Plano’s economic incentive efforts are coming full circle

Since welcoming Frito-Lay in 1985, Plano has used tax abatements, grants and other economic incentives to attract an array of corporate relocations and headquarters. In the past few decades, the city has built upon its corporate and community-wide amenities to entice companies from a variety of industries.

With global names like Liberty Mutual, Toyota Motor North America and FedEx Office and Print Services making their way to Plano, Economic Development Director Sally Bane said the city has a long history of corporate successes to market itself well into the 21st century.

“It takes a while for communities to do that; you have to have all sorts of right ingredients,” she said. “All things together make the whole greater than the parts separated out. It’s bigger than just Legacy West or Granite Park.”

Plano’s economic incentive efforts are coming full circle

Laying the groundwork


Since its creation in 2006, Plano’s Economic Development Incentive Fund has helped bring $1.7 billion in improvements in the form of corporate relocations and headquarters construction. Such projects have increased Plano’s sales tax base and increased job opportunities to the area, Bane said.

In today’s competitive market, almost all opportunities to land a company include an incentives package, Bane said. These packages are designed as an investment on both sides of the table: The city receives land improvements and a stronger tax base while a company and its employees take advantage of the city’s existing infrastructure and amenities.

“Your existing business base is always a great selling point for any future opportunity that you might get,” she said.

Frito-Lay served as a springboard for an even larger tax base as its relocation set the precedent for corporate relocation in Plano. When a city considers extending an offer, however, it must first make sure it is a good opportunity for the city as a whole, Bane said.

“We market what we build, but we start with the foundational elements that allow businesses to thrive here. We help build and stabilize those and that gives us something to market,” Bane said. “Projects that land here really are the culmination of decades of work and investment in this community that creates the environment that allows you to market the business opportunities here for the likes of Toyota, Liberty Mutual and FedEx.”

Long-term planning


As a City Council member in 2005, Plano Mayor Harry LaRosiliere said he remembers discussing the importance of beefing up the city’s corporate draw around the time Frisco announced its deal with Stonebriar Centre. At the time, Plano was at a disadvantage when it came to providing competitive economic incentives packages. This was due largely to the fact that the 1 cent portion of sales tax revenue that 4A and 4B cities like Frisco use for economic incentives was going to Dallas Area Rapid Transit. State local government code in 1979 established these designations, which allow cities to adopt a sales tax to fund its economic development corporations. The code also defines the types of projects EDCs can undertake.
“I think we’ve become a bit more creative and a bit more aggressive, and we’re seeing the results.”

— Harry LaRosiliere, Plano Mayor

Unlike Frisco, whose EDC is a nonprofit organization and whose incentives are generated solely by sales tax dollars, Plano’s economic development corporation is a city department funded through general revenue. Its incentives are generated through property taxes.

“That put us in a disadvantage [at first] because those cities had a lot more dollars available to them to attract businesses,” LaRosiliere said. “Competition can either kill you or  make you stronger.”

In response, Plano City Council in 2005 approved a 2 cent property tax increase to dedicate toward an economic development fund. That, combined with a highly ranked school system, robust infrastructure and a strong workforce, allowed the city to compete without breaking the bank, he said.

To date, Plano’s economic development fund has allocated $45 million through incentive agreements. The takeaway for residents is that this in turn helps offset other expenses because of the larger tax base the companies create.

“Essentially, [the city has] a very enviable portion of [its] revenue being generated from the commercial sector. The revenue it takes to provide services is essentially underwritten by this very robust commercial sector,” Bane said.

What was once an expense for Plano, however, is becoming its asset. Although Plano gave approximately $78 million to DART last year, the public transportation system has served as a catalyst for growth in downtown Plano and in other parts of the city, LaRosiliere said. More than 50 percent of the city’s property taxes are generated by these businesses, which contribute to Plano’s ability to keep its tax rate low.

“We don’t have to give that much money to someone else to lure [them here] because of everything we have to offer,” LaRosiliere said. “I think we’ve become a bit more creative and a bit more aggressive, and we’re seeing the results.”

Plano’s economic incentive efforts are coming full circle

Strengthening the region


Incentives are typically considered once a company has evaluated location options on fundamental issues and is trying to choose from a small list of equally qualified regions, said Mike Rosa, senior vice president of economic development for the Dallas Regional Chamber. In the end, incentives can provide a boost to a city’s chances of winning a company over. However, North Texas cities have also realized the importance of having a strong and timely return on that incentive investment to taxpayers.

It is also important that communities work together as a team to capitalize on the opportunities, Rosa said.  When a company chooses Plano or another regional city, it also has a lot to do with the region and/or state as a whole offering the complete package of assets, he said.

“When the Plano team recruits corporate locations, it’s a win for the [Dallas-Fort Worth] region,” Rosa said. “Other local communities [also] benefit from the lift in jobs, investment, spending and overall success caused by new companies moving here.”

Plans for the future


As the city looks to its remaining 7 percent of developable commercial land, Bane said this is still a significant amount of land to help round out the city’s business community. In order to continue to be competitive, Plano has to continue to participate in regional conversations about water, air quality and transportation, Bane said.

“There is a larger philosophical conversation about air quality and mass transportation,” she said. “As we continue to grow, we have to start thinking regionally about the most efficient way to move prospective employees and their families to [these] jobs. Transportation needs to be an ongoing conversation.”