Economic Outlook Conference emphasizes energy growth in The Woodlands area

With Anadarko's second tower completed, energy companies such as Exxon Mobil quickly moving into Hughes Landing and the expansion of other oil and gas corporations around Town Center, the energy sector is at the forefront of much of the growth in The Woodlands.

The energy industry in The Woodlands was the focal point of the 28th Annual Economic Outlook Conference on Feb. 14, hosted by The Woodlands Area Chamber of Commerce. Chamber President Karen Hoylman said the event—which saw a record 600-plus attendees—was specifically geared toward the energy sector, a growing industry in The Woodlands area.

"This is a relatively new industry as a whole for us," Hoylman said. "We've had Anadarko here, but with ExxonMobil coming and all the companies coming here, [energy] is going to be a big, big employer [in The Woodlands area].."

Gil Staley, CEO of The Woodlands Area Economic Development Partnership, said the energy industry made up more than 32 percent of all the employees in The Woodlands area in 2013 that worked for a non-retail employer with at least 100 employees.

The number of employees in the energy sector grew throughout the year as new businesses were added and others expanded, Staley said.

"Plus, just having the ability to say you've got ExxonMobil in your home is a remarkable story," Staley said. "[When] we go out and recruit, we proudly say who our tenants are."

Growth was not just seen in the energy sector, Staley said, with Texas Children's Hospital announcing its plans to open a hospital in The Woodlands. He said major non-retail employers have added more than 5,000 jobs to the community throughout the last five years, and the EDP saw 100 percent more requests for proposals in 2013 than in 2012, which had been a record year.

Frank La Rosa, senior vice president for Layne Christensen, praised the sales job by The Woodlands Development Company, citing the community's government, quality of life and real estate as factors why the company relocated its headquarters to Hughes Landing in 2013.

"We've very glad to be here and I'm enjoying every bit of it," La Rosa said. "I am so impressed with how Howard Hughes [completed] our building by September. We really appreciate the hospitality."

Woody Pace, president of Talisman Energy Services, said the Canadian-based company runs much of its operations for the Eagle Ford shale basin out of The Woodlands. Pace said one of the company's biggest challenges is providing the workers and craftsmen necessary for the industry, and The Woodlands can help attract new employees.

"Being located here in The Woodlands is a huge tool to attract the talent we need," Pace said. "It's a great place to live and work."

ExxonMobil campus construction continues

Employee relocation to the ExxonMobil campus south of The Woodlands could begin later this month as construction nears completion at the end of 2015.

Leslie Hushka, communications manager for the ExxonMobil campus in Spring, said the facility was announced three years ago and is planned to accommodate 10,000 employees from upstream, downstream and chemical operations in one facility.

"All of the buildings are out of the ground," Hushka said. "They've been topped out. All the parking garages are completed. In fact, we begin the move in of the first [employees] in late March, early April."

The 20-plus buildings on the ExxonMobil will include a 100,000-square-foot wellness center, a 17,000-square-foot child care center, a laboratory, and the Energy Center, a glass cube that stands 85 feet tall and serves as a gateway to the campus. Hushka said the Energy Center will house a training center and meeting space.

She said the campus will house three large parking garages, on-site dining options and amenities, and plenty of informal, collaborative areas.

Among the technologies featured at the campus include a laboratory to study hydrocarbon system rock and fluid properties, drilling processes, construction materials, and oil and gas treating methods, according to ExxonMobil.

The buildings on the campus are designed to minimize water use and use natural lighting to conserve energy.

Hushka said the campus will see between 700 and 1,000 visitors per day.

The campus will be 40 percent more efficient than the average Houston office space, Hushka said, as it will harvest daylight and rainwater.

ExxonMobil has plans to expand the species of trees on-site from 20 to 90 species through its reforestation program, which has already begun, she said.

"We are building this campus with a focus on the environment, not only during the construction phase, but for the longterm sustainability of the facility," Hushka said.

The campus will also feature on-site dining and retail services.

Alex Sutton and Tim Welbes - Co-presidents, The Woodlands Development Company

Alex Sutton and Tim Welbes, co-presidents of The Woodlands Development Company, have been recent mainstays at The Woodlands Area Chamber of Commerce's annual Economic Outlook Conference.

Sutton spoke about the latest development projects in the Village of Creekside Park, Town Center and Hughes Landing.

Sutton said The Woodlands' Class A office space vacancy rate is about 4.6 percent, about 2 to 3 percent higher than in recent years.

"The reason for that is we've brought on a lot of new office buildings," he said.

The Woodlands has about 2,100 single-family lots left to build and about 900 acres of commercial development remaining, Sutton said.

A portion of the commercial development is occurring in Hughes Landing, the 66-acre mixed-use development on the northeast shore of Lake Woodlands. Sutton said the Development Company has either reached or is nearing agreements with several establishments for its Restaurant Row, including Escalante's, Whiskey Cake, Local Pour and California Pizza Kitchen. Plans are also underway for what Sutton described as an entertainment venue.

Welbes discussed trends in home sales, including reasons for the current strong seller's market in the Houston area.

"What we have witnessed in the last 18 months is unprecedented," he said.

Welbes said that in 2009 demand for homes far outpaced the supply over the past several years, including in 2013, when home builders constructed 23,500 homes, but there was a demand for 70,000.

"For The Woodlands supply, there is not one month's supply on anything under $300,000," he said. "People ask, 'Are you finished?' No, we're not. We have several thousand more to go."

Discussion Panel - Woody Pace, vice president of exploration, Talisman Energy; Ramon Hernan, executive vice president, Repsol; Frank LaRosa, senior vice president, Layne Christensen

A discussion panel, lead by Woodlands Township chairman Bruce Tough, focused on why companies decided to relocate to The Woodlands as well as challenges they see in the coming years as their businesses continue to grow.

A primary reason cited by those on the panel for their move to the area was because of trends in shale mining and the Eagle Ford basin.

"We needed to be here," Woody Pace said. "About three or four years ago we purchased some smaller companies that were operating in Eagle Ford, and when we made those acquisitions, there was a group of employees that were based in The Woodlands."

LaRosa said among the reasons Layne Christensen chose The Woodlands was its proximity to Houston Intercontinental Airport, its strong labor and real estate markets, and its low business costs.

Each of the panel members said one of the biggest challenges they face is hiring qualified workers.

"For an energy company like Talisman, one of our biggest challenges has been the people challenge," Pace said. "We desperately need geoscientists, engineers and not only new graduates, but we're trying to find experienced folks. There is a war on talent, and we're all competing with each other."

Gil Staley-CEO, The Woodlands Area Economic Development Partnership

Gil Staley, CEO of The Woodlands Area Economic Development Partnership, discussed the demand his organization is seeing from corporate businesses interested in relocating to The Woodlands.

"Formal requests increased by 100 percent in 2013 over 2012, which was a record year," he said. "Now we have had two Fortune 250 [companies] that have asked for proposals."

Staley said companies that have relocated their headquarters to The Woodlands in recent years have brought thousands of new jobs to the community, including 1,850 employees from companies such as Layne Christensen, Waste Connections and Nexeo Solutions. Companies that have expanded recently, such as Anadarko, Strike LLC, Repsol and CB&I, have added an additional 1,400 jobs, Staley said.

"These are very well, high paying jobs," he said. "Our niche market is corporate headquarters."

Staley said throughout the past five years, The Woodlands labor market has grown by more than 5,000 jobs.

According to the EDP, The Woodlands has among the least available Class A office space. With only 4 percent office vacancy, only the I-10 area has less available at 1.6 percent.

"That number will change as we get more of that Class A office space completed," Staley said.

By Matt Stephens
Matt Stephens joined Community Impact Newspaper in December 2012. A Tomball native and a graduate of the University of Texas at Austin, Matt joined as a reporter for The Woodlands team before being promoted to help launch the Spring | Klein edition in spring of 2014 and later to North Houston managing editor in late 2015. He has served as managing editor to the Phoenix and Nashville papers since August 2020.