Monday, October 27, 2014

Musical Chairs in Richardson Real Estate

"State Farm's move to Richardson will leave behind big blocks of empty office space." That was the headline to a story in The Dallas Morning News revealing the ugly secret behind the big win for Richardson.

After the jump, how the game is played.

It turns out that many of the 8,000 employees moving into those new State Farm office towers will be moving from just down the road, where State Farm is currently leasing space in five office buildings in Richardson's Galatyn Park. That will leave a huge hole behind that will need to be filled, perhaps with the city trying to lure other big tenants to move. Then, the offices those new tenants vacate (maybe elsewhere in Richardson, maybe in other cities, maybe in other states) would have to be back filled by hitting up taxpayers elsewhere to lure still more moves. In the end, this game of musical chairs results in a lot of financial incentives doled out to a lot of big businesses, with not a lot of net new jobs created. This is how big business plays local governments. At the state level, it's the Texas Enterprise Fund that gives away hundreds of millions of dollars to big business without much accountability for creating jobs.

What should Richardson spend more time on instead of the current strategy of concentrating mostly on big deals? Maybe something like what's been turning targeted neighborhoods in southern Dallas around: "Small Projects by local developers the key to southern Dallas success." Nurturing small redevelopment is not as glamorous as closing on the big deal. It's not even always popular. Paradoxically, redevelopment is sometimes resisted because, well, because it might bring customers to an under-utilized location (e.g., the proposed outdoor market at the Richardson Heights shopping center). But this is how aging neighborhoods are redeveloped, how jobs are created, and how cities like Richardson are made prosperous for future generations. More, please.

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