By Maria Saporta
Published in the Atlanta Business Chronicle on Friday, May 24, 2013
HOUSTON – For metro Atlanta leaders who have been used to selling the economic jewel of the Southeast, visiting the largest city in Texas can be a humbling experience.
Houston, the fifth-largest metro area in the country, has been enjoying an economic resurgence that has become the envy of many, including Atlanta, the ninth-largest metro area in the United States.
Houston’s relative economic strength was a point that was brought up repeatedly during the 17th annual LINK visit from May 15 to May 18. The LINK trip involves a group of about 110 regional leaders from Atlanta going to another city to learn from it.
Atlanta-based Site Selection Magazine recently said Houston was the “Top Metro” in the United States for 2012 corporate relocations and expansions.
Although Atlanta likes to claim that it is one of the nation’s top centers for corporate headquarters, Houston has more than twice as many of the nation’s Fortune 500 companies based in its region — 25 compared with Atlanta’s 12.
And Houston fared far better during the recession than the Atlanta region, enjoying 2.6 percent job growth last year alone. Between 2007 and 2012, Houston gained nearly 175,000 new jobs while Atlanta lost 178,000 jobs during the same period.
It is not all a rosy picture, according to Stephen Klineberg, a sociology professor at Rice University who has been conducting a regional survey of Houston since 1982.
While the economy has grown overall, there also has been a growing inequality — particularly in the Latino and African-American communities.
Also, the city’s wealth has historically been based on the oil industry. But city leaders realized that just having a pro-growth agenda did not address Houston’s reputation of being “flat, hot and ugly,” Klineberg said.
So now the city has been working to improve its “quality of place” by adding greenways, investing in its theater and museum district, and creating enjoyable neighborhoods.
“People who come here usually come here reluctantly,” Klineberg said. “But people who live in Houston have come to love it.”
Compared to Atlanta, two other factors work in Houston’s favor: the number of governments and the number of business organizations working in the metro area.
The Atlanta Regional Commission’s 10-county area has about 5 million people. Only 10 percent live in the city of Atlanta, yet it is the largest city in the region by far. Also, no one county dominates the region. And two of the largest counties — Fulton and DeKalb — are in the midst of intense struggles between different regions of the counties and over who controls their declining power base.
By comparison, the Greater Houston area has about 6 million people, and the city of Houston’s population represents more than one-third of the region. The largest county — Harris County — has a population of about 4 million. There is little question about which governments actually have the greatest influence in the Houston region.
A similar story can be told on the business side.
In Atlanta, there is the Metro Atlanta Chamber plus chambers of commerce to serve the various counties, including a North Fulton Chamber of Commerce. Because there are so many different business organizations with members from the entire region, there is an organization for all the organizations — the Regional Business Coalition of Metro Atlanta.
Numerous other players also are involved in economic development, such as the Georgia Department of Economic Development, the Georgia Chamber of Commerce, Georgia Power Co. and other private-sector companies.
Also, the Atlanta Regional Commission currently is working on a regional economic development strategy to help improve the economic vitality of metro Atlanta.
By comparison, in Houston there is one umbrella organization that has managed to work with community and economic development leaders throughout the region. The Greater Houston Partnership is an economic development organization serving Austin, Brazonia, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, San Jacinto and Waller counties. It was formed in 1989 when the Houston Chamber of Commerce, the Houston Economic Development Council and the Houston World Trade Association merged their operations.
“We have no official authority over anything,” Craig Rhodes, director of regional economic development for the Greater Houston Partnership, told the LINK delegation. “We market the region, and we have about 35 different economic development allies in our region.”
The Partnership also has developed “Opportunity Houston” — a 10-year strategic plan with a goal of creating 600,000 net new jobs and attracting $60 billion in capital investment.
During a panel discussion among various economic developers from the Houston area, there was consensus that the Partnership helped provide research and data when they were working on projects. They also said that there was minimal competition between the various organizations.
Even when Exxon decided to move its corporate headquarters from the Katy community to the Woodlands, Lance LaCour, president and CEO of the Katy Area Economic Development Council, said he was not that upset. Exxon’s consolidation a few miles away would still be good for his community.
On a bus ride from the Woodlands to downtown Houston, the Atlanta LINK delegation passed the Exxon construction site. A group of Atlanta developers on the bus started counting nearly 20 cranes working on the 385-acre campus. After seeing all those cranes, all the Atlanta leaders could do was look the other way.