GREATER SAN MARCOS VISION 2020 COMPETITIVE ASSESSMENT Vision... · State University and the San Marcos Municipal Airport, historical activity centers and neighborhoods, and a young,

GREATER SAN MARCOS VISION 2020

COMPETITIVE ASSESSMENT Submitted by Market Street Services, Inc. www.marketstreetservices.com October 17, 2014

TABLE OF CONTENTS

Overview ...................................................................................................................................................................................................... 1

Introduction ............................................................................................................................................................................................... 3

The Greater San Marcos Story ............................................................................................................................................................ 4

Chapter One: Population Growth Dynamics ........................................................................................................................ 6

Chapter Two: Diversity, Age, Education, and Well-Being ............................................................................................ 11

Chapter Three: Regional Reality: Opportunity and Issues ........................................................................................... 22

Chapter Four: The Changing Employment Base ............................................................................................................. 33

Chapter Five: Positioning for a Positive Future ................................................................................................................ 40

Conclusion ............................................................................................................................................................................................... 47

Key Takeaways .............................................................................................................................................................................. 47

Competitive Assessment

Page 1 – October 2014

OVERVIEW In recent decades, Greater San Marcos, Texas has emerged as an increasingly prominent area home to new businesses and one of the fastest-growing universities in the country, Texas State. Nearly equidistant from the thriving cities of Austin and San Antonio, the area sits in a “garden spot,” allowing it to take advantage of economic opportunities generated by both metros while maintaining its own unique character.

In 2009, Market Street Services partnered with the City of San Marcos and its economic development team, Economic Development San Marcos, to coordinate a plan aimed at elevating economic prosperity for the residents, businesses and elected/appointed leadership of the Greater San Marcos area known as “Partners for Progress.” One of the first strategic initiatives successfully implemented was the creation of the Greater San Marcos Partnership (GSMP), which is funded by a strong collaboration of originating investors.

Since 2009, GSMP has made important headway on several fronts and began establishing its credibility and value position within the region. Now, as part of a comprehensive effort to make the community as competitive as possible for new jobs, talent, and corporate investment, the Greater San Marcos Partnership is taking the next step in its evolution by launching a process to enhance economic development activities and programs in the two-county region comprised of Hays and Caldwell Counties. At the end of the eight-month process, Greater San Marcos will have a consensus-based, achievable Vision 2020 Strategy to guide its path to short- and long-term prosperity.

PHASE 1: COMPETITIVE ASSESSMENT The goals of this first phase are to identify how Greater San Marcos has grown as a community and to gather feedback from leaders and stakeholders in the area about how various changes and developments should be integrated into the new Strategy. The goal of this data-driven component of the process is to tell the area’s story in a way that clearly identifies competitive advantages, niche opportunities, challenges to prosperity, and strategic considerations that should frame the Partnership’s program of work. Greater San Marcos trends will be benchmarked against Rutherford County, Tennessee; Brazos County, Texas; York County, South Carolina; Texas, and the United States.

PHASE 2: TARGET BUSINESS ANALYSIS & MARKETING REVIEW The purpose of the Target Business Analysis is to identify economic sectors that will drive future employment growth and opportunity in Greater San Marcos. Market Street will be taking a look at the Partnership’s current strategic economic development targets and analyze them to ensure that these sectors continue to hold value for the community and are defined accurately.

The Marketing Review will complement the target business research by analyzing the Partnership’s current marketing efforts. The Review will take a look at the Partnership’s website and internal and external marketing programs to evaluate its effectiveness as a marketing tool and to gauge how strongly it positions the Partnership’s existing target business sector opportunities.



PHASE 3: VISION 2020 STRATEGY Upon completion of the two research phases, Market Street will work with the Steering Committee to identify the key strategic priorities for Greater San Marcos based on all of the quantitative and qualitative research performed to date. The Strategy will serve as a consensus blueprint to move the Greater San Marcos area forward and will provide measurable and actionable goals and tactics needed to achieve success.

PHASE 4: IMPLEMENTATION PLAN While the Strategy represents “what” Greater San Marcos needs to do, the Implementation Guidelines determines “how” to do it. The Guidelines will serve as the “road map” for putting the Strategy into motion. The Guidelines outline the activities of the Strategy’s objectives on a day-by-day, month-by-month, and year-by-year basis.



INTRODUCTION Located between two of the most dynamic, fastest-growing cities in the country, Greater San Marcos is at the precipice of growth and development that will define its future for decades. In fact, the City of San Marcos was the fastest growing municipality above 50,000 population in the country in 2012 and 2013 per the U.S. Census Bureau. As many in the community say, “growth is coming,” and it is just a question of how it is managed, what it looks like, and can it be accommodated.

What is critical about the Vision 2020 process is that it begins solidly from a regional perspective. Since the formation of the GSMP in 2009, the two-county region of Hays and Caldwell Counties has been coming together in new and different ways to assess and enhance competitive positioning and pursue quality economic development. The diversity of the region and its component communities is seen as a positive to provide employers and talent with a range of options for locating and investing. The Partnership has worked to become an inclusive steward of regional growth; Hays and Caldwell County leaders say these efforts are starting to bear fruit. Vision 2020 is moving forward proactively from a strong regional platform established by not only philosophical movements towards regionalism but also structural changes in governance.

However, challenges remain. The region – especially the City of San Marcos and parts of Caldwell County – has higher than average poverty rates while educational attainment in many parts of the region remains low. The Greater San Marcos economy is overly concentrated in local-serving services sectors that pay below-average wages and offer few opportunities to graduates of Texas State University or Central Texas graduates looking to relocate to Greater San Marcos. There is also a diversity of perspectives among some stakeholder groups on the tenor and intensity of growth that makes the most sense for Greater San Marcos to pursue.

Even so, Greater San Marcos is about much more than just a philosophical debate on the dynamics and dimensions of its quality development. Compelling natural environments, tremendous assets like Texas State University and the San Marcos Municipal Airport, historical activity centers and neighborhoods, and a young, diverse population base make the region a compelling destination for companies, talent, and visitors.

This Greater San Marcos Vision 2020 initiative will serve to further unite constituencies behind a bold vision for systematic, sustainable, and positive change. This will result from development and implementation of a quality program for economic, community, and workforce development that focuses on the strategies necessary to become competitive for the knowledge-based jobs that drive regional wealth creation.



THE GREATER SAN MARCOS STORY The Greater San Marcos region, comprised of Hays and Caldwell counties, is in a transitional stage of its growth and in a position to proactively chart a course for handling its rapid population growth. San Marcos, the anchor of the two-county region, was the fastest growing city in the country in 2012 and 2013. Additionally, Hays County was the tenth fastest growing county in the country in 2013. It was also the third fastest growing county in Texas behind Kendall County and Fort Bend County. As will be examined in this document, Hays and Caldwell counties are different in many ways; but together they form a sub-region that stands out within the already notable Austin metro area.

These population growth rates point to certain dynamic qualities of Greater San Marcos that are proving to be a compelling draw for new residents. The following word picture is comprised of the most popular responses of public input respondents to the question, “What is Greater San Marcos’ greatest strength?”

ALL RESIDENTS

The size of the words in the graphic relate to the number of times they were referenced in the Vision 2020 online survey. Per this image, respondents feel the river, Texas State University, geographic location, community and small town feel, and natural beauty are top local assets. If City of San Marcos residents are filtered out of the responses, the top choices change, but the general tenor of identified assets remains consistent.



GREATER SAN MARCOS RESIDENTS (CITY OF SAN MARCOS RESPONDENTS REMOVED)

The two-county Greater San Marcos region is positioned in the southwestern quadrant of the Austin Metropolitan Statistical Area (MSA) and borders the San Antonio MSA, placing it in the core of what many experts feel will ultimately become a consolidated mega-region like Dallas-Ft. Worth. The San Antonio-New Braunfels MSA is the 25th largest metro area of 381 in the nation in terms of population with its 2.3 million residents, and the Austin-Round Rock MSA1 is the 35th largest with 1.9 million residents and also one of the fastest growing populations in the nation. The two MSAs are the third and fourth most populated metros in the state of Texas, behind the Dallas-Fort Worth-Arlington and Houston-The Woodlands-Sugar Land MSAs.

1 In the February 2013 OMB Bulletin, the title of the Austin MSA changed to Austin-Round Rock, though the geography remained the same. Thus, San Marcos has been omitted from the name in this report per the official definition.



GEOGRAPHY

Through the quantitative and qualitative analysis for this Competitive Assessment report, a number of key themes and questions emerged related to Greater San Marcos’ economic and demographic trends. These themes form the “chapters” of the story emerging about the region’s past, present, and future. They are:

Population Growth Dynamics

Migration, Age, Education, and Well-Being

Regional Reality: Opportunity and Issues

The Changing Employment Base

Positioning for a Positive Future

Through the narrative exploring Greater San Marcos’ trends and competitive position, key findings will emerge that will directly inform the region’s priority target sectors and comprehensive strategic plan.

Chapter One: Population Growth Dynamics Over the last ten years, the Greater San Marcos area has added 63,193 residents, a 41.6 percent change and a higher rate than all of the comparison geographies. Nearly 94 percent of these new residents are attributed to Hays County. By contrast, population growth in Caldwell County from 2003 to 2013 (11.5 percent) lagged all comparison geographies except the nation, which grew by nine percent over the ten-year percent. Between 2008 and 2013, comparatively low population growth in Caldwell County (4.7 percent) pulled regional growth to the second most rapid of the comparison geographies, with Brazos



County in the lead with 16 percent growth over the five-year period, despite the 17.5 percent growth in Hays County.

TOTAL POPULATION, 2000-2013

Source: U.S. Census Bureau

Population indexing compares communities’ growth from an arbitrary, equivalent starting point; it thus provides better perspective on the relative divergence of recent trends. Based on the following indexed chart, Hays County has grown at a significantly faster pace than both the Austin and San Antonio metro areas. Even with comparatively slow growth in Caldwell County, growth in the combined region has surpassed the Austin MSA, which reached an index of 150.7 in 2013, and the San Antonio MSA, which reached 133.4 in 2013.

POPULATION INDEX FOR REGIONAL GEOGRAPHIES, 2000 = 100


2000 2003 2008 20135-Year

Change10-Year Change

Greater San Marcos, TX 129,783 152,065 187,328 215,258 14.9% 41.6%Hays County 97,589 116,872 149,864 176,026 17.5% 50.6%Caldwell County 32,194 35,193 37,464 39,232 4.7% 11.5%

Brazos County, TX 152,415 159,756 175,138 203,164 16.0% 27.2%Rutherford County, TN 182,023 202,642 249,642 281,029 12.6% 38.7%York County, SC 164,614 178,157 220,219 239,363 8.7% 34.4%Texas 20,851,028 22,030,931 24,309,039 26,448,193 8.8% 20.1%United States 281,424,600 290,107,933 304,093,966 316,128,839 4.0% 9.0%

180.4

121.9

165.9

150.7

133.4

126.8

112.3

100.0

110.0

120.0

130.0

140.0

150.0

160.0

170.0

180.0

190.0

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Hays County

Caldwell County

Greater SanMarcos Region

Austin MSA

San Antonio MSA

Texas

United States



Insight into the source of these new residents can be gained by examining components of population change. There are two ways a community can gain or lose population: natural change (births minus deaths) and net migration, which can be further divided into domestic and international. The Greater San Marcos area’s population growth is primarily fueled by net migration. Hays County has the highest level domestic migration as a component of population change (77.5 percent) of all comparison geographies. Only half of Caldwell County’s population growth is attributed to domestic migration. The Greater San Marcos region’s percentage of population growth attributed to international migration (3.2 percent) is lower than all comparison geographies, especially that of Brazos County (35.1 percent) and the state (22.3 percent).

COMPONENTS OF POPULATION CHANGE, 2000-2013


As shown in the following table of IRS migration data, Travis County, home to the City of Austin, is overwhelmingly the top source county for new residents moving into Greater San Marcos. The Internal Revenue Service does not report an array of demographics of migrants; however, average household income data is available. New residents leaving Travis and moving to Hays have a higher average household income than those leaving Hays and moving to Travis. That would seem to be counter-intuitive to those who feel that Travis County’s rising housing costs may be driving low- to middle-income residents south. However, the average household incomes for in-migrants from Travis to both Hays and Caldwell counties are still consistently lower than the average income of non-migrants in the respective counties over the five-year period examined.

Natural Change

Domestic Migration

International Migration

Greater San Marcos, TX 21.6% 75.1% 3.2%Hays County 19.8% 77.5% 2.8%Caldwell County 41.7% 50.0% 8.4%

Brazos County, TX 55.4% 9.5% 35.1%Rutherford County, TN 28.4% 66.4% 5.2%York County, SC 18.8% 77.1% 4.0%Texas 54.0% 23.7% 22.3%United States 64.0% NA 36.0%



TOP SOURCE AND DESTINATION COUNTIES, 2006-2011

Source: Internal Revenue Service

Interestingly, the top two destination counties for net out-migration are San Antonio communities, Comal and Bexar counties. The county seat of Comal County is New Braunfels. In the minds of many Greater San Marcos stakeholders, New Braunfels is a more competitive residential destination not only because of a larger supply of mid-level and executive housing stock, but also because it provides retail, restaurant, and cultural amenities that San Marcos does not.

Texas State University is located in the City of San Marcos and is a major asset for the region. Because of its growing student population and number of academic programs, “Learning Communities” which encourage collaboration outside of classes, and opportunities for innovation and technology transfer, the university has served as an important driver for long-term in-migration. However, while Texas State University has had sizeable enrollment growth (to be explored in more detail in a later section) student population has not been the primary source of population growth for the Greater San Marcos region. From 2000 to 2012, approximately 12 percent of the region’s population growth was attributed to growth in its student population.2 In fact, the percentage of the two-county region’s population that is enrolled in college or graduate school has decreased from 17.3 percent in 2000 to 16.5 percent in 2012, signaling that in-migration is outpacing student enrollment. This is further supported by the median age of in-migrants to Hays (31.0) and Caldwell (35.1) counties. These are much older than that of Brazos County (24.9), where students comprise a larger percentage of its population. This is of course not to say that Texas State students are not remaining in Greater San Marcos after graduation, but only to communicate that current students are not an overwhelming driver of local population growth and that there is room for further impacts through successful retention of university graduates.

Data on Travis County migration rates to Greater San Marcos and the 12 percent of growth attributable to Texas State students are contrary to the beliefs of many public input participants in 2 This is based on the combined population enrolled in college or graduate school as defined by the U.S. Census Bureau. This estimate does not include students who have not declared residency; however, it does include any student who resides in the two-county region and attends any college or graduate school. More detailed enrollment information regarding Texas State University specifically will be provided in a later section.

Travis County, TX 13,721 Comal County, TX -417Harris County, TX 365 Bexar County, TX -180Los Angeles County, CA 361 Blanco County, TX -67Williamson County, TX 269 Llano County, TX -47San Diego County, CA 238 Maverick County, TX -44Riverside County, CA 227 Oklahoma County, OK -32Orange County, CA 222 Guadalupe County, TX -15Dallas County, TX 205 Hillsborough County, FL -14Maricopa County, AZ 187 Bastrop County, TX -12Nueces County, TX 179 Johnson County, TX -9

Top Ten Source Counties Top Ten Destination Counties



the Vision 2020 process. Many individuals Market Street spoke with steadfastly believe that student populations are largely driving the San Marcos area’s growth. These dynamics make the reported shortage of quality mid-level housing in the region more acute. They also call to question the multiple student-focused residential projects either recently constructed or in the development pipeline.

The U.S. Census Bureau provides detailed information on in-migrants. As the following table shows, regional in-migrants tend to be slightly older than and have similar household sizes to existing residents. They are also more likely to be white, not Hispanic. From 2010 to 2012, 59.5 percent of in-migrants were white, not Hispanic, compared to 54.2 percent of Greater San Marcos residents. In comparison, 28.3 percent of in-migrants are Hispanic, the largest minority group in the region, over ten percentage points lower than that of all regional residents.

IN-MIGRANT PROFILE, 2010-2012


Per the data, new residents have lower levels of education, higher poverty rates, and lower household incomes. A significant percentage (38.7 percent) of in-migrants have attended but not completed college, while only 27.4 percent of in-migrants hold a bachelor’s or graduate degree. This is much lower than the 33.3 percent of all Greater San Marcos adults over 25 who hold at least a bachelor’s degree and much lower than the degree attainment of in-migrants to all of the comparison geographies.

The poverty rate of in-migrants is 36.5 percent, which is over double the total poverty rate for all Greater San Marcos of 17 percent. This in-migrant poverty rate is especially concerning when compared to the benchmark geographies; Greater San Marcos surpasses all these areas except Brazos County. The average household income of in-migrants is consistently lower than that of non-migrants. In 2011, the average non-migrant household in Greater San Marcos earned $52,732. That same year, the average in-migrant household earned $36,771. These data indicators signal a negative trend.

While it is encouraging that people outside of the region may see Greater San Marcos as a place for opportunity, the region is not attracting residents with the college training required for new century jobs. As will be explained in greater detail in the next chapter, regional employers have a number of concerns related to the skill levels and employability of the Greater San Marcos workforce. These

Poverty Rate

% with Bachelor or

AboveMedian

Age

Average Household

Size

% White, Not

Hispanic HispanicGreater San Marcos, TX 36.5% 27.4% NA NA 59.5% 28.3%

Hays County, TX 30.6% 32.1% 31.0 2.8 63.4% 25.0%Caldwell County, TX 56.4% 13.6% 35.1 3.0 44.9% 40.6%

Brazos County, TX 51.5% 36.4% 24.9 2.6 61.8% 20.3%Rutherford County, TN 25.4% 29.0% 33.2 2.8 68.7% 8.9%York County, SC 23.2% 35.4% 37.8 2.6 69.5% 9.1%Texas 23.6% 31.1% 34.3 2.8 50.9% 28.1%United States 24.9% 34.0% 37.8 2.6 62.3% 14.4%



trends will be exacerbated by continued migration of new residents with lower levels of educational attainment than are necessary for today’s top knowledge and technology jobs.

Chapter Two: Diversity, Age, Education, and Well-Being Because migration is the source of 78.3 percent of the Greater San Marcos region’s population growth, it is clear that in-migrant dynamics are having an impact on the region’s overall statistics. As this chapter will show, San Marcos area population trends are shifting in both subtle and notable ways. The far more rapid growth in Hays County is also further differentiating it from Caldwell County across a number of different indicators.

Examining trends in the various age cohorts that comprise a local population provides important perspective on workforce sustainability, demand for schools, potentially looming elderly-care needs, and other community dynamics. The following chart displays the components of Greater San Marcos population by age in the year 2013.

AGE DISTRIBUTION, 2013


In-migration has not significantly boosted the region’s complement of residents in the prime working ages of 25 to 44. Greater San Marcos’ concentration in these cohorts is below Rutherford and York Counties, and the state of Texas. A comparatively average to slightly below-average percentage of workers in these age ranges would seem to imply that Greater San Marcos is not retaining Texas State graduates as effectively as it could be. Compared to Brazos County, it again becomes evident the smaller relative percentage that Texas State students comprise of the local population than Texas A&M. Residents 18 to 24 make up nearly 30 percent of Brazos residents compared to 16.6 percent in the San Marcos area. This figure is still well

24.0% 24.6% 24.1% 20.6% 25.3% 25.0% 26.6% 23.3%

17.7% 11.9% 16.6% 28.9% 13.1% 9.0% 10.3% 10.0%

13.8%12.8%

13.6%

15.4%

14.5%12.1%

14.5%13.6%

12.7%12.5%

12.6%

10.2%

14.5%14.2%

13.5%12.8%

22.2%25.3%

22.8%16.9%

23.3%27.1% 23.9%

26.3%

9.6% 12.9% 10.2% 8.1% 9.3% 12.7% 11.2% 14.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HaysCounty

CaldwellCounty

GreaterSan

Marcos, TX

BrazosCounty, TX

RutherfordCounty, TN

YorkCounty, SC

Texas UnitedStates

65+

45-64

35-44

25-34

18-24

0-17



above the state and national rates. If Greater San Marcos is able to more effectively retain these 18 to 24 year olds, its workforce capacity can be enhanced.

These population percentages again are contrary to commonly held perceptions of Vision 2020 public input participants. Many feel that the pervasive influence of Texas State has led to a situation where college students are “taking over” downtown San Marcos, and creating strong demand not only for student-targeted residential construction, but also a single-family detached housing that some feel is taking product off the market for entry-level and mid-priced buyers.

In terms of race and ethnicity trends, both Hays and Caldwell Counties are becoming more diverse, consistent with national trends. As seen in the following chart, Greater San Marcos has seen increases in every racial and ethnic population category except for African-American. Hispanic and Asian growth have been the strongest, especially in Caldwell County where the Asian population increased 85 percent from 2008 to 2013. The decline in Greater San Marcos’ black population mirrors trends at the Austin MSA level; the issue has caused consternation among regional leaders and led to calls to assess the dynamics behind these changes in order to reverse the trend.

CHANGE IN POPULATION BY RACIAL AND ETHNIC GROUP, 2008-2013


Looking at overall population concentrations by race and ethnicity, Greater San Marcos’ diversity comes into clearer focus.

White, Not Hispanic Black, NH Hispanic Asian Other

Greater San Marcos, TX 11.2% -11.0% 23.3% 37.4% 24.0%Hays County 13.4% -10.6% 27.2% 31.8% 29.0%Caldwell County -0.4% -11.7% 11.7% 85.6% -0.8%

Brazos County, TX 6.1% 24.9% 33.9% 45.9% 32.6%Rutherford County, TN 7.3% 21.6% 37.5% 39.5% 69.5%York County, SC 5.9% 9.7% 26.2% 28.1% 62.0%Texas 2.8% 10.2% 13.7% 24.8% 23.5%United States 0.3% 4.8% 13.1% 15.3% 15.0%



RACIAL AND ETHNIC DISTRIBUTION, 2013


Greater San Marcos has the highest percentage of Hispanic residents of all the comparison geographies except Texas. Whites comprise just over half of the total population. Despite rapid growth, Asians still make up only a small percentage of the San Marcos area’s population.

Input respondents said that racial dynamics in Greater San Marcos are not necessarily strained, but it is a challenge to engage leaders of the Hispanic community. One respondent said, “There are not a lot of them and they are silent.” There is a reported generation gap between older Hispanic leaders who “busted down the doors” to access greater opportunity and their children who are more “absent.” There used to be a Hispanic chamber of commerce in San Marcos but it disbanded.

Although a majority (72.5 percent) of survey respondents indicated that they consider the Greater San Marcos region a welcoming place, less (52.4 percent) consider the region an inclusive place, a distinction that plays into to what degree new residents and minorities perceive they are able to get involved with community issues and leadership opportunities and the like. An even smaller percentage (49.3 percent) feels that opportunities, communities, and networks in the region are accessible and open to diverse constituencies.

As migration data showed, in-migrants to Greater San Marcos earn on average less than existing residents. Their impact on the region’s average incomes is seen in the following table. Greater San Marcos has the lowest per capita income (PCI) of all the comparison geographies except Brazos County where roughly a quarter of the population are students enrolled at Texas A&M – who typically earn little to no income. The

56.8%

42.6%

54.2% 57.7%

74.3% 71.9%

44.0%

62.6%

3.4%

6.4%

3.9%

10.7%

13.2% 19.1%

11.7%

12.4%

36.7%48.9%

38.9%24.5%

7.0%4.9%

38.4%

17.1%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HaysCounty

CaldwellCounty

GreaterSan

Marcos, TX

BrazosCounty, TX

RutherfordCounty,

TN

YorkCounty, SC

Texas UnitedStates

Other

Asian

Hispanic

Black, NH

White, Not Hispanic



San Marcos area’s rate is roughly $10,000 below both the state and national figures. Even so, recent increases in PCI in Greater San Marcos has been comparatively strong, less than only Brazos County and the state. This would imply that the lower-income in-migrants are being balanced out somewhat by higher earning residents relocating to the region.

PER CAPITA INCOME, 2002-2012

Source: U.S. Bureau of Economic Analysis

A number of public input respondents noted that the lack of a critical mass of higher-income residents is one of the reasons behind a relative lack of higher-end restaurants, retail, and entertainment destinations in Greater San Marcos. And also the reason why a paucity of executive-level housing can be found in the region. This issue will be explored in more depth later in this report.

Lower incomes in a community do not always equate to higher poverty rates. But in the case of Greater San Marcos, the percentage of the population in poverty is consistent with its level of earnings. In 2013, the federal poverty threshold for a family of four with two children was $23,624. As seen in the following chart, Greater San Marcos has a higher total poverty rate than every comparison except Brazos County and the state. The situation is less acute in terms of youth poverty rates. Greater San Marcos’ figure is below Brazos, Texas, and the nation as a whole.

While data show that pockets of Greater San Marcos are experiencing high rates of poverty, this was not a consistent theme of public input feedback. There would seem to be a disconnect between economic conditions and opportunities in Greater San Marcos and their perception among certain stakeholder groups.

2002 2007 20125-Year


Greater San Marcos, TX $23,587 $29,181 $32,784 12.3% 39.0%Hays County $24,479 $30,285 $33,975 12.2% 38.8%Caldwell County $20,726 $24,981 $27,587 10.4% 33.1%

Brazos County, TX $20,743 $26,237 $30,528 16.4% 47.2%Rutherford County, TN $27,028 $31,271 $34,551 10.5% 27.8%York County, SC $27,939 $33,619 $35,649 6.0% 27.6%Texas $29,357 $36,869 $42,638 15.6% 45.2%United States $31,798 $39,804 $43,735 9.9% 37.5%



TOTAL AND YOUTH POVERTY, 2012

Source: Small Area Income and Poverty Estimates

Poverty rates are also increasing faster in Greater San Marcos than every comparison area except the U.S. Total poverty grew 2.6 percent in the San Marcos area from 2007 to 2012 compared to 2.9 percent for the U.S. The region’s rate was notably higher than Texas (1.6 percent) and the next highest comparison county, Rutherford at 1.1 percent. The same held true for increases in youth poverty with Greater San Marcos’ rate increasing 3.9 percent from 2007 to 2012. Only the U.S. was higher at 4.6 percent.

Sub-regional poverty dynamics are even more concerning. As seen from the previous chart, total poverty in Caldwell County was higher than all areas except Brazos County, while its youth rate exceeded all the comparison geographies. Three out of ten Caldwell children are living in poverty. While Hays County does not have an equivalently high youth poverty rate, the percentage of children in poverty grew faster in Hays than every comparison area and was equivalent to the U.S. at 4.6 percent.

In-migration dynamics are exacerbating poverty issues. Over 30 percent of Hays in-migrants live in poverty, while over half (56.4 percent) of Caldwell in-migrants are also below the poverty line.

Though not a pervasive perception, issues of poverty are clearly on the minds of some Greater San Marcos residents. One said, “We have entrenched, generational poverty and it’s a real concern.” Many specifically identified the issue as a key challenge that impacts public education, public safety, and a number of other community dynamics. Because of persistent poverty levels, many input respondents specifically identified the need for higher-paying local jobs as the principal strategic concern for Greater San Marcos.

16.3

%

20.0

%

17.0

%

27.2

%

12.9

%

13.0

%

17.9

%

15.9

%17.7

%

28.5

%

19.8

%

24.6

%

16.7

%

17.2

%

25.8

%

22.6

%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

HaysCounty

CaldwellCounty

GreaterSan

Marcos, TX

BrazosCounty, TX

RutherfordCounty,

TN

YorkCounty, SC

Texas UnitedStates

2012 Total Poverty

2012 Youth Poverty



Though high poverty can be a pernicious influence on the skill level of an area’s workforce as comprised by the percentage of workers with a Bachelor’s degree or higher, this is not the case for Greater San Marcos. Perhaps reflecting the presence of Texas State, the San Marcos area’s percentage of Bachelor’s-plus adults was above all the comparison areas except Brazos County, where the influence of Texas A&M is clearly seen in the nearly one in five adults with a graduate degree. In terms of race and ethnicity, the San Marcos region has a higher proportion of its whites (43.4 percent), Hispanics (14.2 percent), and blacks (24.3 percent) with college and graduate degrees than their national counterparts.

EDUCATIONAL ATTAINMENT, 2010-2012


As with poverty rates, however, sub-regional trends are a cause for alarm for Greater San Marcos leaders. Nearly a quarter of Caldwell County adults have no high school diploma, while almost 34 percent have only attained a high school degree. Thus, nearly 60 percent of Caldwell adults do not have the technical or college training needed for many of today’s highest-value occupations, even at the entry level. In-migration trends again had an influence on sub-regional dynamics. While over 32 percent of Hays in-migrants held a four-year degree or higher, only 13.6 percent of Caldwell in-migrants had completed college training.

Strategies and opportunities to upskill Greater San Marcos residents will thus be important to the region’s future. Adult training capacity includes:

Gary Job Corps: A career and technical training program administered by the U.S. Department of Labor, the Gary Job Corps Center is the largest Job Corps center in the nation. The center sits on

10.4%

24.3%

13.2% 14.5%9.8% 12.6%

18.9%14.1%

20.8%

33.9%

23.5% 22.2% 30.0% 28.0%25.4%

28.3%

25.2%

19.1%

24.0% 20.3%24.1% 20.9%

22.8%21.3%

6.0%

6.1%

6.0%5.3%

7.7% 9.6%6.5%

7.8%

26.6%

11.7%

23.6%

19.6%

20.3% 19.6% 17.6%18.0%

10.9%4.9%

9.7%18.0%

8.1% 9.2% 8.8% 10.7%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

HaysCounty, TX

CaldwellCounty, TX

Greater SanMarcos, TX

BrazosCounty, TX

RutherfordCounty, TN

YorkCounty, SC

Texas UnitedStates

Graduate Degree

Bachelor's Degree

Associate Degree

Some College

HS Diploma

No HS Diploma



775 acres close to the San Marcos Municipal Airport, and it operates the largest GED program in the state of Texas and offers over 20 technical training opportunities.

Workforce Solutions Rural Capital Area: The service area for this community partnership is the nine-county Rural Capital Area and has locations in Caldwell and Hays counties. Services include recruitment and employment services to businesses and self-assessment, job search support, job fairs, and interview counseling to job seekers.

Austin Community College (ACC): ACC is a fast-growing community college that serves eight Central Texas counties, including Hays and Caldwell counties. There is one campus within the Greater San Marcos region—the Hays Campus located in Kyle. To increase access to various classes, ACC has set up centers at local high school sites, including three in the region: the Lockhart Center, the San Marcos Center, which offers Early College Start classes at San Marcos High School but no evening classes, and San Marcos Goodnight Center. The institution has an array of degree programs as well as adult education classes, including English as a Second Language, literacy and civics, and GED preparation. However, adult education classes are available in Travis County only.

An issue that arose during public input sessions is that a large portion of Hays County and nearly all of Caldwell County are excluded from the ACC Tax District, which means that students are unable to attend at reduced in-district tuition rates and are not able to take advantage of some programs and services. Of the six public K-12 school districts in the region, only Hays Consolidated Independent School District (CISD) is within the ACC Tax District. In 2006 and 2010, voters did not support a push to for the San Marcos CISD to be included in the ACC Tax District, which would have increased property taxes to allow students to pay considerably less for classes as well as give voters the right to participate in elections of the ACC Board of Trustees. Many input participants said they would like to see the ACC taxing district issue come up again for a local vote.

Gary Job Corps was a resource that came up often in public input as an example of an underused resource that could be a more impactful workforce development tool if awareness of the center’s services was improved.

The presence of the college-educated and those without high school diplomas are evident in survey responses regarding the strengths and weaknesses of the Greater San Marcos workforce in that the top response to both questions was education-related. In terms of strengths, respondents identified the availability of educated and talented workers, quantity of available workers, and commitment to Greater San Marcos as the top three strengths of the workforce. In terms of weaknesses, however, respondents identified a lack of education and skills, followed by limited job opportunities, and low wages. One respondent noted that “There is a good mix of people with varying education levels to support all levels of work. There are plenty of locals that travel to Austin or San Antonio for work that continue living in SM because it is home but would be much happier if they could make the same or better money and not have to travel.”



While reskilling and upskilling adults is beneficial to the enhancement of workforce competitiveness, there is no substitute for the critical importance of creating a training “pipeline” from cradle-to-career to support the hiring needs of Greater San Marcos employers.

Early childhood education is vital to student success. Research has shown that well-designed Pre-K programs have long-term impacts on student performance, including higher test scores, lower rates of grade repetition and special education, and higher educational attainment.3 This is especially pronounced in lower-income students. The state of Texas is competitive in early education, with 52 percent of four-year-olds enrolled in a Pre-K program, the highest of the states examined.

STATE PRE-K STATISTICS, 2013

Source: National Institute for Early Education Research, National Association for the Education of Young Children

In 2011, the Texas legislature passed a budget that cut public school spending by $5.4 billion, including over $200 million dedicated to the state’s Pre-K Early Start Grant program. In 2013, $30 million was restored, but early-education advocates would like to see the state provide increased access to full-day Pre-K programs. In the 2013-14 academic year, the San Marcos CISD launched its own full-day Pre-K program without increased state support. All Pre-K students are bus eligible and participate in the free breakfast and lunch program.

Public input respondents were excited and complimentary about the San Marcos CISD’s launch of a full-day Pre-K program, calling it potentially transformational. They said it will also serve as a potential attractor to the district for families with small children.

Another resource for parents in the Greater San Marcos region is Texas Parents as Teachers, a program of Mental Health America of Texas available to parents of students enrolled in the San Marcos CISD. Through home visits, group activities, health screenings, and connections to community resources, this program works with parents to promote early childhood development, prevent developmental delays, and increase school readiness of students.

In addition, Texas State University’s Center for P-16 Initiatives recently launched a program called Construyendo La Casa/Building the House to provide outreach to children of Central Texas janitors and custodians in an attempt to help them become college and career ready.

3 Barnett, W. Steven. Preschool Education and Its Lasting Effects: Research and Policy Implications. September 2008. Accessed at http://nieer.org/resources/research/PreschoolLastingEffects.pdf.

Percent of 3-Year Olds Enrolled in Pre-

K, 2013

Percent of 4-Year Olds Enrolled in Pre-

K, 2013State Spending per Child, 2013

Number of Accredited Programs Per 10,000 Children 5

and Under, 2014Texas 6% 52% $3,311 1.5South Carolina 4% 40% $1,300 3.3Tennessee 1% 21% $4,611 2.5



At the K-12 level, trends in Greater San Marcos are mixed. Like nearly every community of size in the United States, the region’s central city school district is experiencing greater challenges than suburban counterparts. As the following table shows, the San Marcos CISD is fairly equivalent to the dynamics of the comparison central city districts. All have percentages of minority enrollment not reflective of overall population compositions, high percentages of students eligible for federal free and reduced lunch programs, and graduate roughly three-quarters to 85 percent of their senior classes.

CENTRAL CITY SCHOOL DISTRICT ENROLLMENT STATISTICS

Source: State departments of education

*Under revision

Other than York County, San Marcos has experienced the slowest rate of enrollment growth; it also has the second lowest student-teacher ratio. Encouragingly, San Marcos CISD’s graduation and dropout rates are very competitive with the comparison districts, even those in Rutherford and York Counties with smaller percentages of lower-income students. Also referred to as “economically disadvantaged,” students who qualify for free or reduced lunch in the 2014-2015 academic year are from families earning 185 percent or less of the federal poverty rate, a maximum of $44,123 for a family of four. Research has shown that at-home dynamics can impact child development, which further impacts the magnitude of need for social services and increased exposure to future college and career opportunities.

The issue of perception versus reality of San Marcos schools was a frequent topic in Vision 2020 public input. Many acknowledged that the San Marcos CISD has challenges to educate a more at-risk student population, but noted that the “general feeling of disdain” they sense from people outside the district is not warranted. There is a misperception that “nothing is going on in the schools,” while in actuality a number of programs are being piloted and launched, including career academies. One respondent said that “demographics are the elephant in the room.” The San Marcos district is largely Hispanic, while those in higher-end unincorporated county and city schools are predominantly white. Respondents said that key issues include:

Ensuring resources keep up with the need for new facilities and programs.

More consistency and increased funding from the state.

Higher teacher pay in outlying districts that causes San Marcos CISD to lose faculty.

Greater San Marcos, TX

Brazos County, TX

Rutherford County, TN York County, SC

Central City School District San Marcos CISD Bryan ISD Murfreesboro Rock Hill SchoolsTotal Enrollment, 2013 7,509 15,624 7,221 17,026Change in Enrollment, 2008-2013 2.4% 6.1% 6.1% -1.9%Percent White, 2013 21.0% 25.8% 55.1% 50.9%Percent Hispanic, 2013 72.1% 52.4% 11.9% 6.9%Percent Economically Disadvantaged, 2013 71.5% 73.2% 52.9% 52.0%Student/ Teacher Ratio, 2013 13.9 15.1 13.7 15.9Graduation Rate, 2012 84.7% 84.3% NA* 77.3%Dropout Rate, 2012 3.8% 3.7% NA* 4.4%



Increasing the availability of STEM education.

The need for improved parental and private-sector involvement in schools and more participation with regional two- and four-year colleges and universities.

Communication issues related to district performance and programs, especially to potential residents interested in San Marcos.

Survey respondents who indicated that they or their children attended public schools in the region in the past 10 years were asked to review several statements describing public school quality. The most favorable responses were for statements regarding opportunities for parental involvement (71.7 percent agreed that there are ample opportunities in public schools), sufficient school hours of operation that meet community needs (67.6 percent), and clean and modern facilities with the latest technology (64.5 percent). At the other end of the spectrum, only 37.3 percent of respondents agreed that “Children in our district receive a high-quality education.” In terms of preparing students for the future, only 38.7 percent agreed that “Schools provide career guidance and hands-on work experiences,” and only 42.9 percent agreed that “Schools provide opportunities for leadership, professional, and technical skills training.”

The Greater San Marcos Partnership Marketing Alliance, a group of marketing and communications professionals from the region, tried to help address the educational perception issue through a program called “Making the Grade! San Marcos,” a grassroots, community-based awareness campaign created to help raise positive awareness about San Marcos CISD programs, awards, achievements, and successes.

When compared to the other five districts in the region, San Marcos CISD has the highest level of disadvantaged students, the highest proportion of Hispanic students, the greatest level of spending per student, and the fewest number of students per teacher.

GREATER SAN MARCOS SCHOOL DISTRICT ENROLLMENT STATISTICS

Source: Texas Education Agency

Although San Marcos CISD had the lowest graduation rate and highest dropout rate of the regional districts, its ACT average composite score was on par with Hays County CISD and higher than Lockhart ISD and Luling ISD. The San Marcos district’s average SAT scores were also higher than the state average and all districts except Dripping Springs ISD and Wimberley ISD. The San Marcos CISD’s performance statistics on State of Texas Assessments of Academic Readiness exams were also relatively competitive.

Total Enrollment,

2013

Percent White,

2013

Percent Hispanic,

2013

Percent Economically

Disadvantaged, 2013

Total Expenditures per Student,

2013

Student/ Teacher

Ratio, 2013Graduation Rate, 2012

Dropout Rate, 2012

Dripping Springs ISD 4,765 74.6% 19.1% 14.2% $7,788 17.6 99.3% 0.1%Hays CISD 16,525 32.0% 61.8% 46.1% $7,815 16 90.2% 1.3%Lockhart ISD 4,958 26.3% 66.2% 69.9% $8,089 15.1 93.2% 1.0%Luling ISD 1,409 30.7% 60.5% 68.6% $7,767 14.1 98.9% 0.2%San Marcos CISD 7,509 21.0% 72.1% 71.5% $8,777 13.9 84.7% 3.8%Wimberley ISD 2,044 76.3% 20.1% 31.8% $8,376 14.6 97.8% 0.3%Texas 5,058,939 30.0% 51.3% 60.4% $8,276 15.5 87.7% 2.4%



GREATER SAN MARCOS SCHOOL DISTRICT PERFORMANCE STATISTICS

Source: Texas Education Agency

Along with ACC, already referenced in this report, the most significant higher educational asset in Greater San Marcos is by far the presence of Texas State University. In addition to its increasing capacity to train students for jobs that require college or graduate degrees and growing opportunities to commercialize research and potentially grow and keep start-up companies in Greater San Marcos, the university provides a platform for economic developers to access visiting faculty, business professionals, and other potential future residents who travel to San Marcos for university-related reasons.

With the University of Texas-Austin enrollment essentially capped, Texas State has emerged to pick up the slack in Central Texas for public four-year higher education. For the last 16 years, Texas State has set a new enrollment record each year. In Fall 2013, enrollment reached 35,568, up 3.9 percent from the previous year and up 58.6 percent from 2000 enrollment levels. Over time, Texas State is attracting higher performing students; nearly half of incoming freshmen in Fall 2013 were in the top 25 percent of their high school graduating class, according to university records. Of these students, a growing number were also in the top ten percent of their class.

An important distinction for a region with a high level of Hispanic residents, Texas State is a Hispanic Serving Institution, a federal designation indicating that at least 25 percent of its full-time undergraduate student population is Hispanic. The Hispanic Outlook in Higher Education ranks the university 14th in the nation for the number of bachelor’s degrees awarded to Hispanic students and 30th in the nation for the number of master’s degrees awarded to Hispanics.

Texas State is also attracting more out-of-state students. In 2013, 2.5 percent of the university’s 19,250 applicants were from another state or country, compared to 1.8 percent of 8,901 applicants in 2003. As a benchmark, in 2013, 11.9 percent of Texas A&M’s applicants were from another state or country. Though Texas State has publically committed to supporting undergraduate success, it is nevertheless seeking to significantly increase its number of graduate and doctoral students. This is especially important for its goal to become a Texas-designated Research University. It was recently named by the state as an “emerging” research university. As Texas State has consistently increased enrollment over the last decade, space to accommodate growth has become limited. To address this issue, over $633 million in construction projects are ongoing and planned for expansions and renovations.

Reading Mathematics ELA Reading I Algebra I ELA Writing IDripping Springs ISD 24.6 1625 96% 97% 93% 94% 81%Hays CISD 19.5 1377 83% 70% 67% 82% 52%Lockhart ISD 18.4 1392 75% 67% 70% 92% 58%Luling ISD 18.6 1415 67% 53% 45% 58% 28%San Marcos CISD 19.5 1426 85% 69% 61% 65% 47%Wimberley ISD 22.3 1536 97% 93% 87% 88% 75%Texas 20.5 1422 83% 76% 69% 78% 55%

STAAR Percent Satisfactory or Above (End of Course Exams), 2012

STAAR Percent Satisfactory or Above

(Grade 8), 2012ACT Avg

Composite, 2012

SAT Average

Total, 2012



As might be expected, Texas State was a popular topic among public input participants. One interviewee said it is the “best and worst thing” about San Marcos. The crux of this dichotomy is the positive impact the university has on the local economy and demographics, but the feeling in some minds that the region is overly reliant on Texas State for its livelihood. Some believe these conflicting elements have created a “town and gown conflict,” and a perceived “ivory tower mentality,” although others said some of those issues are more historical than current.

These perceptions are also evident in survey responses. There is a clear divide between respondents who feel that Texas State University should play a vital role in the continued improvement of the region and those who view Texas State as a barrier to “smart growth.” However, survey respondents were very complimentary of the university when asked to rate its quality. Over 71 percent selected “above average or excellent” in answer to this question.

Chapter Three: Regional Reality: Opportunity and Issues As can be seen in following word picture related to the online survey question, “What is the Greater San Marcos’ region’s greatest threat or challenge to overcome?”, growth and development are on the minds of Greater San Marcos residents, particularly in the City of San Marcos.

ALL RESPONDENTS



However, as with responses related to the region’s “greatest strength,” there is diversion between City of San Marcos perspectives and those outside the city, as the following word cloud shows.

GREATER SAN MARCOS RESIDENTS (CITY OF SAN MARCOS RESPONDENTS REMOVED)

Concerns about the effects of fast-increasing population growth on the region’s built and natural environments, quality of life, cost of living, and other factors are of greater concern as the San Marcos area welcomes thousands of new residents every year. Those who look north and fear that the growth and development impacts affecting Austin could one day head south are especially worried about Greater San Marcos’ capacity to accommodate growth and also the results of this expansion on the qualities that make the community special. Although residents are wary of the negative effects of unplanned growth, many understand that quality development is a goal worth pursuing.

An issue that is becoming more prevalent in the north Austin metro is cost of living. A recent Forbes list of the top places for young professionals ranked the Austin MSA lower because it was becoming increasingly less affordable for recent college graduates and entry-level workers. Development of affordable housing is one of the City of Austin’s highest current priorities. As the following table shows, cost of living is lower in the San Marcos area than elsewhere in the Austin MSA, though differences between Hays and Caldwell Counties are stark. Though still below the national average, Hays County living costs are the highest of all the profiled geographies while Caldwell’s costs are lowest. This differentiation is consistent with other researched indicators showing the considerable variation in trends between Hays and Caldwell. One reason the cost of housing is significantly lower in Caldwell County is that one quarter of its housing stock consists of mobile homes, compared to only ten percent in Hays County and 6.5 percent nationwide. It is also important to note that a closer look reveals that the City of San Marcos, which has a housing cost of living index of 85, has lower housing costs than other portions of Hays County, particularly the western portion including the cities of Dripping Springs and Wimberley.



COST OF LIVING INDEX, 2014

100=National Average

Source: Sperling’s Best Places

Input respondents perspectives are focused on the San Marcos area’s comparative affordability versus the City of Austin and Travis County. The fact that San Marcos (or at least Hays County) is a more expensive place to live than many comparable communities across the country was not identified as a concern by interviewees, focus group participants, or survey respondents. However, the comment that San Marcos was “like Austin, but affordable,” was heard often in input contexts.

Often, as communities grow – especially if high percentages of in-migrants are lower-income and poverty is rising like in Greater San Marcos – issues of crime come to the fore as quality of life concerns. The following table shows that public safety is actually a competitive asset for the City of San Marcos and the broader region. Although San Marcos was the only city examined to see its violent crime rates rise from 2007 to 2012, violent crime in the City of San Marcos is lower than every comparison geography. Property crime in San Marcos is lower than in all comparison geographies except Bryan, Texas and the U.S, despite declining by a far lesser rate than the other profiled geographies. This emphasizes that public safety is currently a plus for the city.

CRIME RATES BY CORE CITY, 2007-2012

Source: Federal Bureau of Investigation

Crime was not mentioned often in public input as a major competitive concern for Greater San Marcos. On a scale from 0 (poor) to 4 (excellent), respondents to the online survey rated their sense

Overall Grocery Health Housing UtilitiesTransport-

ationMiscella-

neousHays County, TX 98 87 101 104 98 98 96Caldwell County, TX 84 87 98 61 97 98 96Brazos County, TX 90 89 96 80 98 100 93Rutherford County, TN 90 95 93 83 86 94 96York County, SC 93 99 94 80 100 98 102Austin MSA, TX 102 86 98 117 96 97 97Texas 90 90 97 81 96 97 95

2007 2012 Change 2007 2012 ChangeCity of San Marcos, TX 34.3 34.6 0.9% 336.9 328.6 -2.5%City of Bryan, TX 88.3 39.8 -55.0% 524.9 315.1 -40.0%City of Murfreesboro, TN 71.8 62.5 -13.0% 434.8 356.9 -17.9%City of Rock Hill, SC 125.9 65.7 -47.8% 460.8 378.3 -17.9%Texas 51.1 40.9 -20.0% 412.1 336.2 -18.4%United States 46.7 38.7 -17.1% 326.4 285.9 -12.4%

Property Crime per 10,000Violent Crime per 10,000



of personal and property safety 3.52, the third highest rating given to 18 aspects of quality of life included in the survey.

Quite probably the single most prominent growth-related community issue in Greater San Marcos is housing. Whether it concerns the lack of quality mid-priced and executive level single family houses, the preponderance of product constructed for the student market, the lack of mixed-use development and alternative models like townhomes and attached condominiums, the infringement of major potential housing developments on natural environments, or any number of externalities, more input respondents wanted to discuss housing than any other topic. The volume of housing construction also often segued into discussions of business climate, pro- versus slow- versus anti-growth sentiments, permitting processes and development controls, and other issues that will be addressed in Chapter Five of this report.

Irrespective of supply – or perhaps because of a dearth of competitive product – housing in Hays County in Greater San Marcos is comparatively high versus the benchmark geographies4. As the following chart shows, the Austin MSA has seen a 17.5 percent increase in the price of single-family homes. Hays County is priced lower than the median home in the Austin Metro ($219,500) but higher than all other comparison geographies. Hays County’s median single-family home price of $185,600 in May 2014 was also higher than the state figure by nearly $50,000.

PRICES OF SINGLE-FAMILY HOMES, JANUARY 2000-MAY 2014

Source: National Association of Realtors

Note: Data for Caldwell County was not available.

Hays County single-family housing is more expensive than the geographies profiled for this report, but that does not mean it is not affordable to local residents. Affordability is measured by computing the ratio of median home price to median household income, which provides insight into how many years of the median income it would take to purchase the median priced home. The lower this ratio, the more affordable

4 Note: home price data for Caldwell County was not available.

$50,000

$70,000

$90,000

$110,000

$130,000

$150,000

$170,000

$190,000

$210,000

$230,000

$250,000

Jan-

00

Nov

-00

Sep-

01

Jul-0

2

May

-03

Mar

-04

Jan-

05

Nov

-05

Sep-

06

Jul-0

7

May

-08

Mar

-09

Jan-

10

Nov

-10

Sep-

11

Jul-1

2

May

-13

Mar

-14

Hays County, TX

Brazos County, TX

Rutherford County, TN

York County, SC

Austin MSA

Texas



homes are to the residents of the community. As the following table shows, Caldwell County homes were the most affordable of all geographies (2.4), which is consistent with cost of living index data as well as inferences from housing stock composition data. Though less affordable than Caldwell, Hays County residents are more readily able to afford homes (3.0) than Brazos County and the nation, are relatively equivalent to Rutherford and York counties, and are less affordable than the state.

HOUSING AFFORDABILITY, 2000-2012


Another way to measure housing affordability is to examine how much an average household spends on rent. The U.S. Department of Housing and Urban Development has determined that families spending over 30 percent of income on housing are cost burdened and may have trouble being able to pay for other necessities. Within these parameters, rent is unaffordable and becoming more so for Greater San Marcos residents in that 64.4 percent of Greater San Marcos renters spend 30 percent or more of their income on rent. This percentage is higher in Hays County (66.8 percent) than Caldwell (52.4 percent), which is more equivalent to the national average.

PERCENTAGE OF INCOME SPENT ON RENT, 2000-2012


The presence of major state universities could again be skewing these data slightly. With little to no income and almost always looking to rent (if not in dormitory housing), college students will be more financially burdened by rental affordability than other constituent groups. Thus, rental affordability ratios in Hays (Texas State) and Brazos (Texas A&M) are likely lower for the non-student population.

2000 2007 2012Hays County, TX 2.6 3.1 3.0Caldwell County, TX 1.9 2.3 2.4Brazos County, TX 3.0 3.5 4.1Rutherford County, TN 2.4 2.9 2.9York County, SC 2.4 2.9 3.1Texas 1.9 2.5 2.5United States 2.7 3.6 3.4

2000 2007 2012Greater San Marcos, TX 47.6% 55.0% 64.4%

Hays County, TX 51.6% 56.5% 66.8%Caldwell County, TX 32.5% 48.4% 52.4%

Brazos County, TX 60.7% 61.0% 66.5%Rutherford County, TN 42.9% 49.1% 51.9%York County, SC 35.2% 46.9% 49.3%Texas 37.3% 48.4% 49.5%United States 39.9% 49.4% 52.8%



Survey respondents, on a scale from 0 (poor) to 4 (excellent), rated housing affordability 2.93 and diversity of housing options 2.45, very low when compared to other quality of life aspects. While public officials say that there has never been more housing constructed in the City of San Marcos in its history, with even more product in the pipeline, other input participants talked about challenges to find acceptable mid-priced and executive-level housing. Most agree that progress has certainly been made with regard to permitted executive housing, but housing developments in the pipeline can in some instances take months or years to become available for occupancy, which does not address short-term housing needs. Constructed executive housing is still a pressing issue in the region, particularly in the City of San Marcos. Issues are less acute outside of the City of San Marcos, especially in the fast growing cities of Kyle and Buda and unincorporated Hays and Caldwell Counties. Some interviewees told of searching ten or more months for a mid-priced home in the City of San Marcos before either finding a good fit, giving up, or building their own home in the city. A number of input participants said that a percentage of New Braunfels’ (in the San Antonio MSA) population growth can be attributed to their more competitive supply of new single-family homes at multiple price points.

The majority of survey respondents and interview and focus group participants said that the local market caters to college students, with new student-friendly complexes proliferating along with single-family homes purchased as rentals for students, either by their parents or institutional investors. Opinions on the latter trend vary. Developers say that investment follows the “path of least resistance,” and that student housing is more readily funded than other types in San Marcos.

One major point of concern in Greater San Marcos’ broader region, the Austin MSA, is traffic congestion. According to the Urban Mobility Report published by the Texas A&M Transportation Institute, the Austin MSA’s Travel Time Index, which measures congestion, is fourth highest in the nation, with metro commuters experiencing an average of 44 hours of delay per year.

As could be expected with Travis County still the major employment hub in Central Texas, commuters in the counties outside of Travis experience longer commutes. As the following chart shows, a higher percentage of Greater San Marcos residents travel 30 minutes or more to work (44.9 percent) than the average metro Austin resident (34.8 percent). However, as the San Marcos region becomes more of a jobs center, the percentage of workers who commute between 30 and 60 minutes to work is decreasing, while the percentage with 15 to 29 minute commutes is increasing.

Interestingly, however, the percentage of commuters with drives to work from 60 to 89 minutes has gone up notably from 2000 to 2012.



CHANGE IN TRAVEL TIME TO WORK, 2000-2012


CHANGE IN MEANS OF TRANSPORTATION TO WORK, 2000-2012


28.8% 25.2% 28.1% 29.6% 28.6% 25.9% 24.5% 24.3%

27.5% 27.9% 19.6% 20.7% 25.8% 26.7%38.6% 39.1%

34.3% 34.3% 38.4% 33.1%35.2% 34.1%

30.8% 30.3%

7.1% 10.2% 10.5% 14.1% 7.9% 10.8%4.3% 4.5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2008

-201

2

2000

2008

-201

2

2000

2008

-201

2

2000

2008

-201

2

Hays County, TX Caldwell County, TX Greater San Marcos,TX

Austin MSA, TX

90+ minutes

60-89 minutes

30-59 minutes

15-29 minutes

0-14 minutes

76.5% 77.1% 74.7% 74.3% 76.1% 76.6% 76.5% 75.0%

14.2% 12.5% 20.0% 18.6% 15.4% 13.5% 13.7% 11.3%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000

2008

-201

2

2000

2008

-201

2

2000

2008

-201

2

2000

2008

-201

2

Hays County, TX Caldwell County, TX Greater San Marcos,TX

Austin MSA, TX

Other

Telecommute

Public transit

Carpooled

Drove alone



As seen in the preceding chart, Greater San Marcos has a slightly higher percentage of commuters drive to work alone than metro Austin. This is also consistent with a region that has yet to develop a critical mass of local jobs.

Increases in transit usage have been marginal. That could change with the potential construction of the Lone Star Rail network. As seen in the image to the right, the corridor parallels Interstate-35 on Union Pacific right-of-way. For over a decade, studies have looked at the feasibility of this project, with Texas voters giving their approval to jump start rail relocation and improvements. Currently, Lone Star Rail and Union Pacific are working with the state of Texas to study ways to meet the region’s future needs for both freight and passenger rail. Proposed Greater San Marcos stations would be located in between Buda and Kyle and in San Marcos. The City of San Marcos has already purchased land in anticipation of future station construction for Lone Star Rail.

Interview and focus group participants mentioned traffic congestion often, but usually in the conditional sense of it being a threat if growth continues unabated. They cited Austin-Travis County and its I-35 chokepoint often as examples of a future they do not want to experience. This concern also affects business climate and development approval issues that will be discussed later in this report. But, by and large, respondents said that Greater San Marcos comparative lack of traffic congestion is a competitive advantage, principally in comparison to the City of Austin and its immediate environs.

Traffic congestion was rated 2.55 on a scale of 0 (poor) to 4 (excellent) by survey respondents, among the lowest of ratings of quality of life amenities in the region. Comments related to improving traffic conditions included increasing local job opportunities to reduce commuting, adding bike lanes, and public transportation options.

While I-35 is the principal highway through Greater San Marcos, two transportation construction projects are said to have great potential impacts on mobility and economic development. The conversion of a key stretch of State Highway (SH) 130 to a limited access toll road with top speeds up to 85 miles per hour – the highest limit in the country – was designed to allow drivers travelling between San Antonio and Austin to avoid I-35 congestion. The 41-mile southern portion of SH 130 from Austin to Seguin was developed through a public-private partnership between Texas and the SH 130 Concession Company,

which was contracted to build and operate the toll road for 50 years in exchange for a portion of the toll revenue. The highway segment opened in October 2012. However, projections for traffic and toll revenue proved overly optimistic and the Concession Company is reportedly at risk of debt default. The Moody’s



investor service downgraded $1.1 billion of debt on the project to junk status. The company is working with its lenders to restructure its debt based on a new traffic and revenue study.5

Local public and economic development officials remain bullish that SH 130 will attract development to Greater San Marcos. Hundreds of homes have already been developed along the roadway they say, and development controls and infrastructure is in place to support significant growth.

The other potentially catalytic transportation project is the expansion of FM 110, a project previously known as “the Loop.” First designated in 1986, FM 110 will run 11.25 miles along the eastern edge of San Marcos and Hays County, eventually connecting to I-35 in south San Marcos. A recent update to the San Marcos City Council noted that the three remaining portions of FM 110 could soon be put out to bid. The project is expected to be completed by late 2015 or early 2016.

Most promising for public officials is FM 110’s potential impact on the San Marcos Municipal Airport. Designated as a preferred growth corridor, city and county officials are exploring how to provide improved water, wastewater, and communications infrastructure to the roadway alignment.

One potential barrier to effectively preparing Greater San Marcos and all of Central Texas to manage growth in a coordinated way is the historic lack of centralized planning in the region.

Though a number of public input respondents praised the Capital Area Metropolitan Planning Organization (CAMPO) as an organization that seeks to work in the best interest of Central Texas growth and development, others said that CAMPO is hamstrung by Texas’ home-rule policies that make it difficult to plan and execute policies regionally. The City of San Marcos has developed its own comprehensive planning guide called Vision San Marcos. While the plan was generally praised by input participants, some said that the perspectives of the broader San Marcos region were not sought or integrated into the final document. Vision San Marcos seeks to direct growth to infrastructure-supported corridors and activity centers that will enable the city to grow sustainably, protect natural environments while facilitating new development, and provide multi-modal mobility options for residents and businesses.

Beyond transportation construction, the City of San Marcos is investing hundreds of millions of dollars in new sidewalk construction and water and wastewater upgrades. While the city has a secure supply of water, officials acknowledge that they have to pursue more flexible sources of water to accommodate future growth and development. Thus, the question of how sustainable water systems will be developed and maintained in Greater San Marcos is a major concern for many public and private officials. City of Lockhart leaders are concerned that they do not have wastewater capacity in their downtown.

While certain that its infrastructure must be enhanced to support growth and development, Greater San Marcos is well served for passenger air service. The region is in close proximity to two major international

5 Batheja, Aman. “Report: Toll Road Company in Danger of Default. The Texas Tribune, June 19, 2014



airports: Austin-Bergstrom International, with over 40 nonstop destinations, and San Antonio International, with over 30 nonstop destinations. It is this access that compensates for the fact that Austin and San Antonio both trail Charlotte (US Airways’ principal hub) and Nashville in departing passengers. San Antonio leads the pack in freight cargo tonnage, and Austin trails all comparison airports except Nashville International.

AIRPORT STATISTICS, 2014

Source: U.S. Bureau of Transportation Statistics

The San Marcos Municipal Airport is a 1,350 acre public-use, general aviation facility that was deeded to the City of San Marcos in 1965 after serving as part of Gary Air Field. It serves as the primary diversion airport for San Antonio and Austin-Bergstrom International. The San Marcos airfield features three asphalt runways, each over a mile in length. It is popular with pilots because runway alignments virtually eliminate crosswind operations. It also has an Instrument Landing System (ILS) and recently dedicated a new terminal radar display (TRD) in the control tower that is anticipated to make flying safer in Central Texas. In October 2010, the City of San Marcos selected Texas Aviation Partners to manage the maintenance, administration, business recruitment, and development of the airport.

On site at San Marcos Municipal is a unique facility branded the Redbird Skyport, a self-proclaimed “aviation laboratory” that takes the form of a working fixed-base operator (FBO), events center, and flight-training operation. Redbird is looking to develop innovative solutions to the issues facing the aviation industry and identify commercial applications for them.

A Strategic Plan for San Marcos Municipal Airport is in the final stages of completion. Both public and private officials have high hopes for the airport as a catalyst for economic development. A potential vision for the facility is as a research-and-development site that might open up possibilities for partnerships with Texas State and other entities.

Of all the infrastructure in Greater San Marcos, it is the environmental assets that the community cherishes most, especially the San Marcos River. The river is a popular year-round destination for swimming, snorkeling, scuba diving, boating, tubing, canoeing, and kayaking. The San Marcos River Foundation was chartered in 1985 to preserve public access to the river and protect its flow, water quality, watershed, and estuaries.

The river is also a research asset and protected area. It is home to Texas State’s Meadows Center for Water and the Environment, which has research projects programs dedicated to the sustainability and health of ecosystems.. The upper San Marcos River is one of the most biologically diverse aquatic ecosystems known

Airport

Departing Passengers

(ths.)1-Year

Change Rank

Freight Cargo Capacity

(mils.)1-Year

Change RankAustin-Bergstrom International 4,959 6.99% 34 159 -1.15% 52San Antonio International 3,732 -0.98% 44 261 -0.54% 29

Brazos County, TX Easterwood Field 84 17.79% 235 250 16.20% 409Rutherford County, TX Nashville International 5,094 5.59% 33 86 7.14% 76York County, SC Charlotte Douglas International 19,772 4.58% 6 222 4.46% 35

Greater San Marcos, TX



in the southwestern part of the nation. The U.S. Fish & Wildlife Department and Texas Parks and Wildlife have designated the San Marcos Springs and Spring Lake critical habitat because of the number of endemic species that are isolated to the upper 4.5 miles of the river, including eight species listed as endangered or threatened. Much of the San Marcos River is protected via the Edwards Aquifer Habitat Conservation Plan due to the wildlife that reside there and the usage of the river. The Edwards Aquifer is known as one of the most prolific artesian aquifers in the world and serves nearly two million users in south central Texas. Because the demand for water is now greater than the aquifer’s capacity, experts are working diligently to develop solutions to managing this major natural resource.

Most input respondents consider the San Marcos River the city’s crown jewel6. As such, many are extremely passionate about protecting the waterway from encroachment of development or other perceived incompatible uses. Fights over river protection and preservation of its recharge zone have led to construction projects being voted down or scrapped, and continue to incite great passion from both the preservation and development communities. Many public officials would like to see access to the river from downtown San Marcos improved so that it becomes an even more dynamic amenity.

While the San Marcos River is the most well-known in the region, there are many other environmental assets in Hays and Caldwell counties. The Blanco River runs through Wimberley and other parts of Hays County and provides recreational opportunities such as canoeing and kayaking. Jacob’s Well Natural Area is an artesian spring located north of Wimberley and is considered the gem of the Texas Hill Country. Jacob’s Well features limestone caves and is part of one of the longest underwater cave systems in the state.

The City of San Marcos is also focused on enhancing the community’s capacity of bicycle and pedestrian infrastructure through development of new lanes, the passage of a Complete Streets policy, and a focus on improving citywide walkability through zoning code revisions.

Adjacent to the San Marcos River, downtown San Marcos is the region’s principal activity center. Abutting Texas State University, it is also the home of multiple bars, restaurants, clubs, and other student-serving retail. Main Street San Marcos oversees the district through its mission to preserve, protect, and promote the downtown through a four-point approach of: 1) organization, 2) design, 3) promotion, and 4) economic restructuring (strengthening assets and expanding economic base). The City of San Marcos has invested millions in downtown improvements, including wider sidewalks, new lights, and two-way streets. A Downtown Smart Code was passed to ensure development is context-sensitive, especially around proposed Lone Star Rail stations where the city has purchased land in anticipation of future transit service. There is also a TIRZ in place to facilitate the construction of development-supportive infrastructure. One persistent downtown issue is parking. Aside from structured parking, all spaces in downtown are free. This leads to shortages of spaces as cars stay parked for hours at a time. Cars also encroach on residential neighborhoods as no special permits are required for parking there. The city installed parking meters a number of years ago but they were removed due to public and retailer outcry. 6 Note: City of San Marcos residents comprised the majority of survey respondents, which affected survey results. Additional perspective on this issue is included in the separate Appendix to this report.



While development in downtown San Marcos has largely been focused on student apartments, city officials and private leaders alike feel that the district is ripe for additional investment, including hotels, townhouses and other attached residential, higher-end restaurants and retail, and even a new City Hall, which many feel makes sense to be located downtown. Some officials also support the creation of a PID (Public Improvement District) in the downtown to spur new development.

The region is home to several other notable downtown districts. The Downtown Buda Historic District, the Dripping Springs Downtown Historic District, and the Caldwell County Courthouse Historic District in Lockhart are all on the National Register of Historic Places and are investing in improvements to enhance their quality of place for residents and visitors. The City of Buda is currently developing a Downtown Master Plan that will make the downtown area more walkable and provide a mix of live, work, and play options. The Mercer Street Improvement Project is underway in downtown Dripping Springs and encompasses many planned improvements, including sidewalks, a pedestrian bridge, various tools for pedestrian safety, and historic district monument signs. The City of Lockhart received a $13.4 million grant to widen segments of the downtown corridor and to add pedestrian facilities in 2013. Future additions will include a downtown park, an entertainment area, and renovations to Courthouse Square.

Chapter Four: The Changing Employment Base If Greater San Marcos is to grow sustainably, its regional economy must be diverse and supportive of residential growth through the provision of quality jobs for existing and future workers. It must offer employment opportunities at various skill levels that feature wages sufficient to build local wealth. This can be accomplished through implementation of a holistic and targeted economic development program.

Another of the most common themes of Vision 2020 public input was the need for better, higher paying, and more diverse jobs in Greater San Marcos. Many local leaders feel that improved economic performance in this regard will address many competitive challenges like better demonstrating a market for higher end retail, restaurants, and housing, providing good entry level opportunities to retain Texas State graduates and attract expatriates back to the community, raising more tax dollars to compensate for institutional property taken off the tax rolls, providing resources to support development of new infrastructure and public services, and improving Greater San Marcos’ standing and perception in the broader Austin MSA.

Survey respondents who identified themselves as business executives were asked to evaluate various aspects of the region’s business climate. These business leaders identified labor costs, the state and local tax climates, and availability of qualified employees as top strengths in Greater San Marcos. Availability and affordability of Class-A office space, broadband infrastructure, and road infrastructure were identified as the region’s weaknesses. Several respondents also mentioned that the development review process in the City of San Marcos needs to be updated to provide more flexibility and to capture projects within more targeted criteria.

The rest of this chapter examines the diversity of the Greater San Marcos economy and its recent performance during periods of national recession and strong regional population growth.



The Great Recession was a turning point for communities across the nation. Between 2007 and 2009, the United States lost 4.6 percent of its jobs. Texas communities were not as adversely affected by the recession as the nation as a whole. The state experienced 0.5 percent employment loss, while the Austin MSA experienced 0.6 percent employment loss. The Greater San Marcos region actually experienced a 0.6 percent gain over the two-year period, buffered from the economic downturn by its strong base in university, retail, and accommodation and food service jobs. Since the recession, the region has added 8,403 jobs between 2009 and 2013, a gain of 13.3 percent, outpacing not only the comparison counties, state, and nation, but also outpacing the Austin metro (11.2 percent).

PRE- AND POST-RECESSION EMPLOYMENT

Source: Economic Modeling Specialists, Intl.

Greater San Marcos’ unemployment rates further support that the region was shielded from the drastic effects of the Great Recession. In January 2001, only 3.6 percent of the region’s labor force was unemployed, a lower percentage than all comparison geographies and only slightly higher than that of the Austin MSA (3.2 percent). By June 2009, the regional unemployment rate had increased to 7.5 percent, greater than only Brazos County (6.5 percent) and the Austin MSA (7.4 percent). In April 2014, the region’s unemployment rate, only 3.8 percent, is on par with the Austin metro and is lower than all comparison geographies except Brazos County (3.4 percent).

UNEMPLOYMENT THROUGH THE RECESSION

Source: U.S. Bureau of Labor Statistics

2001 2007 2009 2013Before

RecessionDuring

RecessionSince

Recession

Greater San Marcos, TX 48,763 62,820 63,200 71,603 28.8% 0.6% 13.3%

Hays County, TX 41,105 54,722 54,995 62,109 33.1% 0.5% 12.9%

Caldwell County, TX 7,657 8,098 8,205 9,494 5.8% 1.3% 15.7%

Brazos County, TX 82,284 92,650 96,087 100,018 12.6% 3.7% 4.1%

Rutherford County, TN 86,093 112,560 106,911 119,479 30.7% -5.0% 11.8%

York County, SC 67,511 82,950 82,592 86,848 22.9% -0.4% 5.2%

Austin MSA 729,838 840,523 835,833 929,439 15.2% -0.6% 11.2%

Texas 10,491,823 11,628,632 11,565,411 12,359,874 10.8% -0.5% 6.9%

United States 145,023,482 152,671,450 145,623,465 149,927,264 5.3% -4.6% 3.0%

Jan-01 Dec-07 Jun-09 Apr-14During

RecessionSince

RecessionGreater San Marcos, TX 3.6% 3.8% 7.5% 3.8% 3.6% -3.7%Brazos County, TX 3.7% 3.4% 6.5% 3.4% 3.1% -3.1%Rutherford County, TN 3.7% 4.3% 11.2% 4.4% 6.9% -6.8%York County, SC 4.7% 5.2% 14.8% 5.9% 9.6% -8.9%Austin MSA 3.2% 3.7% 7.4% 3.8% 3.6% -3.5%Texas 4.5% 4.3% 8.1% 4.7% 3.8% -3.4%United States 4.7% 4.8% 9.7% 5.9% 4.9% -3.8%



Interestingly, the Greater San Marcos region has a smaller percentage of adults who are working or actively looking for employment (71.9 percent) than Rutherford County (75.6 percent), the state (73.4 percent), and the nation (73.1 percent). This is partially due to the region’s student population. It could also be a factor of the region’s higher than average poverty rates as individuals who have experienced long term joblessness often take themselves out of the workforce. In fact, recent labor force participation declines are consistent with rising poverty rates and the in-migration of large numbers of low-income residents. Adult retraining opportunities referenced in Chapter Two can serve to reengage many adults in the workforce and develop new sources of local wealth-creation.

LABOR FORCE PARTICIPATION RATE, ADULTS 18-69, 2008-2013

Source: U.S. Bureau of Labor Statistics, LAUS

Earlier per capita income comparisons revealed that Greater San Marcos’ figure lags all comparison geographies except Brazos County. Because wages are a major component of per capita income, it is logical that the region also trails in average annual wages. In 2013, the region’s average annual wage was $34,869, lower than all comparison geographies, including Brazos County. Greater San Marcos lags the Austin MSA by over $17,000. Ten-year wage growth (34.6 percent) lagged that of Brazos County, the state, and the nation but surpassed that of Rutherford County and York County. Further examination of wages will accompany economic structure data in the next section.

AVERAGE ANNUAL WAGES, 2003-2013

Source: U.S. Bureau of Labor Statistics, QCEW

2008 2013 ChangeGreater San Marcos, TX 74.4% 71.9% -2.5%

Hays County, TX 76.7% 73.4% -3.3%Caldwell County, TX 64.9% 64.9% 0.0%

Brazos County, TX 73.4% 68.7% -4.7%Rutherford County, TN 81.6% 75.6% -6.0%York County, SC 76.5% 70.8% -5.7%Texas 74.9% 73.4% -1.4%United States 77.0% 73.1% -3.9%

2003 2008 20135-Year


Greater San Marcos, TX $25,914 $31,711 $34,869 10.0% 34.6%Hays County $26,221 $32,238 $34,691 7.6% 32.3%Caldwell County $24,161 $28,122 $36,094 28.3% 49.4%

Brazos County, TX $26,942 $33,876 $36,948 9.1% 37.1%Rutherford County, TN $34,658 $41,193 $42,941 4.2% 23.9%York County, SC $30,655 $35,876 $39,115 9.0% 27.6%Austin MSA $40,741 $47,355 $51,998 9.8% 27.6%Texas $36,968 $45,939 $51,187 11.4% 38.5%United States $37,765 $45,563 $49,804 9.3% 31.9%



These data support local leaders’ assertions that lower-paying employment is a prevalent concern in Greater San Marcos that affects a number of other competitive factors. The call for greater economic diversity with higher-paying knowledge and technology jobs was thus a frequently reference strategic need for the community.

An examination of Greater San Marcos’ economic structure offers perspective on the sectors that are driving the recent and current regional economy. Not surprisingly, Greater San Marcos’ largest business sectors are government, which includes Texas State University and San Marcos Consolidated Independent School District; retail trade, including San Marcos Premium Outlets and Tanger Outlets; accommodation and food services; and health care and social assistance, which includes Central Texas Medical Center.

MAJOR EMPLOYERS

Source: Greater San Marcos Partnership

Company Employees CityTexas State University 3,201 San MarcosHays CISD 2,200 KyleSan Marcos Premium Outlets 1,600 San MarcosTanger Outlets 1,540 San MarcosSan Marcos CISD 1,200 San MarcosHays County 732 San MarcosCentral Texas Medical Center 700 San MarcosHEB Distribution Center 680 San MarcosC-FAN 650 San MarcosLockhart ISD 646 LockhartSeton Medical Center Hays 582 KyleCity Of San Marcos 567 San MarcosDripping Springs ISD 552 Dripping SpringsHEB Retail Stores 510 San MarcosGary Job Corps 500 San MarcosEnergy Transfer Partners/Sac N Pac 500 San MarcosTeleNetwork Partners 450 San MarcosThermon Manufacturing 415 San MarcosWalmart Supercenter 372 San MarcosPhilips 369 San MarcosGrande Communications 300 San MarcosUS Foods 300 BudaWimberley ISD 290 WimberleySeton Edgar B. Davis Hospital 282 LulingSerta Dormae Manufacturing 280 LockhartCabela's 265 BudaCommunity Action, Inc. 260 San MarcosWalmart Supercenter 248 BudaCaldwell County 240 Lockhart



Per the following table, of Greater San Marcos’ top employment sectors only government experienced job losses during the recessionary period (-0.2 percent); health care and retail trade jobs increased by six percent and accommodation and food services jobs increased by 9.5 percent. Since the recession’s end, all of these business sectors have contributed to the region’s competitive employment growth. It is important to note, though, that two sectors, government and health care, offer average annual wages above the regional average of $32,990. The others, retail trade and accommodation and food services, are heavily comprised of part-time and presumably student employment and provide an average annual wage much lower than the regional average.

EMPLOYMENT AND WAGES BY NAICS CODE, 2013

Source: Economic Modeling Specialists, Intl.

The above data show that there is a dearth of employment in higher-wage knowledge-driven business sectors. Combined, management of companies and enterprises, information, finance and insurance, and professional, scientific, and technical services make up only 7.6 percent of jobs in Greater San Marcos, compared to 16.3 percent in the Austin MSA. During the recession, all of these sectors except management of companies and enterprises experienced jobs losses. Since the end of the recession, trends have reversed, with management of companies and enterprises shedding jobs and information (-6.7 percent), finance and insurance, and professional, scientific, and technical services gaining jobs at rates ranging from 12.2 percent to 18.5 percent. Continued growth in these sectors, along with higher-paying skills-focused sectors, will have a positive effect on the region’s average wages.

Wholesale trade, manufacturing, and transportation and warehousing, which make up 11.5 percent of jobs in Greater San Marcos, provide job opportunities and career advancement possibilities for workers who

NAICS Code Description Employment

Percent of Total

Location Quotient

Change, 2007-2009

Change, 2009-2013

Total, Across All Sectors 71,603 0.6% 13.3% $32,990 68.2%

90 Government 14,329 20.0% 1.24 -0.2% 3.0% $38,660 74.8%44 Retail Trade 12,707 17.7% 1.70 5.9% 17.3% $23,082 81.0%72 Accommodation and Food Services 8,133 11.4% 1.39 9.5% 22.9% $15,826 85.1%62 Health Care and Social Assistance 6,855 9.6% 0.78 6.0% 13.6% $37,971 84.2%23 Construction 5,520 7.7% 1.50 -11.2% 10.8% $34,970 72.7%31 Manufacturing 4,698 6.6% 0.81 -7.5% 8.3% $49,131 79.8%81 Other Services (except Public Administration) 3,693 5.2% 1.05 7.6% 6.7% $23,328 89.1%54 Professional, Scientific, and Technical Services 2,769 3.9% 0.62 -3.2% 14.8% $43,442 53.7%56 Admin/Support & Waste Mgmt & Remediation Svcs 2,440 3.4% 0.56 -0.7% 26.7% $26,191 75.7%48 Transportation and Warehousing 1,824 2.5% 0.79 -0.4% 29.6% $41,826 85.8%42 Wholesale Trade 1,704 2.4% 0.61 3.0% 29.6% $51,924 74.7%52 Finance and Insurance 1,593 2.2% 0.54 -2.4% 18.5% $47,191 51.8%61 Educational Services (Private) 1,204 1.7% 0.67 5.5% 68.4% $29,642 79.4%53 Real Estate and Rental and Leasing 1,196 1.7% 1.02 2.0% 4.7% $36,101 76.8%51 Information 793 1.1% 0.59 -21.5% 12.2% $47,703 57.4%71 Arts, Entertainment, and Recreation 581 0.8% 0.50 -9.8% -13.3% $20,411 61.7%11 Agriculture, Forestry, Fishing and Hunting 544 0.8% 0.61 6.6% 24.8% $25,805 88.4%21 Mining, Quarrying, and Oil and Gas Extraction 513 0.7% 1.30 -23.0% 27.6% $46,465 46.6%55 Management of Companies and Enterprises 279 0.4% 0.28 16.8% -6.7% $62,186 55.6%22 Utilities 210 0.3% 0.80 0.4% -7.5% $71,902 73.6%99 Unclassified Industry 18 0.03% 0.19 -40.54% -18.18% $34,846 66.2%

2014 Avg Annual Wages

Percent of National Earnings

Employment, 2013



may not have completed college. Over the two years of the recession, manufacturing (-7.5 percent) and transportation and warehousing (-0.4 percent) lost jobs, while wholesale trade experienced employment gains of 3.0 percent. From 2009 to 2013, these three sectors have all added jobs, though manufacturing at a slower pace (8.3 percent) than wholesale trade (29.6 percent) and transportation and warehousing (29.6 percent). This job growth stems from both expansions of existing employers and relocating firms. Thermon, a heat tracing product manufacturer headquartered in San Marcos, opened a new manufacturing building in 2012., while CMI Moulding, a picture frame supplier headquartered in Burtonsville, Maryland, opened a facility in San Marcos in 2013.

As in the economy as a whole, low comparative wages at the sub-sector level are a concern for Greater San Marcos’ economic vibrancy. Every two-digit level business sector in the region provided average earnings that were significantly lower than the national average.

Because of the geographic location of Greater San Marcos, it is important to understand certain dynamics of both the Austin MSA and the San Antonio MSA.

In general, public input participants feel that the perception of Greater San Marcos – and the City of San Marcos in particular – among those in San Antonio and Austin is not a positive one.

As the following word picture shows, when asked on the Vision 2020 online survey what they think most differentiates Greater San Marcos from the City of Austin and Travis County, respondents most frequently referenced words related to its community and small town feel.

The following table provides location quotients for sub-sectors in the Greater San Marcos, Austin, and San Antonio regional economies. Data show that government, which includes local government, public colleges and universities, and public K-12 school districts, is the largest business sector in terms of employment in all three geographies. Austin has a higher concentration of jobs in lucrative wholesale trade, information,



and professional, scientific, and technical services sectors than its counterparts, while San Antonio has higher concentrations of finance and insurance and management of companies and enterprises jobs.

Greater San Marcos currently has a higher concentration of jobs in retail trade, accommodation and food services, manufacturing, construction, utilities, transportation and warehousing, and mining, sectors that generally do not require college training and provide opportunities that span various skill levels. While this should be maintained, the region must also focus on growing higher-wage knowledge and technology-intensive employment.

LOCATION QUOTIENT BY GEOGRAPHY, 2013

Source: Economic Modeling Specialists Intl.

Examining industry concentrations for the Austin and San Antonio MSAs is also important because there may be opportunities for Greater San Marcos to capitalize on economic strengths to its north and south through targeted programming, marketing, and talent development. These issues will be examined in greater detail in Greater San Marcos’ Target Business Analysis report that will follow the Competitive Assessment in the Vision 2020 process.

NAICS Code Description

Austin MSA

Total, Across All Sectors

44 Retail Trade 1.70 0.98 0.9923 Construction 1.50 1.14 1.1872 Accommodation and Food Services 1.39 1.17 1.2521 Mining, Quarrying, and Oil and Gas Extraction 1.30 0.76 0.9890 Government 1.24 1.16 1.2181 Other Services (except Public Administration) 1.05 1.07 1.0353 Real Estate and Rental and Leasing 1.02 1.23 1.0731 Manufacturing 0.81 0.70 0.5722 Utilities 0.80 0.47 0.2648 Transportation and Warehousing 0.79 0.47 0.7362 Health Care and Social Assistance 0.78 0.76 0.9861 Educational Services (Private) 0.67 0.79 0.7854 Professional, Scientific, and Technical Services 0.62 1.45 0.8111 Agriculture, Forestry, Fishing and Hunting 0.61 0.15 0.3142 Wholesale Trade 0.61 1.26 0.7851 Information 0.59 1.38 1.1056 Admin/Support & Waste Mgmt & Remediation Svcs 0.56 1.04 1.0452 Finance and Insurance 0.54 1.00 1.5071 Arts, Entertainment, and Recreation 0.50 0.91 0.9355 Management of Companies and Enterprises 0.28 0.40 0.6899 Unclassified Industry 0.19 0.31 0.21

Greater San

Marcos

San Antonio

MSA



Chapter Five: Positioning for a Positive Future To this point in the report we have discussed key economic, demographic, and community issues and opportunities in Greater San Marcos, both overall and in relation to its growth trajectory. One of the most important findings was the need for greater economic diversification into higher-paying knowledge and technology jobs. We have also found that the region is constrained to a certain degree in this pursuit by persistent issues of poverty, perception, planning, and an education and training pipeline that must better align internally and with business. Chapter Five will look at the systems and environments that support quality economic development as well as the opportunities and capacity to seed and scale new enterprises.

By far the most pervasive topic in Vision 2020 input was the business climate in Greater San Marcos. Again, this feedback most prominently featured the City of San Marcos. In the context of this report, business climate is inclusive not only of systems such as permitting and regulations, but also the attitudes of those individuals whose decisions influence the tenor, scale, and intensity of development in the city and region. The differences between private sector attitudes and those of certain public officials are often different in terms of these issues. One city official said that San Marcos is more “politically dynamic” than any place they have ever seen, with conflicts between development and environmental forces, multi- and single-family construction, growth and no-growth, and other factions often coming to the fore publically.

Even public officials note that the City of San Marcos has historically been a difficult place to develop, but that efforts are being made to improve the regulatory process and permit turn-around time. A comprehensive review of the City of San Marcos’ development code has just been initiated. Some developers agree that city systems are improving, but said the situation often depends on development type. Some feel the City of San Marcos is getting a reputation in the region as being “anti-development.”

One issue that is said to impede communications between public and private constituents and even between elected officials and city staff in San Marcos is the so called “walking quorum” rule. A walking quorum is essentially a series of meetings or gathering among separate groups of a governmental body, each less than the quorum size, who agree tacitly or explicitly to act uniformly in sufficient number as to reach a quorum – in other words, individual or small-group meetings that may lead to a binding decision. Because of the way sunshine (open meeting) laws are interpreted in San Marcos, a walking quorum extends even down to one-on-one meetings between elected officials and city staff regarding key issues up for vote. Private sector representatives say that the walking quorum provision prevents them from relationship-building with public officials and reaching consensus on issues outside the public eye. This increases the pressure on public meetings and raises the potential for misunderstanding and division. Market Street has never encountered this interpretation of the law in all our work across Texas or in any other location in the other 33 states we have worked in.

Looking more broadly across the region, communications between Greater San Marcos cities and counties have improved in recent years, especially related to economic development due to the influence of the Greater San Marcos Partnership and its efforts to be inclusive. Even so, there is always room for



improvement. Regional partners generally praised the GSMP, but some feel that communication between the Partnership and regional partners would benefit from more frequent economic development practitioner meetings as well as summaries of events such as Lead Investor meetings.

Business retention and expansion programs (BRE) are important tools to ensure that existing local businesses are supported in their growth ambitions. They can also support the improvement of education and training programs and identify prospect companies for attraction to the community. The GSMP has begun the implementation of a business-retention and expansion (BRE) program, and certain private sector executives noted that they have been visited multiple times since the program was launched. Others, however, feel that the program has “petered” out. Some said this was just due to a staffing transition and expect efforts to again ramp up following the hiring of a new existing-business manager.

Another important aspect of business climate is the stock of quality sites and buildings available for targeted employment growth. Without the capacity to accommodate expansion of existing companies or relocated firms across multiple sectors, a community’s growth will not be optimized. Executives in Greater San Marcos feel that the region is especially underserved for Class-A office space. One executive noted that, “Austin had 7 million square feet of empty office space and we have none!” Because of a lack of product in Greater San Marcos, many feel that companies are locating in markets such as New Braunfels that feature a ready supply of Class-A space. Survey respondents indicated that the lack of availability of both industrial sites and Class-A office space are disadvantages to the region, though there is slightly more availability of industrial sites in the region than Class-A office space. Nearly 59 percent of respondents identified availability of Class-A office space as a disadvantage, and nearly 42 percent said the same of availability of industrial sites and buildings.

Of potential catalysts to stimulate quality employment growth in Greater San Marcos, the strategy with the greatest upside is support for entrepreneurship, technology commercialization, and small business development. The following table shows that recent small business trends in the region have been mixed. From 2007 to 2012, the Greater San Marcos region experienced a comparatively high increase (8.6 percent) in firms with between one and four employees compared to the benchmark communities, state, and nation. However, firms with between five and ten employees grew by only 3.6 percent, less than two of three comparison counties.



SMALL BUSINESS STATISTICS, 2012

Source: U.S. Census Bureau, County Business Patterns

Examining statistics for sole proprietors (individuals who file their taxes as one-person firms), the San Marcos area experienced comparatively moderate growth—lower than the state, nation, and two of three comparison counties. At the sub-regional level, Caldwell County was the only geography to experience a decline from 2007 to 2012.

SOLE PROPRIETOR STATISTICS, 2012

Source: U.S. Bureau of Economic Analysis

In order to maximize the potential of local small business people, a community must provide support systems, programs, and personnel to ensure that individuals with good ideas for a new business can launch and sustain their companies. In Greater San Marcos, small business support programs include:

Texas State Small Business Development Center (SBDC): The Texas State University SBDC is housed in the McCoy College of Business Administration. A resource for existing and new small businesses, the SBDC offers a range of services, including business counseling, research assistance, and workshops and seminars.

SCORE: Greater San Marcos entrepreneurs are in close proximity to two SCORE chapter: Austin and San Antonio. SCORE is a nonprofit that provides counseling, workshops, and mentorship to small businesses at no cost.

20125-Year

Change 20125-Year

Change 20125-Year

ChangeGreater San Marcos, TX 2,182 8.6% 740 3.6% 3,981 10.5%

Hays County 1,870 9.8% 638 6.2% 3,449 12.3%Caldwell County 312 1.6% 102 -9.7% 532 0.0%

Brazos County, TX 1,842 3.8% 813 6.7% 3,884 4.4%Rutherford County, TN 2,181 -3.2% 953 4.6% 4,602 1.1%York County, SC 2,444 0.9% 822 -2.6% 4,470 -1.3%Texas 276,449 2.4% 105,213 3.4% 537,839 3.2%United States 4,060,074 -3.2% 1,402,142 -3.8% 7,431,808 -3.5%

Establishments, 1-4 Establishments, 5-9 All Establishments

Sole Proprietors as Share of

Employment

5-Year Point

Change

10-Year Point

Change

Average Income per Proprietor

5-Year Change

10-Year Change

Greater San Marcos, TX 31.2% 1.1% 4.0% $20,153 9.0% 7.3%Hays County 31.2% 1.3% 4.3% $20,128 5.3% 1.9%Caldwell County 31.5% -0.3% 2.5% $20,298 33.2% 41.5%

Brazos County, TX 17.0% 1.8% 4.2% $21,749 17.8% 17.6%Rutherford County, TN 20.1% 1.3% 2.8% $36,944 12.1% -10.7%York County, SC 19.7% 2.9% 5.4% $18,095 -18.0% -30.9%Texas 23.4% 2.3% 5.5% $45,767 22.0% 12.4%United States 21.3% 2.2% 5.1% $29,996 9.8% -5.7%



Several survey respondents cited small business development as a necessity for the region and identified several components of the region’s entrepreneurial climate as weaknesses. While 60 percent of respondents feel that the availability of talent is a regional strength, availability of venture capital, angel investment, and seed loans; entrepreneur-focused events and meetups; acceleration programs; small business development support; incubation facilities; and mentorship opportunities are all considered regional weaknesses. Respondents indicated that there are resources they can access in Austin, but not in the Greater San Marcos area. The Texas State STAR Park was mentioned as a major improvement for the region, but entrepreneurs would like to see more, particularly resources for those without Texas State ties. One respondent, explaining why small businesses are so important to the region, noted, “If there are more self employed people, it is reasonable to assume that they would be more community minded, put down stronger roots in the region and rise to leadership in the local communities.”

Access to small business loans is another important criterion determining a community’s capacity to support enterprise development. Capital needs differ for so-called “mom and pop” small businesses and the technology-focused startup businesses driving wage growth in many economies. The following table shows the local trends in awards of Community Reinvestment Loans, a key source of capital for traditional small businesses. The number of these loans extended to small businesses in the Greater San Marcos region was higher than all comparison geographies except Brazos County. Data clearly show the adverse effect the Great Recession had on loan awards. The average loan amount, though lower in Greater San Marcos than its counterparts, has risen the fastest in the recent ten-year period for which data is available, especially in Caldwell County.

CRA SMALL BUSINESS LOAN STATISTICS, 2012

Source: Federal Financial Institutions Examination Council

Additional capital for small businesses is provided by the Buda Economic Development Corporation’s Small Business Incentive Program. Launched in 2014 to stimulate small business growth, this program offers decreased permitting fees as an incentive funded by city sales tax revenue.

Input participants said that access to capital is a concern in Greater San Marcos. Of a group of technology entrepreneurs participating in a Vision 2020 focus group, only a handful had received funding locally; one had to secure financing in Houston. Banks in the area are not aggressive according to one participant, who added that local financing does not extend much past Texas State

Loans per 1,000 Establishments

5-Year Change

10-Year Change

Average Loan Amount

5-Year Change

10-Year Change

Greater San Marcos, TX 704.9 -66.4% -47.4% $33,874 64.5% 60.3%

Hays County 734.6 -66.8% -48.2% $34,882 65.4% 57.4%

Caldwell County 537.2 -64.2% -47.3% $26,074 55.6% 72.8%

Brazos County, TX 720.3 -59.2% -40.2% $37,690 77.6% 17.0%

Rutherford County, TN 631.2 -61.5% -52.7% $61,738 83.7% 42.5%

York County, SC 669.4 -56.9% -20.7% $42,796 53.1% 8.5%

United States 556.2 -63.0% -39.9% $39,152 60.9% 17.3%



research faculty. They feel a standalone San Marcos angel fund would be beneficial, although options do exist to leverage entities such as the Central Texas Angel Network (CTAN) based in Austin. Others said that financing is available for San Marcos enterprises, but you “have to sell yourself as part of Austin.” Beyond just financing, many entrepreneurs said that available flex, co-working, and wet lab space for startups is not readily available in Greater San Marcos (although a lack of wet lab space is an issue for all of Metro Austin). The same holds for an entrepreneurial “ecosystem” in the community. While there are “events every night” in Austin, it is hard for San Marcos-based entrepreneurs to meet and exchange ideas and experiences.

In the innovation and research commercialization space in Greater San Marcos, Texas State University is by far the dominant institution. Determined to continue its evolution from a teacher’s college into a major research university, Texas State reached a key milestone in 2012 when it was reclassified as an Emerging Research University by the Texas Higher Education Coordinating Board. Currently, there are only two state-classified Research Universities in Texas, UT-Austin and Texas A&M.

Among the research capacity established by Texas State are:

STAR Park: The Science, Technology and Advanced Research (STAR) Park, planned as a 38 acre-complex, currently consists of STAR One, a 20,000 square foot facility that opened in 2012 and serves as both a business incubator and a collaboration space The Park currently has five tenants (Quantum Materials Corporation, National Nanomaterials, Micropower Global, SMRS and Petaomics) who can take advantage of the ability to collaborate with students and faculty. Phase I of the building is focused on materials sciences and features chemical labs and clean rooms. An $8 million expansion is planned and will more than double the research park’s footprint. The research park boasts its position as the only available lab space for startup companies in Central Texas and is an important marketing tool for regional economic developers.

Materials Science, Engineering, and Commercialization (MSEC) Program: A program that started in Spring 2012 in the College of Science and Engineering, MSEC is an interdisciplinary research program focused on large-scale projects related to the development of materials to be used in the next generation of electronics, medicines, plastics, sensors and renewable energy. One example of the program’s reach is its Advanced Functional Materials Laboratory, one of its state-of-the-art R&D facilities open to all Texas State faculty and to external users, including industry and government researchers, who have established relationships with the university. The university has attracted the attention of firms such as Nitronex, which gifted $1 million of high-tech equipment that is used to produce advanced electronic components earlier this year. MSEC is the only program of its type with a commercialization component in the country.

The Meadows Center for Water and the Environment: Formerly the River Systems Institute, the aforementioned Meadows Center for Water and Environment develops and promotes programs and techniques for ensuring sustainable water resources for human needs, ecosystem health and economic development. One of its several projects is the San Marcos Watershed Initiative, a three-year process that will result in a Watershed Protection Plan for the Upper San Marcos River.



University-based Research: Several departments of the university research opportunities for students and faculty, including Manufacturing Engineering, Electrical Engineering, Industrial Engineering, Computer Science, Engineering Technology, Chemistry and Biochemistry, Geospatial Intelligence and Investigation, and Geography.

The university’s newly authorized Master of Science in Engineering offered by the Ingram School of Engineering was designed with input from major firms including Texas Instruments, Samsung, Tokyo Electron, and Dell, with the goal of meeting increasing demand for engineers with cross-discipline expertise.7

Texas State and Jacobs Engineering entered into a multi-million dollar contract that will afford students and faculty the opportunity to work on advanced engineering and science projects for NASA.8 University officials are working with Jacobs Engineering to potentially establish presence on the campus or in STAR Park.

Texas State touts itself as focusing on “blue collar” science and research with applied R&D and industrial applications. The university as a whole strives to be entrepreneurial and business friendly, with economic development, commercialization, and student entrepreneurship integrated directly into its institutional model. Companies with residency in STAR Park or on the Texas State campus must commit to help with teaching of students, co-author journal articles, and other contributions.

Public input respondents frequently identified Texas State as Greater San Marcos’ most impactful asset and most promising potential driver of a diverse, knowledge-based, and high-paying local economy. These assessments were focused both on the university’s research output and applications as well as the retention of Texas State students in the local workforce.

A look at research expenditures for 2012, the most recent year available, shows that Texas State’s sponsored research capacity has skyrocketed in recent years – a five-year increase of 364,7 percent – but is still trailing designated Research University Texas A&M by a significant margin. Even so, in this five-year span Texas State rose 79 positions to become the 218th ranked institution in the country by total research expenditure. The largest sources of funds for Texas State research are businesses, which contribute 2.3 percent of its funding, and the federal government at 32.6 percent.

7 Blaschke, Jayme. “Innovative Master of Science major in Engineering approved.” University News Service. 20 August 2014. 8 Blaschke, Jayme. “Texas State primed for NASA projects following BoR contract approval.” University News Service. 23 May 2014.



RESEARCH AND DEVELOPMENT EXPENDITURES BY UNIVERSITY, 2012

Source: National Science Foundation

Interestingly, Texas State’s increased research profile has not contributed notably to local patent awards. Of the patents listed in the following table, the highest number was awarded in the cities of Buda and Dripping Springs due to research collaborations with IBM and GlobalFoundries and other large firms in the City of Austin. In 2011, Hays County comprised nearly a quarter of all patents awarded in the Austin MSA.

PATENTS, 2011

Source: U.S. Patent and Trademark Office

Translating patent awards and Texas State research into quality local jobs will be the next step on Greater San Marcos’ evolution into a higher-profile knowledge economy.

.

Institution5-year


Greater San Marcos, TX Texas State University 218 $36,664 364.7% 352.1%Brazos County, TX Texas A&M University 24 $693,421 58.8% 27.5%Rutherford County, TN Middle Tennessee State University 364 $7,108 232.9% 1383.9%York County, SC Winthrop University 353 $7,993 NA NA

All R&D expenditures

(ths.), 2012Rank

2001 2006 20115-Year


Hays County, TX 480 514 662 28.8% 37.9%Caldwell County, TX 2 1 1 0.0% -50.0%Brazos County, TX 46 48 44 -8.3% -4.3%Rutherford County, TN 17 16 24 50.0% 41.2%York County, TN 22 26 28 7.7% 27.3%Austin MSA 1,732 1,912 2,460 28.7% 42.0%Texas 6,371 6,307 7,581 20.2% 19.0%United States 87,600 89,814 108,614 20.9% 24.0%



CONCLUSION This Vision 2020 Competitive Assessment has told a compelling story of Greater San Marcos as a region in transition. The direction the community goes will in large part be determined by how well different stakeholder groups come together behind a compromise vision for quality job growth and development. As one public official said in an interview, “We’re ‘right there’ in terms of making development happen. Historically, we’ve been too myopic in our definition of success – there has to be some compromise. We’ll likely never have a unified vision, so we have to be pragmatic and constructive to get shovels in the ground.” A private-sector leader echoed this sentiment, noting that, “We have a quality issue –we need quality jobs and quality housing. It takes leadership and collaboration to get prospects. It’s time we work together to get them over the finish line.”

The Greater San Marcos region finds itself in both an enviable and perilous situation; growth is coming, everyone acknowledges that. Central Texas has been and is projected to be the fastest growing region in the country for the near future. However, ensuring that regional communities are prepared for that growth and the Greater San Marcos economy diversifies away from growth-dependent employment and lower-paying service industries towards more knowledge- and technology-dependent jobs will be paramount. Based on the poverty rates of existing residents in Greater San Marcos and in-migrants to the area, this effort is not academic. Rather, the Partnership’s work fosters the creation of opportunities for many individuals and families who are currently in great need of it – those who have lived in Greater San Marcos for generations and those who are on the way.

Key Takeaways The following represent the Key Takeaways from the quantitative and qualitative research into Greater San Marcos’ competitive position for quality jobs and talent.

Greater San Marcos must better accommodate quality growth and development. This statement refers to growth of three principal types: population, physical, and economic. Without more higher-end housing and amenities, it will be difficult to attract and retain top talent. Without more regional coordination and collaboration on infrastructure development, it will be difficult to accommodate increased population and employment growth. And without the business climate needed to create quality, diverse jobs, the first two issues might prove moot. In fact, the reality is that all three dynamics are interrelated; a comprehensive, holistic strategy like Vision 2020 will serve not only to address component concerns, but also unify them under a single strategic umbrella.

The region must leverage its key assets more effectively. Greater San Marcos’ assets are many. Primary among them are its enviable location between metro Austin and San Antonio, the presence of Texas State University, and the region’s dynamic natural environment and amenities. Input participants said that Greater San Marcos must improve its ability to take advantage of these key assets if it is to truly emerge as a destination-of-choice in Central Texas and beyond.



Perceptions of Greater San Marcos must be changed. It is said that truly effective marketing reflects a “promise delivered.” If the San Marcos area is to better differentiate itself in the Central Texas region and become a more dynamic attractor and retainer of jobs and talent, it must not only develop a more compelling identity, but also work to fulfill it.

Greater San Marcos’ two component counties are diverging. Many economic, demographic, and community trends in Hays and Caldwell Counties could not be more different in terms of their trajectories. In some ways, these two counties comprise a “region” in name alone. As one poignant example, poverty statistics underscore the fact that prosperity and wealth opportunities are becoming concentrated in northern and western Hays County, while those opportunities have lagged in the City of San Marcos, portions of eastern Hays County, and Caldwell County. Local leaders must strive to continue building regional connections and collaborations, but also acknowledge the starkly different realities of these counties and the differentiated solutions needed to address issues of greatest concern.

A consensus strategy for Greater San Marcos’ future must be established. Many local citizens agree that they “don’t want to be Austin.” The capitol city’s growing challenges with cost of living increases, traffic congestion, lack of affordable housing, and loss of some of the unique qualities that helped define it paint a clear picture in many minds of the direction Greater San Marcos does not want to go. But neither does the San Marcos area want to experience even higher rates of poverty, a lack of quality housing at multiple price points, a dearth of higher-end retail, restaurants, and entertainment, and a reputation as a “pass-through” community on the way from Austin to San Antonio. This Vision 2020 process will seek to find a unifying vision that leads to a broad consensus for action.

This Competitive Assessment was the first phase of the Greater San Marcos Vision 2020 process. Following this report will be an analysis of the region’s highest priority target sector opportunities, a review of current and potential economic development marketing programs, and, ultimately the Vision 2020 Strategy itself and an Implementation Plan to make the strategy operational and effectively advanced.

Documents

GREATER SAN MARCOS VISION 2020 COMPETITIVE ASSESSMENT Vision... · State University and the San Marcos Municipal Airport, historical activity centers and neighborhoods, and a young,