Texas voters bolster state’s construction industry

The state’s biggest developers have been pulling back operations recently

Texas voters bolster construction industry
(Illustration by The Real Deal with Getty)

Last week, voters across Texas’ major cities voted for increased development spending, just in time.

On a national level, some $37 billion in state and local government projects went before voters. For Texas, these voter-approved public projects could not have come at a better time, as many of its biggest private developers have pulled back building operations amid declining housing demand.

Texas’ construction sector saw the most job losses from August to September, falling from 785,900 to 783,300, according to the latest data from the Texas Workforce Commission. Experts say construction is an interest rate-sensitive field where higher costs lead to lower demand, according to the Dallas Morning News.

The voter-approved increase in the city’s hotel occupancy tax is expected to raise $1.5 billion over 30 years, with $1.2 billion slated for a replacement for the Kay Bailey Hutchison Convention Center and up to $300 million to renovate Fair Park’s Cotton Bowl, Coliseum, Automobile Building, Band Shell, Centennial Building and Music Hall. Voters in several school districts, including Plano and Austin, also approved ballot measures to spend billions on school projects.

According to a Business Roundtable study cited by construction engineering firm AECOM, every $1 invested creates about $4 in economic growth over 20 years.

Read more

Sign Up for the undefined Newsletter

Chad Schieber, chief marketing officer of The Beck Group, said the community betterment projects arrive at a time when privately backed deals are becoming more difficult to finance.

“The timing is really good,” Schieber said. “When your private work is down, you need to have more institutional work.”

It’s important for work on projects approved by local voters to be spread out among local firms, especially ones that team with minority- and women-owned businesses, Schieber said.

The convention center and Fair Park upgrades, to which The Beck Group is attached, are what he calls, “catalyst projects” that will create secondary opportunities for new hotels, retail or office space.

“These projects not only are good in themselves in terms of work, but they spur economic development right around them,” Schieber said. “You need some of this publicly financed work in order to really draw the folks in.”

— Maddy Sperling