the finest weather on the continent. Chicago has none of those advantages, although it boasts a very attractive downtown. The region around the magnificent mile is not doing well, with low job and population growth, stagnant incomes and strong out-migration. Urban analyst Pete Saunders describes Chicago’s economy as “one-third San Francisco and two-thirds Detroit.” That seems more true than many Windy City boosters would like to admit.

Future Of The Future

 Of course the future is not completely predicable and many things could change in the coming years. In the short run, as mentioned above, the energy boom towns will take a bit of a hit. Energy slowdowns could impact other cities with a concentration in this industry, notably Denver, Salt Lake and even Columbus, near Ohio’s big natural gas and oil reserves.

But other factors suggest that these lower-cost cities will do well into the future. Columbus, Ohio, for example, may see its  job growth impacted, but the benefits of strong in-migration will linger, particularly the growing numbers of college-educated millennials who have headed to it and other more affordable Rust Belt metro areas in recent years.

Ultimately we may see the emergence of two distinct urban futures. One will emerge in elite “gated” regions such as San Francisco, San Jose, and, perhaps in the near term, Seattle. These areas will dominate many key tech sectors, and will continue to leverage their well-educated populations. The other will be more along the Texas model, diversified economies driven by lower costs, particularly for housing, diversified economies and increasingly well-educated populations.

Rather than being fundamentally incompatible, this enormous country should have room for both models. America needs its elite centers, but there also have to be cities for middle-class families. Each can claim a piece of the future.

Full list and additional information>>>

How a savvy businesswoman helped bring Antone’s back downtown

miller antone'sFrom today’s Austin Business Journal:

Thanks to the business and real estate matchmaking skills of Meredith Sanger at the Downtown Austin Alliance, the Antone’s blues club is settling into its new home.

Antone’s co-owner Will Bridges said the Alliance “is really under-credited” for finding appropriate real estate for local businesses in the tight and pricey downtown market.

Bridges and his partners, including musician Gary Clark Jr. and Susan Antone, had been looking long and hard for the right place to re-establish Antone’s, which had its genesis in 1975 when Clifford Antone opened the blues club at Sixth and Brazos streets in a former furniture warehouse. Over the years, the club moved several times.

The club’s cachet survived — greats such as B.B. King and Muddy Waters performed there — even when Clifford Antone served two prison terms stemming from drug trafficking and money laundering charges. He died in 2006 at age 56.

In subsequent years, the club operated at Fifth and Lavaca streets but moved to East Riverside Drive in 2013.

“We knew we had to represent Antone’s in the right way,” Bridges said. “We talked to a lot of people and made a lot of runs at a lot of places. We were looking for a needle in a haystack.”

Enter Sanger, who enjoys a challenge. She lured nationally lauded Houndstooth Coffee to a spot in the Frost Bank Tower and persuaded Portland, Oregon-based Voodoo Doughnuts to open its first Texas store on East Sixth Street.

“Will gave me an idea of where they wanted to be and I could tell that the Maxey’s building didn’t look like what he wanted — at least at first,” Sanger said. “But once he got in there he realized it was a hidden gem in downtown.”

Bridges expected it to be “all offices, but then we saw the beams and columns, I just knew that was the spot. Something with soul, great bones. It just spoke to us.” Additional information>>>

Here’s how much UT will pay for its Houston land

miller The-University-of-Texas-Health-Science-Center-at-1DE07852From today’s Houston Business Journal:

The price tag has been revealed for the University of Texas System’s previously announced 300 acres in southwest Houston.

UT will pay $450 million over the next 30 years for the property, situated 3.5 miles away from the Texas Medical Center, the Houston Chronicle reports. The purchase price was just over $200 million, and the $450 million figure includes debt service.

The final price dramatically exceeds some experts’ predictions that the land would cost UT somewhere between $39 million to $65 million for the full 300 acres.

Chancellor William McRaven plans to make the campus an intellectual hub, one of the eight “quantum leaps” he announced in November. However, his plan has faced a great deal of backlash from University of Houston alumni and supporters who see the move as illegal or unfair competition.

Welcome Wilson Sr., former chairman of the UH board of regents and chairman of the UH Political Action Committee, recently issued this statement in an op-ed piece submitted to the Houston Businesses Journal:

“Competition is good in business. Competition is bad among Texas state agencies. A university is an agency of Texas. It creates unnecessary duplication and it wastes taxpayers’ money. The Texas Legislature created the Texas Higher Education Coordinating Board for the specific purpose of preventing such action. Will Texas universities continue to be coordinated, or will it be dog eat dog?”

UH Chairman and Houston billionaire Tilman Fertitta reportedly went as far as calling the plan the “most asinine thing I’ve ever seen,” and some UH law professors argued that UT’s plan violates state law. A UT spokesperson disputed that claim.

Despite the concerns, the system closed on its first 100-acre plot of land at the site earlier this week. McRaven has tasked a group to begin the planning phases for the new campus and will present his plan to the state’s higher education coordinating board on Jan. 21.

McRaven previously said that the task force will look to avoid duplicating programs and initiatives that other Houston schools and institutions are providing. Additional information>>>

Higher rents in store: Retail real estate development drops as Austin population soars

Miller austinskylineatnight 750xx2113-1192-0-114From today’s Austin Business Journal:

Austin keeps growing but the retail market doesn’t appear to be keeping pace. Less than 1 million square feet of new retail space was delivered in the Austin area in 2015 — a decline of 300,000 square feet from 2014.

The Weitzman Group released its annual retail overview report Tuesday and the market dynamics lead to one conclusion: retail space is going to keep getting more expensive.

Occupancy keeps inching upward and is now at 96 percent citywide, one of the tightest years on record.

“The 2015 construction remains notably low, especially for a market with such high occupancy,” the report states. The new deliveries are largely due to redevelopment, rather than ground-up retail projects.

The Oaks at Lakeway, a 175,000-square-foot neighborhood center on the west side anchored by an HEB Grocery Co. store, was an exception. The upscale market off RR 620 in Lakeway opened last fall with many smaller tenants currently moving as the project wraps up this year.

On the south side, Lamar Union on South Lamar Union also opened last year and continues to deliver final phases. North of the river, Lamar Central at 3800 N. Lamar Blvd. is an office and retail project, which is currently moving in new tenants — including Kendra Scott jewelry and Snooze, a breakfast eatery.

Next on tap in North Austin is Rock Rose at The Domain — about 100,000 square feet of new retail with strong local flavor. I wrote about The Dogwood opening there soon, along with many other familiar brands. A 123,000-square-foot Nordstrom department store is also under construction nearby.

Here’s a look at other highlights of the report:

Saks Fifth Avenue Off 5th will open this spring in 50,000 square feet at Gateway Shopping Center, 9607 Research Blvd.
Crystal Falls Town Center, a 94,000-square-foot Randalls grocery-anchored shopping center, is under construction in Leander. It’s scheduled to open in fall 2016.
Belterra Village, a retail project on 90 acres near U.S. 290 and Nutty Brown Road on the way to Dripping Springs, is slated to begin delivering retail this year. It could encompass nearly 300,000 square feet of commercial space.
Phase III of Round Rock Crossing at I-35 and State Highway 45 in Round Rock is scheduled to start this year, adding 90,000 square feet.
The highest lease rates currently are for tenants in new construction developments, commanding rents of between $35 and $40 per square foot.

6 finalists unveiled for architecture, construction marketing awards

SMPS-Twitter_400x400An organization supporting the business development of the architecture, engineering and construction industry — collectively known as AEC — has recognized some of its top marketing talent.

The Austin Chapter of the Society for Marketing Professional Services has announced six finalists for two new awards. Winners will be announced Jan. 21 at the organization’s Black + White Bash at The Highball on South Lamar Blvd. Click on the slideshow with this story to see the nominees.

The Community Service Award recognizes volunteerism and the Leadership Award recognizes impact on an individual business as well as the architecture, engineering and construction industry as a whole. Luci Miller, President of MILLER Imaging & Digital Solutions is a finalist for the Community Service Award. View a slideshow of all nominees here>>

“We’re a little bit behind the scenes,” Beth Sims, marketing lead at dwg. Urban Landscape Architects and an SMPS board member, said of marketing professionals in the AEC industry. “We see this as an opportunity to recognize each other and the great work being done.”

SMPS is a development and networking organization for AEC marketing professionals with more than 115 members in the Austin chapter, which was founded in 1980.

Austin architects gain international acclaim with Gardner project

Miller gardner From today’s Austin Business Journal:

It’s been a particularly blissful holiday season for Austin-based Baldridge Architects, now that the firm’s work on Gardner, a new restaurant in an East Austin adaptive re-use development, was cited as one of the best interiors in the world by Architectural Record magazine.

The Gardner project was lauded right alongside much larger projects in New York, San Francisco, Washington, Milan, Italy and Essen, Germany.

“I did not expect this,” said R. Burton Baldridge, the Austin firm’s principal, who said it’s a little too soon to tell whether the international publicity will boost his firm’s prominence.

Gardner is Baldridge Architects’ first restaurant, though the firm has completed hospitality projects before — Kimber Modern hotel, for example. Earning the design assignment from restaurateurs Ben Edgerton and Andrew Wiseheart of Contigo fame was like a shot out of the dark, Baldridge said.

“We were not on their radar at all,” he recalled.

Keith Kreeger, a noted Austin-based ceramicist who knew all the parties involved, saw a fit and made the introductions.

Baldridge still isn’t sure why his firm procured the commission at the 11th hour, but an attitude of restraint and authenticity probably won the day.

“I told them we needed to find a way to be honest to the post office,” Baldridge said, being compelled to keep the basics such as the bricks and glass intact.

The design process was orderly and slow and the results are stellar in an understated way.

Baldridge came to the architectural profession in an offbeat sort of way. He attended the University of Texas and went to law school.

“It was a colossal mistake,” Baldridge said.

He decided to save enough money so he could return to college and become an architect. In due time, Baldridge was living in New York, so he landed at Columbia University.

Additional information>>>

Miller IDS’ Featured Artist January 2016

Miller don collins noah cox house 600This month, we are especially proud to highlight the work of Don Collins, whose beautiful artwork has graced our annual calendar for each of the past 38 years! This decades-long process of calendar design began over coffee when Robert Lambie Miller expressed dissatisfaction with the commercial calendars then available, and suggested that Don do something on a more local level. The result was well received, hence the 38-year tradition. You may recognize the featured work “Noah Cox House, Roma, Texas” from the cover of our 2016 calendar.

Don has traveled the back roads and long-deserted main streets of Texas for years, searching for unique images reflecting a Texas that existed in the past. His inspired drawings and paintings breathe life back into the old homes, courthouses, shanties and industrial sites he finds.

Raised in rural Parker County, Don attended NTAC and Texas Tech before army service during the Korean conflict, completing his final year at UT Austin. Settling in Austin, Don was an active commercial/easel artist for 52 years, serving a broad array of clients, including architects, builders, NASA contractors, publishers, state agencies, and many others.  As a painter, he participated in scores of venues throughout the Southwest, initially depicting wildlife, and later broadening into character studies, landscapes, and historic/vernacular architecture.  Still active at a somewhat more relaxed pace, he welcomes commission work, and is at the board daily, doing art for the sheer pleasure of it.  Don has also co-authored the popular book, Traces of Forgotten Places: An Artist’s Thirty-Year Exploration and Celebration of Texas as It Was. Don has produced more than 300 works for our calendars, allowing us to share his passion for our state with our customers.  Additional work and contact information are available on his website.