Editor's note: This is one in an occasional series looking at local employment.
Political leaders in the Killeen area are almost unanimous in their desire to bring high growth, high wage jobs to this region.
During the recent campaigns for mayor in Copperas Cove and city council seats in Killeen, candidates often expressed their desire to see more growth in jobs not related to education, health care, food service and hospitality.
But the continuing emphasis on bringing more high-paying companies to this area could lead some to question whether the organizations in charge of attracting those jobs are somehow failing in their mission.
Dr. M. Ray Perryman, who is the president and CEO of economic analysis firm The Perryman Group in Waco, doesn’t think so.
Perryman wants those who demand more high wage jobs for this area to remember that communities across the United States are competing for the same pool of companies looking to expand.
“Virtually every area in the country wants to attract high growth sectors, and the process is very competitive,” Perryman said. “The Killeen Economic Development Corporation and other local entities are seeking out and working with companies that might be good fits for the area, and such efforts are well worth supporting.”
Statistics from the U.S. Bureau of Labor Statistics show steady job growth in this area from 2007 to 2017.
During that period, employment in the Killeen-Temple-Fort Hood metropolitan statistical area grew 18.9%. That represents an additional 18,000 jobs in the area over the 10-year period.
Wages also grew over that period. The average wage in the Killeen-Temple-Fort Hood area was $45,037 in 2017. After adjusting for inflation, that represents a growth over 10 years of 15.7%.
Perryman thinks those statistics illustrate his belief that this area is in good shape economically.
“Fort Hood provides a large base of economic activity, which is a major advantage for stability over time, assuming an ongoing and consistent mission,” Perryman said. “Education and health care are also cornerstone industries, adding job opportunities. Having a large segment of the economy dependent on industries that are far less subject to business cycles than most is beneficial.
“In fact, it you look at most economies around the country, these industries are among the most important.”
Perryman also feels Killeen has some advantages as a location for future industry that other places just don’t have.
“The proximity to Austin can be an advantage for tech firms looking for a less urbanized environment with less expensive real estate. Retaining skilled technical personnel as they exit the Army, and focused training in such fields at the college could strengthen this opportunity.”
John Crutchfield III serves as executive director of the Killeen Economic Development Corporation and the Killeen Industrial Foundation. He agrees with Perryman that luring high growth industry is a goal, and that Killeen is competing with many other communities to make it happen. And EDCs operate differently from community to community.
Crutchfield notes that, while the economic development corporations in Copperas Cove and Belton have a sales tax for economic development, Killeen and Temple do not. He says that’s something of a double-edged sword.
“(There are) 728 (Texas cities that) have the sales tax for economic development,” Crutchfield said. “The average amount of sales tax for economic development collected is $1,048,901. The 486 towns and cities without the sales tax must find the resources elsewhere.
“Economic development is expensive. Resources are limited and unevenly available.”
But he notes that the rules that the sales-tax funded EDC’s must work under are more strict, and can handcuff those organizations when trying to bring companies to a community.
“Most (tax-funded boards) are limited to five members,” he said. “The purposes for which their funds can be used are limited and is changed periodically by the legislature. For example, last time I checked, sales tax funding could not be used for retail development or educational projects. This is a severe limitation in a knowledge based economy.
“Some cities with the sales tax for economic development have had difficulty recruiting talented business people because of the limited number of members allowed and the level of control sometimes retained by elected officials, some of whom may not have business backgrounds.”
By contrast, the Killeen EDC is funded differently and has a different set-up on its board.
“KEDC has nine members, six of whom are normally from the private sector. This is an asset. KEDC can also provide incentives for retail and educational projects, which often have big impacts in the knowledge-based economy.”
COPPERAS COVE EDC
Jonas Titas has been the executive director of the Copperas Cove Economic Development Corporation for only a few weeks. He started officially last month, and says he’s starting from scratch to put together an economic development program for the city.
“There’s a lot of great attributes (in) Copperas Cove,” Titas said last week. “The access to growing markets ... the infrastructure here with I-14 and the BNSF Railroad, the fact that we have a shovel-ready, beautiful industrial park, and a lot of the labor and skills that we are able to draw upon from Fort Hood.”
Titas has worked in a variety of economic development offices across Texas in 15 years, including cities like Houston, Conroe, Kerrville and Tyler. He says there is one common thread he’s found in successful economic development operations.
“Telling your story and making a company or project comfortable that they will be able to find the skills and employees they require.” Titas said Copperas Cove and the area in general have the unique attributes to be attractive to a wide variety of companies. But he adds there is a “9,000 pound gorilla” about 45 miles south, the greater Austin metropolitan area, that tends to draw attention away from this region.
“If companies are looking to this area, oftentimes they’ll look to the Austin region. So, we’re battling that. So the main goal of this office going forward will be demonstrating who we are and the skills we have here.”
Titas plans to do that by evaluating the education and skills of the people who live in Copperas Cove so he can show potential employers the potential for growth, rather than statistics that show what businesses are located there now. He also plans to get the city council and the EDC board together to discuss his vision for the city and get everyone on the same page.
He agrees with Crutchfield and Perryman that there is a definite competition for high growth industry. But he thinks having a company locate anywhere in the Killeen region is a win for economic development in the area as a whole.
“We all benefit from projects that land in either one of our communities,” Titas said. “We want to be a team player, and we want to work with our neighbors.”
CHEMICAL PLANT CONTROVERSY
The recent opening of a chemical plant in Killeen may illustrate some of the pitfalls that bringing a new company to the area represents.
The opening of MGC Pure Chemicals America, Inc. (MPCA) was a quiet affair. A ribbon cutting ceremony at the plant at 4500 Roy J. Smith Drive was held on March 15, but the public and the media were not invited.
On the surface, the chemical plant opening looked like an economic development win. A press release from the Killeen Economic Development Corporation estimated that the plant would provide 28 jobs with an average annual salary of $66,600. The KEDC also touted the plant as the “second-highest property tax generator in Killeen.”
But the city guaranteed reimbursement of up to $486,000 in property tax to MPCA to lure the company to locate in the area. The city also offered $224,000 in job creation grants and reimbursement for up to $500,000 in infrastructure improvements, among other incentives. And when Killeen City Councilman Steve Harris asked KEDC board President Charlie Watts during a meeting last month how many of the 28 jobs at the plant were being filled by Killeen residents, Watts could not say at the time.
Residents of Killeen voiced mixed opinions about the plant. On one hand, there were those like Kenyon Triplett, a resident of the Northcliffe neighborhood who worried about what the plant might mean for air quality in the area, as well as its location near Killeen High School. Triplett wasn’t happy about the perceived secrecy surrounding the plant’s construction and opening.
“Just seeing it from the street … you see the all the fences and the barbwire and you’re thinking something secretive is going on. To be honest, I thought it was going to be another call center or warehouse. I had no clue at all, I got nothing in the mail, no hearsay talk. None of that,” Triplett said in a March 23 Daily Herald story.
But Killeen resident Alana Rae Roberts said in the same story she was in favor of the plant because it could bring more industry to the city.
“I don’t understand why everyone is not liking the plant idea of opening here. Its bringing in more jobs and we need more of it,” she said.
From the EDC point of view, Crutchfield thinks MPCA has the potential to lead more companies to take a serious look at Killeen.
“MPCA provides components to the semiconductor industry, (including) Samsung. MPCA has had a good experience here, Samsung and others in the manufacturing stream will hear that and some will seek us out.”
Killeen Mayor Jose Segarra serves as a board member for both the Killeen EDC and Workforce Solutions of Central Texas. When he looks at the economic development picture in the Killeen area, he points out that bringing jobs to Killeen won’t do any good if people aren’t trained to fill open positions.
Segarra said the workforce board made a presentation last month that provided him with a revealing statistic.
“On the average right now there’s about 5,000 people looking for jobs that have registered,” Segarra said, referring to Workforce Solutions of Central Texas. “The interesting thing is that there’s 13,000 jobs available.
“The problem is not that we don’t have any jobs, the problem is our skills.”
Segarra said some of the highest paying open jobs in the Killeen area are in the medical field. But those jobs are going unfilled because local workers don’t have the training or education to be hired.
The mayor said that same principle translates to bringing new industry to Killeen. He uses the new chemical plant as an example.
“They’re hiring 25 people, paying $66,000. Does that mean anybody can go apply for that? No. You have to have the skills in whatever they do, (such as) biochemistry.
“So a lot of times, even though we want to bring those jobs to our community ... the community has to have the workforce that has those skills.”
Segarra said the residents of this area have the character and sense of responsibility that employers want. And he pointed to the Hire Heroes program as one that could be used a model to help the civilian workforce. Segarra said the program works to connect soon-to-be veterans with employers, who can help guide any needed training without paying to provide it. That way, the veteran is job-ready and hirable as soon as they finish serving.
“(We need) more programs that are similar to that, not just in the military sector but (on) the civilian side.”
When it comes to bringing new business to Killeen, Segarra said, he favors casting a wide net to bring in as many leads as possible.
“A lot of times you just don’t know exactly (what businesses) will come here,” Segarra said. “When we first starting talking about the chemical plant ... I thought and still think it’s a great fit for our community.
“But there’s a lot of people who weren’t happy with that. They were like ‘why are bringing this (to the area)?’ So people are calling for industry but then you have to go through the challenges when they say that’s not exactly the type of thing we’re trying to bring (here).”
Segarra, like Crutchfield, thinks bringing in the chemical plant could generate more interest in Killeen and, ultimately, will result in more high growth, high wage jobs.
“Sometimes (economic development) is challenging,” Segarra said. “If you’re sitting around looking for something that everybody agrees to, I think you’ll never get anything.”
Crutchfield sees some definite signs that future economic development may be tipping away from the Austin area, giving this area a better crack at luring more industry.
“Austin is getting extremely expensive and overly regulated,” Crutchfield said. “Barriers are being created that will hinder investment there. For example, AT&T has expressed a great deal of frustration and scheduled delays in building a 5G network in Austin due to the permitting process.”
Crutchfield is hopeful that education, reputation and being ready to jump on opportunities will create the jobs to maintain and complement this area’s economy.
“Local innovation and technology will drive manufacturing and job creation in the future,” Crutchfield said. “Education and collaboration will position us to create jobs, tax base and wealth in companies making products that do not yet exist.”
Herald staff writer Monique Brand contributed to this report