Opening a business requires courage, and for entrepreneurs, the stakes are high.

Few understand this better than Aaron Santos, one of four owners of Two Saints Baking Co. and Caf, which opened Jan. 16 in Leander. Santos said fear perpetuates a rumored weak economy.

"I think that people just need to be brave, and that's what we're doing here," he said.

For the last six-and-a-half years, the City of Leander focused on attracting big retailers, Economic Development Director Kirk Clennan said. Secondary to this goal was encouraging local entrepreneurship, luring industrial and office employers, and promoting destination tourism.

But Clennan said in 2012 he hopes to shift the emphasis on retail and return to the basics of economic development: the recruitment, retention and expansion of primary employers.

"It's become very apparent in the last few weeks, when after six and a half years of recruiting Walmart, Costco and roughly 4,000 other retailers to the community, they decided to go somewhere else besides Leander," he said. "And that was compounded by the loss of J.C. Evans."

J.C. Evans Construction Inc., formerly one of Leander's largest employers, filed for Chapter 11 bankruptcy protection in August and announced layoffs for 300 employees in December. Clennan said the loss reiterates a need for steady and gainful employment in Leander.

Leander has about 60 primary employers, including H-E-B, Dennis Steel and Leander Independent School District, yet about one-third of the population leaves the city on a daily basis for work, Clennan said. If more people stay in Leander for jobs, they will also purchase clothing, gas and food locally, pushing money back into the city through sales and property taxes.

"I think bringing in primary employers needs to take on a whole new level of effort because when people have a job—not an Applebee's job or a McDonald's job, a primary employer job—it affords them the benefits and the disposable income to buy houses, to purchase groceries, to buy cars, things like that," he said. "It also keeps them here. They live, work, play, learn, shop and stay in Leander, Texas."

A roller-coaster history

A review of the Leander economy over the last 12 years is akin to a tale of two cities.

Leander construction values soared between 2000 and 2006, along with sales tax receipts, water permits issued and other economic indicators. But that growth either dramatically slowed or reversed as signs of recession crept into the city, particularly over the last two years.

Clennan said despite Leander's recent roller-coaster history, the economy seems to be on a gradual uptick.

"The average growth rate for Leander over a 12–year period of time is 10.25 percent, which is pretty mind-boggling regardless of the past two years. That's a staggering number considering the unpredictable nature of what's going on," he said. "There was a time I sort of bought into the myth that Texas is untouchable; no, we're not. It takes longer for us to be affected because we are so diverse now, but it's a global economy."

The front lines

Greater Leander Chamber of Commerce President Mary Bradshaw visits new businesses and said many have opened and closed in Leander in the last five years. She said the local economy didn't feel a recession until 2010, when real estate agents began dropping their chamber memberships, followed by local shops and restaurants.

"We started seeing more of [the local shops] closing but not a huge amount. We're still getting new things, too, so it hasn't felt terrible, but we have had some close," she said. "I think they're still feeling like they are in the depths. I don't think anybody is totally optimistic. I think everybody is just holding their breath and waiting."

Some Leander businesses can not afford to wait. Melissa Van Baast, owner of Gorgeous Nails and Demi Spa, which opened in July, said she tried enticing new patrons with coupons, deals and advertising. But like at many locally owned businesses, nothing seems to work, and she is considering selling her salon.

"The clients we have love us and have been fiercely loyal, and we are so grateful for that," she said. "But we really need more of them, a lot more."

Cause and effect

Unemployment and economic unease could explain signs of stagnant local money flow. Leander foreclosures were at an all-time high with 151 in 2011, compared to 132 foreclosures in 2010 and 105 in 2009. Average unemployment in 2011 topped 5.8 percent, the highest in more than a decade but still the lowest of any city in Williamson County, according to the Texas Workforce Commission.

Sherry McDonnell, executive director of Hill Country Community Ministries, which supplies needy families with food and clothing, said the number of families seeking assistance increased 24 percent since 2009. Last year, the nonprofit distributed more than 450,000 lbs. of food to 4,951 families, most of whom live in the greater Leander area.

"Between 40 and 50 percent of those people come to us because of unemployment," she said. "I don't see a decrease at this point in the need for our services."

Moving forward

City Council will convene in February to consider Clennan's recommendation to refocus on recruiting primary employers.

At least six new businesses planned to open in Leander in early 2012.