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Houston Earns Top Business Location Ranking

The Fast Track To No. 1


A rapidly
expanding economy propels Houston 
to the top spot among the nation’s largest cities.

The fastest-growing economy in North America
is producing more corporate real estate projects than any other city in the U.S.

Greater Houston,
which in 2011 secured 195 corporate facility expansion projects, is increasing
the size of its metropolitan economy at a rate that leads every other metro
area on the continent, according to a new study from the Brookings Institution.

As a result, it’s no surprise that Houston won Site Selection Magazine’s ranking as the No. 1
Large Metro in the U.S.
for 2011. America’s
fourth-largest city easily beat out second-place Chicago, which garnered 167 facility deals
last year.

Houston’s top
ranking confirms what many company executives already knew: The largest city in
Texas is a
great location for business.

“In terms of the overall business climate,
this is definitely a strong market,” says Deborah Miner, chief financial
officer for FlexSteel Pipeline Technologies Inc., which is nearing completion
on a US$94.8-million manufacturing plant in the Houston
suburb of Baytown.
The 250,000-sq.-ft. (23,225-sq.-m.) facility on a 30-acre (12-hectare) site
will create 130 jobs.

“Everyone at the Greater Houston Partnership
and the state of Texas
was very helpful,” Miner says. “We received tax abatements on the property and
the equipment, as well as assistance in job training.”

Although the company is based in Houston, Miner says FlexSteel scoured the Gulf Coast and
the Midwest for the best location for the new
factory. “Our existing manufacturing facility is in Panama City, Fla.,”
she says. “We looked at locations in Louisiana,
Texas and areas in the Midwest
— areas that have good rail access and good barge transportation access.”

FlexSteel identified other potential sites
within a 100-mile (161-km.) radius of Houston,
notes Miner, but eventually selected Baytown
for a number of reasons.

“Our most important site criteria were
logistics considerations,” she says. “We weighed the distance from the raw
material suppliers versus the distance to the customers. We needed rail access
and port access, so being close to the Port
of Houston and other Gulf Coast
ports was a key factor.”

Being able to find and hire qualified labor,
and qualifying for state and local incentives, were pivotal factors as well,
the CFO adds. “Energy consumption is also a major consideration,” she notes,
referring to the cost of electricity and other energy costs associated with
operating the new plant.

Access to Latin American markets was a big
factor, notes Miner. “We are exporting our product to Latin
America, and that fact tended to tilt our search more toward a
Southern location,” she adds. “We did look at some locations along the
Mississippi River in the Midwest, but a Gulf Coast
location with great port access became the driver.”

Most of FlexSteel’s suppliers tend to cluster
along the Gulf Coast because they also supply the many
refineries in the region, says Miner. “We want people to know that this is
expansion number one,” she says. “We will expand by adding other facilities
once this plant is up and running. We will conduct more site selection
processes as we move forward and build additional facilities.”

Global Firm Chooses Pearland

George Frioux, vice president of business
development for Merit Medical, says that logistics and a pro-business climate
helped sway his own company toward selecting a Greater Houston location for a
new medical device manufacturing plant.

The facility in the south Houston suburb of Pearland is a
117,000-sq.-ft. (10,869-sq.-m.) concrete tilt-up building that will be a
production facility for the making of catheters. The $19.5-million capital
investment creates 160 jobs.

“The scope of our site search was south of Houston to allow our
employees at our existing plant in Angleton to commute to the new site,” says
Frioux. “We looked at eight to 10 sites before choosing Pearland. The city has
been extremely generous with their time and very helpful in connecting us with
other businesses in the area. They have a very good network in Pearland and a
very good economic development team.”

Frioux especially likes the work force in the
region. “We had a hurricane there three years ago, and a number of our
employees left their homes to come over to our plant in Angleton and help us
rebuild our plant within 30 days,” he says. “They are highly qualified
employees. We hire a lot of engineers. It is a tremendous work force.”

Although Merit Medical is headquartered in the
Salt Lake City suburb of South Jordan, Utah, Frioux says the
company has found an exceptional labor pool in Greater Houston.

“This new facility will have a clean room and
it will increase our manufacturing efficiencies in making extrusion products,”
he says. “It gives us a better constructed building in an upscale business park
with excellent transportation access right on the I-288 Corridor. Trucks will
be able to get in and out of our new site quickly.”

With 2,500 employees worldwide, Merit will do
close to $400 million in global sales this year, says Frioux. Established in
1987, the company operates plants in China,
France, Virginia
and the Netherlands.

“We have been in the Houston area since an acquisition about 12
years ago,” he adds. “The city, the county and everyone in the region have made
us feel very welcome here.”

Jeff Moseley, president and CEO of the Greater
Houston Partnership, says that spirit of South Texas
hospitality is one thing that sets his area apart.

“We continue to be a very business-friendly
community,” Moseley says. “We are very competitive in affordability. That has
to do with the fact that we don’t have planning and zoning. We have a very low
regulatory climate and a fabulous work force. Going to work and getting the job
done are very important here.”

In fact, more people are going to work in Houston today than ever
before. With a work force of 3 million people, Houston
has gained more jobs than any other U.S. city since the recession. From
2006 to 2011, Houston
added 109,700 private-sector jobs.

Houston is the
first major metro area in the country to fully regain all of the jobs that it
had lost during the recession. The Global MetroMonitor rankings released by
Brookings in January showed that Houston’s
economic growth ranked 19th in the world — the best rating on the continent.
The ranking includes such factors as population, employment and per-capita

One District, Four Languages

There are no signs that this growth rate will
slow down anytime soon. “Over the next 30 years, Texas will grow from 25 million people to 50
million people,” says Moseley. “We will become the most populous state in the
nation. Houston will gain the equivalent of the
population of Los Angeles
during that time. We will gain more than 3 million people. About 80 percent of
the population growth in Texas will occur in
the triangle of Houston to Dallas-Fort Worth to San Antonio.”

Currently, the city of Houston has a population of 2.1 million, the
fourth largest in the country, while the metro area has a population of 6 million.

Moseley notes that “everything we do today is
just putting the foundation in place for this vast global community. There is
no ethnic majority in Greater Houston right now. We really do look a lot like
the future of America

To illustrate his point, Moseley notes that
“in one of our districts, the election ballot is printed in four languages —
English, Spanish, Vietnamese and Mandarin.”

Project activity abounds throughout the metro
area. Chicago Bridge
and Iron Works is planning a $25-million upgrade at its existing plant in Pasadena. The project
moves 35 highly skilled jobs from New Jersey
to Houston.

Neutex Lighting is relocating its LED lighting
headquarters to Houston,
bringing $2.5 million in capital investment and creating 50 jobs. Schlumberger
Ltd., the world’s largest oilfields services company, is expanding by $9.6
million and adding 175 jobs.

“We are projecting 85,000 new jobs in our
region this year,” Moseley says. “When you look at the performance of our metro
economy, it puts us up with some of the top performers in the world like Beijing, Shanghai and Rio.”

Home of the Texas
Medical Center
and M.D. Anderson, Houston
ranks as a world leader in the biomedical field.

“More than 95,000 trained medical
professionals go to work every day in downtown Houston,” Moseley adds. “You couldn’t build
that today if you tried. The R&D and intellectual property that come out of
that cluster put Houston
at the forefront of the cure for cancer.”

With the widened Panama Canal set to open in
the next 36 months, Moseley says that the Port of Houston
is poised to grow exponentially in cargo volume. “The next step for us is to
add the rail intermodal infrastructure,” he says. “We really are the gateway to
the Americas, and our ties
to Latin America will only get bigger.”