Room To Grow: Tyler’s Business Park Spurs Growth By BRIAN PEARSON, Business Editor   |   Apr 12, 2009

When Steamatic of East Texas Inc. outgrew its offices on East Front Street, the company found a new home at the Tyler Industrial/Business Park.

"We needed more room, and it was a good location for us," said Lis Chambers, office manager for the business, which specializes in cleaning and restoration, particularly for fire and water-damaged property. "We get a lot of walk-in traffic."

Steamatic is one of 15 businesses that have found a home in the park, located on the western side of Loop 323, since the Tyler Economic Development Council took it over from the Tyler Industrial Foundation in 1994.

While businesses such as FedEx, Office Furniture USA, Aramark and Sherwin Williams represent the fruits of past recruitment effort, economic experts say the future for business parks such as this lies in energy and high-tech industries.

Waco-based economist Ray Perryman said industrial parks remain a vital source of economic development for Texas cities.

"Industrial parks are not a thing of the past," Perryman said. "Companies still need locations with access and infrastructure." Nevertheless, they must evolve to reflect business-world changes, he said.

"They are often shifting in focus to reflect emerging industries, such as biotech, but they are still very important," Perryman said. "Companies are unlikely to locate in an area that can't offer such amenities when many others can."

Emerging sectors with the greatest potential include biotechnology, nanotechnology, alternative energy and "intelligent materials," he said. Intelligent materials are products that can change with their environment, such as glass that darkens when the sun comes out.

"Every community has a different set of resources, such as work force, cost parameters, existing companies and infrastructure, which defines its best prospects," he said. He added that industrial parks can be funded in a variety of ways.

"There is no magic funding mechanism," he said. "Typically, some type of quasi-public foundation or corporation buys the land and uses bonds to fund the improvements, but there are many variations on the theme."

But bringing success to an industrial park takes more than just solid funding, he said.
"Successful programs tend to also have good marketing and outreach, and competitive incentives," Perryman said. "With the recent emphasis on clusters, they also tend to focus on sectors that are related to their existing mix and available training programs.

"Good efforts also tend to be holistic and involve local universities and workforce organizations."

Mark Dotzour, Texas A&M Research Center chief economist and research director, said industrial-park diversity is critical at a time when governmental regulations are strangling the life out of the manufacturing sector.

"Industrial manufacturing jobs in this country are vanishing," Dotzour said. "The cost of doing business has increased with lawsuits and environmental regulations."

To make their industrial parks competitive, communities must add and maintain infrastructure such as utilities, rail and roads, he said. Tax incentives also remain vital, he said.

"Any combination of things that lower the cost of doing business is going to encourage people to locate in your community." Dotzour said.

Last month, the Longview Economic Development Corp. announced $10.6 million project to add water, sewer, electrical and roads for the city's new 700-acre North Business Park.

The LEDC wanted to complete park infrastructure while construction costs are low, Bob Metzler, economic development group president, said at the time. Construction is slated to begin this month.

Funding for the business-park project will come from revenues from a quarter-cent sales tax that Longview voters approved in 1992 for economic development.

Tyler's industrial park is financed through private funds. The city of Tyler collects a half-cent sales tax, which generates about $12 million annually, said Tom Mullins, TEDC president and CEO.
The city uses the money for capital improvements, such as new fire stations, and not for economic development.

Mullins said the TEDC inherited a number of problems, such as infrastructure and street access issues, when it took over the industrial park in 1994.

Since then, the TEDC has invested $2 million to upgrade the park, for which businesses have bought up about half the available space, Mullins said. Mullins agreed that high-tech companies represent the future of industrial-park development. "What we want to do is focus on technology," he said.

Later this year, the city will begin work on a Sunnybrook Drive extension that will take it west through undeveloped park land and beyond Loop 323. "That will provide a four-lane arterial," Mullins said. "It'll open up all of that property."

That area is particularly suited for high-tech businesses due to its proximity to the high-end residential development of The Cascades, Mullins said. In addition, a Phoenix-based company has plans for retail and office development on 550 acres near The Cascades.

Once construction of the Sunnybrook extension ends in about two years, the TEDC will go to work to market the undeveloped industrial-park property, he said.

With the Tyler Junior College West Campus sitting on part of the park, all of the ingredients will be in place for "technology clusters," or groups of high-tech businesses, to form.

In addition, an online banking operation that the TEDC earlier this year said was looking to start up in Tyler, creating up to 1,000 jobs, could locate there as well.

Bill Barfield located his business, Sentry General Contractors, in the park in 1986, eight years before the TEDC took control.

Barfield said the location is ideal for his business, which handles work throughout East Texas.
"There's great highway access," he said. "The loop is only a block away."