This program is supported by Texas Mutual Workers Compensation Insurance.

Welcome to Business of business, San Antonio.

I'm Henry Cisneros.

On this episode, we're going to look at the explosive growth between San Antonio and Austin.

So remarkable.

It is now referred to as a mega region.

This growth was examined in our 2023 documentary, San Antonio Austin The Emerging Mega metro here on and is now the subject of a new book.

The Austin San Antonio Mega Region Opportunity and Challenge in the Lone Star State.

I want to welcome two people who know this subject well from Austin Gary Farmer, Past chair for Opportunity Austin and currently President of Heritage Title Company of Austin, and A.J.

Rodriguez, representing Texas 2036, a nonpartisan public policy think tank focusing on data and research to move Texas forward.

I think we're exceedingly fortunate to have the two of you join us for this discussion.

I can't think of two people in our region who are better qualified to talk about the subject of both San Antonio and Austin separately, but also the region as a whole together, which, as we know, is much more than Austin and San Antonio.

It's Williamson County with almost going to be a million people to the north of Austin.

It's the corridor with San Marcos and Hays County, Carmel County and New Braunfels, all those communities like Taylor and Lockhart and Bastrop and Seguin and so many others to the west as Bernie that are growing very rapidly.

I mean, it's fascinating to see the national statistics every time they're published.

And there are these communities among the fastest growing in the nation, these counties among the fastest growing in the nation.

Both of you have worked on this subject for a long time.

I'm pleased to say that the most recent conversation that has intensified started with a Kalyn documentary on the mega region, which then required a deeper dive and resulted in a book, and which now, unlike most documentaries and books, is actually taking form, with leaders in the community coming to together and talking about how are we going to address these things?

So often people say, well, there's a problem.

Somebody needs to do something about it, but we don't know who that somebody is.

Now we're getting to form an effort of somebody who are going to actually address these questions.

I think it's important that people know who you are and how what you have done in your careers brings you to this point.

So, Gary, let's start with you and tell us a little bit about your introduction to the subject of economic development in a civic way and, and what you've learned along the way.

Sure.

Thanks, Henry, for having us.

So I grew up in a small town, West Columbia, Texas, which I might mention was the first capital of the Republic of Texas.

I've got to say that, or they won't let me come home.

I moved to Austin in 1975 to go to the University of Texas, and I knew very quickly that Austin would be my home, my longtime home.

I loved the place.

I loved it then.

I love it now even more.

I went to undergraduate in law school at the university, graduated and spent a little time in the old field as a land man, and then got into the title insurance business where I've been for the last 41 years.

And and that more than got into the business you created.

We joined in and tried to do our part, and that platform allowed me to be engaged civically, and economic development was a particular interest.

And really it probably started in the 1988 timeframe when Pipe Powers and Pete Winstead and Bobby Inman and others were recruiting semi-truck to come to Austin.

And so I got my feet wet helping those guys who were really moving, you know, the mountain.

And and I found that I enjoyed it greatly.

It was a wonderful platform to invite people in.

That was the period when Austin was going from Motorola and IBM to MCC and Semitic bona fide national technologies pioneering.

That drew attention all across the country to the fact that Austin might just be the next Silicon Valley.

Yes.

I mean, both symmetric and MCC were consortium.

And so they brought component companies.

Yes.

You know, that that participated that brought talent and talent begets talent.

Yeah.

And other companies wanted to follow.

And in the 90s we had a good run.

And then the.com bust or tech wreck was disruptive.

Austin lost about 40,000 jobs in the city of Austin, lost about $150 million in tax revenue over a two year period.

So we knew we had to do something and we thought it should be something different.

We had never really collaborated or cooperated, even as a region in our five county MSA.

And so that was very paramount that we look at an opportunity where we could learn to work together, understanding that if something good in San Marcos happened, there would be a creative benefit in Georgetown and so on and so forth.

And so we we put a new entity together called the Greater Austin Economic Development Corporation, most commonly known as Opportunity Austin.

It's private led.

We today have about 450 investors that put their capital in.

And we've got a first rate staff and we actually recruit the globe.

This is more than just a story of economic development, because what has happened in Austin is truly unique.

It's the growth story of our time in the United States.

People look at that as skyline and they say, whoa, what happened?

So tell just a brief word about what are the factors that came together to make that happen, and then your sense of where this is going.

What's Austin going to be?

Austin's always been a great place economically.

Development for the longer arc of history was rather laissez faire in Austin.

If something happened, great.

If it didn't happen, we still lived in Austin.

That was great.

But we we really took our time.

We we hired a great consultant who helped us to understand actually who we were and what our assets, what our advantages were.

And then we put a very intentional private sector plan together, working in great cooperation with the city of Austin, Travis County, the state of Texas, but a private sector plan.

And we started to work over the last 23 years.

Austin has been the number one creator of jobs in America.

Over 800,000 jobs, well over 100% job growth.

The number one recruiter of corporate America into Austin, the number one creator of wage in America, the number two GDP growth in America.

So it's been a success story by virtually any and every measure.

And so I think we can continue to build on that and to to capitalize on that.

But understanding with that growth, with that opportunity also come challenges.

And so, you know, you can't harvest all the time.

You've got to till the soil you've got to, you know, you've got to plant and fertilize and nurture and make sure that we don't outpace ourselves.

Yeah.

Hey, J. You have a background that is ideal for thinking in terms of the region.

You were with the Hispanic chamber in San Antonio, with the greater chamber in San Antonio.

You were an assistant city manager, had major departments reporting to you, and then you joined the private sector.

And the Zachary Company, which is renowned for its construction expertise across Texas and the country, indeed the world.

And now you have been at Texas 2036, which is a forward looking plan for the state of Texas.

Tell us a little bit about how those experiences congealed with you, a sense about the future and how we how we work toward it.

Happy to, Henry.

And first of all, thank you so much for having both Gary and I. It's a it's a it's an honor and pleasure to be with you, Mr.

Secretary.

And of course, my friend Gary here, just listening to the story of Austin and the challenges they've had, but also the extraordinary growth.

The one name that comes up over and over and over again is Gary Farmer.

He's Mr.

Economic Development of Austin, for sure.

If it hadn't been for Gary, that skyline wouldn't look like it is today.

I assure you that just based on the conversations I've had.

So that's a true statement.

I wanted to be here with Gary, and I see that in San Antonio coming out.

I see the opportunities.

Austin, his $25 billion of investment on the ground today.

San Antonio understands that level of investment has to put into its downtown and is starting to make maneuvers and support efforts in that direction and initiatives in that direction, from my perspective and my my background.

Henry, I've been now at Texas 20, 36, 299 weeks.

Who's counting?

I am so described for our audience.

Texas.

Sure.

So we are a nonprofit, nonpartisan public policy organization that's focused on moving the needle on education and health care and infrastructure and government performance and a number of other areas very comprehensive between now and our bicentennial, our state's 200 year budget.

You work with the governor, you work with the private sector.

You work with the universities and published periodic reports.

That's correct.

Sort of goals for Texas.

It really is.

What's really been kind of the formula to success for us has been the data.

It's really ensuring that we're presenting data and being seen as a resource to legislatures.

So we don't lean left, we don't lean right.

We lean data.

And that's had some efficacy for us.

Now, you have concluded that the Austin San Antonio region is a major engine for the future of Texas, and you're on the ground floor of putting new thoughts, new structure, bringing new people together.

Talk a little bit about how you came to the sense of the region.

When I first started, former secretary Margaret Spellings hired me and continued to work there with David Lee.

Brown, who was former president of rice, was fantastic mentors.

They really asked me to go out on the road, and what we did is a Texas tour, and I visited over 40 somewhat cities.

And what's really kind of emerged from that, Henry, is this it essential interest in regionalism?

So you see this in El Paso versus where the border Plex alliance that is working with Sweden, Juarez and New Mexico, you see this in places that have done this historically, like DFW.

And you've talked much about the North Texas Commission being since 50 plus years, you have the Greater Houston Partnership.

It's been doing this for 25 years in terms of a coordinated, intentional, collaborative effort.

I mean, even RGV partnership is doing it.

Beaumont, Port Arthur.

So it's the Valley, High Plains in the Amarillo Lubbock area.

So you're seeing this in every single area within Texas.

And it just makes sense for us in San Antonio, 75 miles apart, each growing rapidly, each, you know, kind of counting up in the national numbers, showing up in the national numbers for its growth, to think about those things that the region ought to be thinking about.

Name some of the things between the two of you.

Name some of the things that a region approach is the right thing to do.

Well, clearly we need to be thinking about infrastructure of all sorts ground infrastructure, highway infrastructure.

It's been a little minute on each one as you go through them.

Transportation.

What's the challenge?

Well, any any one of us, whether living in San Antonio or living in Austin, going one to the other, knows that we have congestion and it's only going to get worse if we don't act.

I'm so pleased driving down this morning and see all the things going on on I-35, but we need to make sure we do the whole segment.

And it maybe shouldn't just be highway infrastructure.

Maybe we should.

First of all, not just IJ 35, but she won 30 and 281 and double deck.

Yes.

And all of that and all the above.

And then maybe some east west connectors like highway 46 north of New Braunfels, for example.

And then there is the dream of rail.

How do you how do you guys feel about that?

I think we need all the above approach like you just outlined.

Henry, I don't think I think the we're getting to a place where it's going to become a crisis.

You know, flying in from Dallas to Austin, San Antonio, you just see a complete civilization everywhere, and then a little bitty bitty string connecting all that together, which is I-35 of lights.

We probably we probably will blow our opportunity to work together as a region if we depend on one single spine.

That's right.

Which is already burdened with 18 wheelers coming up from Laredo in Mexico and on up, and then the normal traffic.

So it is absolutely clear and certain that surface transportation is an important part of bringing this region together.

Okay.

What else?

Well, just remember the projections of 8.5 million people in this mega region, right, are undeniable.

We are five points.

That's where we need to head is how do we accommodate that?

Got a good point from from north of Austin to south of San Antonio.

We're presently 5.3 million people.

Most people don't know that 5.3 million people, which is larger than 25 states, larger than the state of Louisiana, be the 10th largest metro in the country, right?

You're right.

Census says in 2050 that's going to be 8.3.

Do the math.

That's 3 million people, a city the size of Chicago.

Somehow accommodating them into this region in the next 24 years.

And it's not a question of if it's going to happen.

I think you're right.

It's going to happen.

And it's really not even a question of whether we want it to happen or can stop it.

I don't think I don't think we can.

No, I don't think so.

So the question is how do we work together?

You've mentioned transportation.

What else is on your plate?

So water clearly power water water.

Talk about that water.

So you know, we live in a drought prone region and we've got to be mindful of that.

Probably going to get worse if if climate change will get worse.

And so I think we need to look at new technologies.

We need to look at groundwater desalinization.

We need to look at aquifer storage.

Now San Antonio I would suggest is ahead of Austin.

And doing some of these types of projects to Ridge project was very, very foresighted and other groundwater sources that San Antonio has developed.

And desalinization and water reuse source is ahead of where Austin is.

We've been passive I would say, because we have the great Colorado River, which has been such a source of vitality and economy and all the and recreation and all those things and the drought of record in 1955, the Highland Lakes dramatically declined.

They would not be able to support Austin today.

That is true.

That is correct.

And there's a lot of research on that.

And so it's right here.

We're looking at it and we need to project forward and see how it frankly would be a limiting factor on the growth of the region.

If we do not proactively work on water.

It really is a limiting factor, Henry, across the entire state in terms of what we're encountering, it's $250 billion problem that we've identified at Texas 2036, in terms of water supply and aging, deteriorating infrastructure throughout the state.

We leak the size of Lake Buchanan every single year because of our aging, deteriorating water infrastructure.

The water pipes repair next subject after water.

What would you say?

Power.

Power meaning electrical power, especially now with data centers that soak up power.

Our Microsoft data center here uses more power than the Toyota plant that produces 240,000 trucks a year, right?

And we're talking now multiple data centers.

There are some cities in America which are now saying the power that the data centers there draw is bigger than the entire municipal draw on power.

I don't know whether that'll be true for our region, but if it is, we've got some work to do.

What do you think?

I think again, we need to take an all in approach.

Austin relishes to be the number one green power city in the world, and that's noble.

But at what cost?

You're way up there on solar, solar and wind.

Yeah.

I think number one in the country among municipalities, San Antonio is close.

And that's fantastic.

But your point is we got to do more.

We got to use natural gas.

We've got to use nuclear.

Yeah.

I think if we're going to be talking about the future, we need to be thinking about the future, and we need to be thinking about what technologies are available to accommodate our need and at what cost.

Right.

You know, we need to affordability as an issue that we need to talk about in the mega region.

Two other issues beyond power would be housing.

Housing okay.

Education, training.

Green space.

Talk a little bit about those as regional issues.

I think housing affordability and affordability in general.

People are really worried about how things are impacting their pocketbook throughout the entire state.

And in this region, things are beginning to become more expensive as it relates to to housing affordability.

So innovations and construction materials, ability to get permitting done quickly, local zoning issues, local zoning, relaxing of those zoning rules that are too strict in certain ways permits.

Right.

You're right about materials, maybe new forms of housing, allowing manufactured housing and places, that sort of thing.

How big a priority is that?

I know a few years ago, from one year to the next, rents in Austin went up by something like 40%.

Could you feel that in the economy?

Absolutely.

And particularly with young professionals.

Young families.

Yeah.

Now that could be a limiting factor also depending on perspective, fortunately or not.

Rents have come down significantly in Austin right by prices of homes.

Supply.

Supply went up, your supply went up and and growth slowed a bit.

And so you're moving back towards equilibrium.

But again, we need to be mindful of this on a go forward basis.

Now a lot of the housing around Austin is happening in places like Buda and Kyle and as far as Bastrop.

And that's why Williamson County is going to a million people eventually, which is round Rock and and Cedar Park, Georgetown, Georgetown.

So a regional approach to housing availability would seem important, right?

I think we should all be in sync on what we're trying to accomplish.

Each of the jurisdictions.

Yeah, with their own twist.

I mean, talk about training and education.

You've been in economic development for a long time, and you know, AJ, you as well, that some people think the critical factor in economic development is education and training of the workforce.

I can assure you, Henry, that the number one reason that Austin, the Austin region has been successful is talent is workforce.

And that's been a critical component of opportunity.

Austin story all along the way is how do we make sure these young people stay in school, graduate from high school?

We have a gym in Austin with Austin Community College, and it's producing great workforce across the board, right.

You know, we talk about it as an Austin thing, but we include San Antonio in that we say within 100 miles of Austin, we have over 400,000 college students.

UTSA is a big part of that.

Trinity is a big part of that.

And our community college here that has a of 88,000 and getting awards as the best in the country, literally AJ the talent issue.

How do you from your background at 2036?

How do you see that?

I want to go back to what Gary was saying as well.

The two are one institutions 70 miles apart that doesn't exist really anywhere else.

University of Texas and UT, Austin City, San Antonio.

And then there's Opportunity State.

That's right.

With 43,000 students.

Yes.

And all along the corridor.

And you think about all the way from Georgetown all the way to A&M, San Antonio.

It's high concentration of higher ed and exists in the city with both the University of Texas and A&M in the same, same jurisdiction.

So that's a that's an amazing asset that we have.

But we do have to address post-secondary attainment.

So right now only 90% of our kids go into some type of post-secondary or graduate high school.

And then 60% of those go into some type of enrolling of post-secondary, but only 37% actually achieve a post-secondary credential after six years.

So that gap is what we need to address work.

Other aspects of collaboration.

I mentioned green space, and that's the Great Springs project, for example.

Great project, but a lot of others that we need to be doing.

Airport connections critical.

Austin is doing a fantastic job of international connections.

San Antonio seems at the moment internationally you'll be facing to the south, but collaboration.

And frankly, I wouldn't be surprised if other airports don't spring up.

I know San Marcos is talking about enhancing the old Gary facility.

Cetera.

Let's let me ask you, because we're running to the end of our time.

Just tell me in your visions what is the reason?

What's the upside of the collaboration?

What's the upside of being part of a region like this?

Some people would say, no, no, no, no.

Stop.

We're doing fine just as we are.

But in America, you really can't stop you.

Either you either go forward or you end up slipping backward.

And with with population growing, we need to create jobs for the upcoming generations.

Tell me in your vision the upside each of you will start with you.

Age of collaboration across this broad mega region.

I mean, the upside is is enormous.

And I think even more so is the potential downside if we don't take advantage of this moment, Henry, in this collaboration.

So we're seeing both in Austin and San Antonio, incredible enthusiasm from leaders from both cities that want to do something that essentially is intentional about the kind of growth that we want to have and experience versus the kind of growth in that we might have without intentionality, that we may not want, that we can't reverse in the future.

And that's really where I think the key is, is that that ability to be strategic and focus together and do that in a big tent kind of way, because right now we have collaborative efforts.

Opportunity Austin does talk to greater SAT and Austin Chamber, which I'm board member on talks with Greater San Antonio Chamber.

And that's there's all these areas and San Marcos etc.. Gary your your explanation to people of why it's wise to work together and what's what's the what's the upside potential.

So 20 years or so ago someone asked me as succinctly as possible, describe opportunity Austin I said jobs for families, return for taxpayers, opportunity for companies which could be expanded to opportunity for entrepreneurs.

And that's worked well in Austin.

I think it could work exceedingly well all up and down the corridor, work well in San Antonio, and I want to compliment greater SAT and Mike Lynn and Randy Smith and Jenna, who have done a fabulous job bringing the San Antonio business community together.

If we put the county as rush is there now?

Correct?

Yes.

If we put the power of these two dynamic cities and two dynamic regions together, there should be nothing to stop us.

And I think we all as as parents and community members and grandparents, in some cases, we want to see the young people, our children and grandchildren and others be able to have a quality of life, be able to sustain themselves, support a family, grow a family, and and have that here where the you know, when I got to Austin, I met many, many great people and they all went home because Austin didn't have the jobs to hold them didn't we didn't really seek them in those days, in those days.

But today they can and they do.

And so if we can create that for this broader area in the great state of Texas, we will have done it.

Well defined job.

Can I just add one other thing to that?

And I completely agree, Gary.

And it's almost like we have a responsibility, obligation to come together in this way so that we can work with DFW.

We can work with Houston in the future to create this Texas triangle that's going to, as you said in your book, Henry, surpass, you know, economies of countries across those world.

Broader ambitions are right.

But I think you put your both of you put your finger on it when you say jobs for families, better education, great colleges and universities, institutions that a great region can afford and it ought to have quality of life.

You said it.

That's what's in it for people.

And I think the the opportunity is there.

And I am grateful to you for being here for this program and explaining to people, but more grateful for the work you're doing every day and continue to do what you've been doing for years.

And thank you.

Thanks.

Thank you for joining us on business and business, and we'll see you next time.

This program is supported by Texas Mutual Workers Compensation Insurance.