The ‘Toyota Effect’

That was the story line of an article by Steve Brown, real estate editor for the Dallas Morning News.

The report began by saying, “One of the last empty corners in Legacy Business Park on the Dallas North Tollway is attracting development plans.”

Stream Realty Partners is beginning a new 12-story office tower which is next to a 5-story building of theirs under construction.

Stream’s Regional Partner said, “There is so much interest in this area.”

Investors and developers attribute the boom to what they call “the Toyota effect.”

In 2014, Toyota Motor Corp announced it would move its North American Headquarters from California to Plano, Texas.  Developers are scrambling to get projects going in the area.

Toyota will move 4,000 employees to its 2.1 million-square foot headquarters.

Up the road in Frisco, Liberty Mutual Insurance just announced it would be moving 7,000 employees to Texas.

To meet the need for office space, nearly 5 million square feet of building is under construction or announced along the tollway.

Also in Frisco, the Dallas Cowboys are building more than 300,000 square feet of office space for their new headquarters.

With all the good news, Jeff Ellerman, a vice chairman for CB Richard Ellis’ Dallas office said, “I’m really not concerned that we are getting too far over our skis with construction.”

Two years ago, the Wall Street Journal reported that Utah had gained 38,000 jobs from California in just one month.

In the journal article, credit was given to efforts within the governor’s office.  Individuals were singled out.

I remember the article because I called the individual named in the article to inquire how the marketing and economic development success was pulled off.

Was it done by mail solicitation or telemarketing?

No. According to the governor’s office, it was old-fashioned sales call.  “We had boots on the ground,” I was told.

Do you ever wonder why Oklahoma or Tulsa doesn’t experience the success enjoyed by Plano, Frisco or Utah?

Maybe it’s because we never do anything different.  Our agencies tasked with economic development are run by people with little experience.  Take our Oklahoma Department of Commerce.  Its secretary is Deby Snodgrass, a protégé of Tom Cole in the polling and political consulting business. What experience does she bring to the table?  Little if anything.  Ms. Snodgrass also runs tourism and attempted to take over the Oklahoma Historical Society last year.

At this writing, a state employee reported confidentially that the Department of Commerce would be targeting Dallas companies using large amounts of electricity.  The conclusion is Dallas is running out of electricity and these companies might move to Oklahoma to obtain better terms.

Tell that to Toyota and Liberty Mutual Insurance. The last time I checked, electricity was being made by natural gas and not coal or some other fuel.  Apparently our commerce folks think Texas is low on natural gas.

You just can’t make this up.

Until we get off our hands and make calls in California or Illinois, nothing will change.

Those companies that might move to Oklahoma will still ask about our personal income tax and failing public schools.

What will the answer be?