Super Regions: The Austin Metro with Laura Huffman, President and CEO of the Greater Austin Chamber of Commerce

Episode Highlights:

The strengths/selling points of the region

1.     Texas – affordable, low tax, and business friendly

2.     Access to talent – 150K students enrolled in higher education

3.     Quality of life

 What are the challenges when a company comes to Texas

1.     Talent, including the impacts of the “great resignation.”

2.     Supply Chain issues

3.     Uncertainty, starting with the COVID pandemic

 Issues in Austin today

1.     Homelessness

2.     Public Safety

3.     Infrastructure - $20B in projects which include Project Connect, the I-35, and the airport

 It takes a long time to put together the coalition around big things like the Airport Master Plan, Project Connect/I35… sometimes a decade or more.

 CBD and entertainment districts, we now have a number of entertainment areas in the Central Business District (Seahome, Rainy Street).

 When does ASA become a super region – “it’s already a thing!”

ANP Episode 30

Michael Scharf: Austin continues transforming into the next innovation powerhouse. In this podcast, we explore how central Texas is growing the people and companies, the industries, and infrastructure, the macro and micro trends that come together to create the future of Austin. I'm Michael Scharf advisor, and consultant to FinTech, cyber and environmental companies.

Jason Scharf: I'm Jason Scharf a biotech executive, and early stage investor.

Michael Scharf: And this is Austin next. There isn't a week that goes by without Austin in the news. And it's mostly for good things. Usually it's about our continued growth as an innovation and economic powerhouse. One of the central pillars of our growth is the Austin chamber of commerce and an April, 2020.

The Austin chamber named Laura Huffman as their CEO and president Laura is an Austin native and has a distinguished career in public service here in central Texas. Before joining the chamber, Huffman served as the Texas state director for the nature Conservancy and spent 15 plus years in city management, working for both the cities of Austin and San Marcos.

We wanted to discuss not only the issues central to Austin. But to get her view on the regional dynamics impacting us here in central Texas. Laura, welcome to Austin next.

Laura Huffman: Thank you. Thanks for having me.

Michael Scharf: It's really rare to find an Austin native. And so I wanted to start there, can you describe the most important changes in Austin, both over your career and longer?

Laura Huffman: Oh, what a great question. You know, it's interesting because. You know, as someone who was born here and grew up here in some ways, this is the Austin that I've always known in love. And in some ways it's very different. So there's super obvious things. The downtown skyline has completely changed the trail around lady bird lake is far more beautiful than it was when I was growing up.

And so it, you know, it's a series of changes. Some of which I think are really, really great. And some of which just make Austin A. Little bit different. But for me, this is the Austin. I love,

Michael Scharf: You've been at the chamber now for about two years. How do you think you've changed the chamber and how do you think the chamber has changed you?

Laura Huffman: Oh, so it has been probably the most unusual two years in my career and at the chamber. Uh, and so I think we've all changed in the last two years. In fact, when I joined the chamber, it was, we were all sheltering. In fact, it was months before I even met staff colleagues that I didn't already know. And so it was an extremely unusual way to start such an outward facing job.

And the first thing that I was asked to do by then county judge, Sarah Eckhardt and Steve Adler was to put together and lead a business task force on how to handle COVID. And you got to remember, this was right when we were starting to shelter in place, it was unclear what the guidelines were. It was unclear where the authorities were, um, even basic communications about construction, but construction could go on business as usual, what adjustments needed to be made so early, early days, uh, of, of the pandemic.

And that was, that happened my first week of work. And so it was, it started out very unusually and, and frankly it ended up even on an unusually high note because as we came out of 2020, it was the best year for economic development that this community had seen and economic development. We can talk more about this, but very dynamic economic development, not just recovery, but building into the future.

Michael Scharf: You walked in there. And the most unusual time in years and years and years, What were the goals that you set out for the chamber and how have those, uh, progressed? Well,

Laura Huffman: the chamber has three big areas that we work in. One is economic development that is extremely strategic and intentional. And what are those areas of economy that we need to be bringing into the community?

What are those economic pillars? So to speak that we have that need strengthening. So one of the things that was happening as I came in was that. It was on pause and then off of pause because of the pandemic, but Tesla's a great example of a big bang. It offered us an opportunity to add. We, we understood initially 5,000 jobs that later became 10,000 jobs, but not only was that a really neat way to add jobs at a time when we were worried about job loss, it also created an entire new economic side.

For this region. And so automobile manufacturing, and of course Tesla's high, you know, that's technology manufacturing as well. Uh, we knew that that opportunity would not just be a Tesla when we knew that supply chains would come and we knew that it would be a game changer for the community. And when Elon Musks announced that he was moving his headquarters and his other businesses here.

Those opportunities just grew. So that's an example of developing the economy. Very strategic. And the chamber has always done that in partnership with opportunity Austin. Another great example in that space is the work that we did to support the creation of a medical school. We knew that not only would that overhaul healthcare in Austin, we knew that the creation of a medical school and a teaching hospital would bring life sciences to Austin.

And that happened. So economic development. Uh, and I think we've demonstrated that this economy is very resilient, as I think is one of the more successful, uh, areas of work that we do the second area is. And making sure that we're keeping up with infrastructure and here too is a very interesting story, you know?

In the middle of the pandemic, this community voted to support project connect, which is a dedicated tax rate to invest in all forms of mobility for this community. And so we are actually at a high watermark. It relates to infrastructure. We've got 20 over $20 billion of projects. Uh, the big ones are project connect.

I 35 and the airport, but we've never had that much active investment and infrastructure in this community. The third, big area is workforce talent and education. And, and while I'm saying it third, I would say the number one issue on people's minds is how do I, how do I attract and retain talent? And we've got an incredible reputation for having talent locally and all the time that we spend thinking about that enhancing that is worthwhile.

Jason Scharf: It's funny. Across we've said we've been doing, you know, Austin next for about nine months and infrastructure talent are always those kinds of big challenges that kind of being brought up. So let's start on the, you know, I love all the pillars that you can say let's start on economic development. So when companies are thinking about moving here or you're going out and kind of pitching companies, what's

the pitch, the main pitches.

Austin. Right. And it's not just Austin, it's the region. Cause a lot of these companies are looking at round rock and Pflugerville and San Marcus and, and those, the communities that comprise the central Texas region have a whole host of selling points for one. Texas in and of itself is a selling point.

Uh it's. It is a state that is relatively affordable, low tax and, and business friendly. So Texas tends to pop up in an analysis when companies are looking at places to either relocate, establish headquarters or expand, uh, when you're looking at Austin and the region specifically, what comes up really high on people's lists is.

Access to talent. And if you look at the educational institutions that are very close by in the central Texas region, there are over 150,000 students enrolled in either two year or four year colleges. So that's, that's a lot of pipeline. If you pull that border out to A and M you double the number. So talent, local talent comes up really high companies are always paying attention to infrastructure and making sure that they can, you know, they can move goods and services.

And of course, quality of life. You know, Austin just knocks it out of the park. When people are coming to look at Austin, it is a beautiful city. It's a friendly city and people can imagine themselves moving here and raising kids here and enjoying the community as well as building a business.

Those things, you know, definitely resonate was we said, I mean, obviously we've only been here for about a year and change right?

In this business friendly environment, the open culture has been. Different than I've seen anywhere else. I mean, I'm quoting Jim Brier at south by Southwest, but said, yo, you can play, you can be nice and win here in Austin. Right. And that's, that's different than a lot of other ecosystems, the, the speed at which the network has been opened to us and just kind of meeting everybody here.

So when I look at kind of the differences and we talk about lots of these people coming in the chamber is only so big. So I find interesting is we have all of these. Sector diversity is huge, right? So we have CPG, Space, EV, life science, fashion, like you, can you name it? And it keeps going, right. So how do you guys select who you're going after, how you're trying to pitch, you know, because it's different messages when you get into kind of that level of detail.

So you said like the Dell medical school is helping with life science. How do you think about that?

Laura Huffman: Well, what we do is our economic development program is called Opportunity Austin. And every five years, we go into an in-depth analysis about how the economy is performing. What's working well, what's not working well and where we need to spend time and effort in the recruiting space.

And so we're very careful to follow that strategic plan and it tells you. Either. Hey, you've got an opportunity for this sector that you may not have seen before. I think the hospital in life sciences is a nice example of that. Tesla is also a nice example of that. Uh, but the plan will also help us see, are there particular holes that you've.

got. Are there areas of this economic sector that are weak and need to be filled? And so the strategy behind recruitment really is driven by that strategic plan. And we're about to enter into the fifth five-year strategic plan for this effort. So we're going to be taking a look in the next year or so at what the economy looks like today, and it looks a bit different than it did five years ago.

Tesla's new, Army Futures Command, which is, has had a tremendous impact on central Texas. And by the way, on our higher education institutions. So we'll be going through that process in the next year to year and a half to evaluate what's working well, what needs, what needs are out there? And then our recruiting, uh, we'll key off of that.

And then let me just say, there's a ton of incoming to, uh, it's not just that we are recruiting. There are companies that are eyeing Austin because they see supply chains because they see talent, all of those things. And then I do at some point, have a funny story to tell you about that. You can succeed and be friendly.

Jason Scharf: Love to hear it.

Laura Huffman: Well, I don't know if you found this to be true yet. I have always found this to be true in Austin. You know, when people are gathered in Austin and they don't know one another, and it's the Kevin bacon game. There's usually three degrees of separation. And what's so funny is people are always trying to figure out how they know each other.

I was at an event a few days ago and there were some people from New York and it took us less than two minutes. To determine who we knew in common and, and how the businesses that work together. And I, and I think that's just one of the demonstrations of, uh, of how friendly Austin is. We, we may not know each other directly, but it's rarely more than three degrees of separation.

No,

Jason Scharf: it's actually funny. We, we met a family that lived near us. We shared the same real estate agent. We were talking to them. And then, uh, my daughter who's five, had a really good friend. And we realized through the conversation that the two fathers went to the same fraternity at, uh, UVA and knew each other.

So then through us, we all set up a nice little dinner at, uh, you know, at Hat Creek and, you know, had everyone kind of reminiscing on that. And so, yes, it's very, very small world in this kind of situation. But we came from California, they were from New York and the people who were here in Austin,

Laura Huffman: Yeah. And you hear those stories all the time.

And I just think that's, that's just how this community is evolving. Uh, there's a casualness to it and a friendliness to it that I think is really attractive to people when they're looking for where they're going to either move their business or grow their business. And it's attracted to people who want to for workforce, right.

People want to live in Austin.

Jason Scharf: Yeah. So all the positive reasons and the great re there. What is you've seen is kind of like the biggest challenge. When a company kind of hits the ground.

Laura Huffman: Uh, right now, I mean the last two years, again, I've been super unusual. So uncertainty, I would say, has been a challenge for the last couple of years.

Supply chain has been a challenge for the last couple of years. The great resignation has been a challenge for the last couple of years. Inflation has been a challenge. So we're in a period of time where. My answer. Might've been different three or four years ago, but right now we're experiencing some of the fallout of the pandemic.

And so those are the challenges. And then there are some community challenges that we face as well.

Jason Scharf: We'd love to hear what some of these kinds of community challenges are that you think saying,

Laura Huffman: you know, I think in the, some of these have emerged from the pandemic. Some of them have persisted, but I think public safety has been a big focal point in the last few years.

Homelessness got, uh, w you know, really, really gained attention during the pandemic. And I would put affordability really at the top of the list. And I think those are examples of issues that are. Really complex issues and tend to be intractable and are worthy of very deep thinking, very deep collaboration's in this community.

There's not going to be a silver bullet for any one of those issues. The solutions will be complex and there will be a lot of them. And those are also areas that we spend real time on at the chamber. And

Jason Scharf: I think it leads probably the next thing. When we think about affordability and infrastructure, I'm going to, I want to link them together in this way.

As we've been observing Austin, we've found a couple of unique superpowers that we think is literally what is driving our region. And, and one of them is we build and I wanted to throw a stat at you in terms of how I think the affordability crisis might be. Um, going away over the longterm. It kind of hoping in this kind of case, 2021, this is permit.

So this isn't, this isn't built houses, but this has permit. Austin has. Permitted 50,000 houses or fits or 50,000 units in the Metro region with about half of them being single family homes and half of them being a multifamily New York city, or sorry, New York Metro, which is much more than New York city.

With 10 times, the population also permitted 50,000. Units. So clearly we are building now. It may not be, it it'd be interesting to look at the map. It may not be in Austin proper. It may be in Pflugerville, Leander, Bastrop, and the like, but I find that interesting that, you know, we are trying to build our way out of this and at the same time, which sounds to me like a very, a change in Austin's thinking.

The $20 billion number. I've obviously heard quite a bit before in this kind of case, but that seems to be new. The fact that we're like, we're doubling down now and saying, you know what, we do have to build out the infrastructure to be this kind of next generation, um, city, because you know, I35, you know, can't handle the traffic as it currently is.

It currently stands. So what is your thoughts kind of generally on infrastructure and how we're building our way out of some of these.

Laura Huffman: Right. Um, so that's, that's a big question. One thing I would say is it's not that new, you know, project connect, there have been previous iterations of this, that, that has taken, you know, a decade to put that into place in a way that made sense.

And that voters would approve the airport master plan. Uh, you know, the efforts to design that were underway years ago, I 35, the funding for that. Um, and the thought process about that initiated years and years ago. So, you know, these big ideas do take time. I, you know, sometimes I, I think infrastructure is funny.

Cause when, when you don't have the idea, then the hardest thing is having the idea. And then once you have the idea, the hardest thing is finding the funding. And then once you find the funding, the hardest thing is making sure that it's well implemented. And so the truth is these things happen over know.

Long periods of time and the construction of the three projects that I just described are going to take a lot of time as well, the relationship. So I think your statistic about New York and central Texas is interesting. One thing is we're probably growing at a faster rate. Right? Did you compare those two things?

Jason Scharf: New York

Metro is shrinking. So definitely from that perspective, right, right,

Laura Huffman: right. I mean, our growth pattern is the thing to pay attention to. And I also think when it comes to housing, we're going to have to get used to the idea that. There are going to be a number of things that we're going to have to do and do well in order to create housing at a whole variety of price points.

And so here's the relationship that I see with infrastructure. As an example, project connect is going to have us building stations, um, transit oriented districts, where the stations we are going to be built, or, you know, the best practices tend to be areas where people can work, where they can live and where they can play.

So those are opportunities to create some density and to create zones where people are, where their lives are pretty conveniently co-located with work, play and living, and people tend to want. Work that way, because it saves them long commutes. And, and it's easier when you're raising families to drop your kids off and get to work and go to the grocery store.

But that's an example of where there's an intersection of two big issues. One is mobility and the other one is housing. Another thing to be thinking about, I believe is, you know, when we get projects like Tesla, how can we think about housing that's in the area, you know, Fairly close to that area, knowing that it's not just going to be Tesla, you're going to have supply chain companies out there as well.

And how can we be ever more thoughtful about making sure that when we get these really large employers coming in, that we are somehow creating, um, Incentives. They may not be financial incentives, but incentives for housing to get really close to those big employment centers. And then you touched on this a little bit, you know, we have to have a conversation about density and where can we have density in Austin?

That doesn't come at the expense of neighborhood integrity. And we just don't have the answer to that question right now.

Jason Scharf: Well, and I think you layer on top of that remote and hybrid work, right? Because I personally actually work remotely, uh, you know, for a company in Maryland. And so it becomes, my commute is a, is all digital, right.

And in that kind of case, but it'll be interesting when we have that, because you have a number of people who either work remotely so they can live wherever. Um, and the same time, then you have the hybrid, which is I'm probably going to want to live in the suburb. And if my hybrid office, even if it's in downtown fine, two days a week, I'll make that commute.

Right. So it then further changes the dynamic. What density is, or isn't needed, what mobility is or isn't needed as you kind of do that. And we see this kind of transformation. I think this is not just Austin, right? Of what does the central business district downtown, whatever you want to call it, what function does it have?

Does a, is it pure? The Googles and Metas that we see taking those towers? Is it, do startups have a place there or really from an affordability perspective? And you know, myself as an investor, like, should you be spending that much for the cool, you know, office downtown? Or should you go 10 minutes out, you know, south Congress or wherever and spend a little bit less, but have that collaboration.

So it'd be interesting to see the kind of work conjunction with these infrastructure improvements as well.

Laura Huffman: Well, and think about downtown. I mean, so speaking as someone who's been here for a little while, uh, you know, there has been a lot of really deep and creative thought about downtown. Uh, there was a period of time when I, when I first started my career in city hall, there was very little activity downtown.

There was very, you know, what we now call the second street retail district that and Seahome home and all of that. That was a warehouse district. And it wasn't there wasn't much going on. And I think the vision, uh, was, and is that Austin is, is the living room from the community, right. We've got a beautiful public library.

We've got, you know, a vibrant entertainment. Not just extreme. You've got Rainy street, you've got the Seahome district. You've got lots of places where people can enjoy themselves and, or entertainment areas. And you do have a real combination of big companies, but also you've got things like capital factory, which is incubating companies.

And so I think you're right that as, as this region evolves, You know how people think of and use downtowns might shift. But the way that we have thought about our downtown is really pretty vibrant. And, and here I missed a punchline. Look at Waller Creek, you know, look at that beautiful open space in green space.

Look at town lake trail, Ladybird lake trail. Um, that gives me a way as a native Austinite, by the way, sometimes I

by names that I grew up with.

Jason Scharf: I've done more hiking here than ever in my friends back in California were like, what happened to you? This is not you. I'm not an outdoorsy person. And we've definitely gone kayaking on the lake.

Laura Huffman: Um, so, so it's been, it's been very thoughtfully, you know, thought through how vibrant can downtown be.

And a lot of things are true in a fast-growing region, right? It's not just one thing that defines how things are going, but look at the fact that Tesla, you know, located outside the city limits and that's going to have, you know, that will be a, um, transformation for that community. And so there are, it's just a very dynamic situation we're in, but I was going to say one other thing about your comment about commuting and stuff like that.

I, I think it's a great time for Austin to be thinking about intersections. And I don't mean that in the sense of roads, I mean, intersections of issues. So yes, we're seeing a lot more modified work schedules. What are some of the benefits of that? Well, congestion for one and people, you know, people having higher quality of life because they are able to have work-life balance.

I mean, there's just, I think one of the things that the pandemic taught us all is that. A lot of, a lot of these issues that we might've thought about separately and distinctly are really quite

related.

Michael Scharf: I think you're right. And I think that gets to the area that I wanted to talk about and kind of go up a little bit in terms of, of, uh, vision and viewpoint.

The Austin Metro is obviously a lot more than Austin, proper. You've got everything from San Marcos to Taylor and from Bastrop to dripping Springs and all that area in between. And we've talked to people in some of these other areas and they all try to position themselves a little bit different. How do you see Austin and the surrounding suburbs positioning themselves?

And how does that fit into those intersections?

Laura Huffman: Well, as someone who spent the early part of my career in San Marcus, I say it's a yes. And you know, there are distinctions in these communities. They do have, you know, really interesting histories and their own cultures and their own, uh, quality of life areas.

And so I, I don't think it's a matter of, first of all, there's certainly no hierarchy, no one is better than anyone else. They're just different. I mean, if you look at the region, there's just a lot of different ways to choose how you want to live, where you want to live, how you want to work, how you want to raise your families.

And I think they all add value. And I think it's really important that we not define any one community as having a standard that other communities are trying to meet. It's more interesting. The variety is what's more interesting.

Michael Scharf: When we spoke to the, uh, the round rock chamber, it was kind of funny because Jason Ball, at the time, the CEO was telling us how he gets complaints about people saying, why didn't we get this?

And why didn't we get that? And he goes, I can't put together the size property that these folks are looking for. And we look at what's happening now in terms of whether it's wet lab space for, for biotech and healthcare companies. Uh, we just had that new announcement of that new AI in drone space out by the 360 in the bridge.

Cause they could do, I think it's like 15, 20,000 square feet of field there kind of thing. We've got places like. Firefly in Cedar park, they're building rocket ships there. They need room. Can, can Austin support the needs of these specialty industries or are they naturally going to spin out to these places farther around the central core?

Laura Huffman: Oh, I think we're seeing some of that already for companies that need really large sites. They're already pursuing sites in the region. And, and I even think that we're probably going to be rethinking what we mean by reading. In the next five years or so our current chair, Fred Helden bells is very focused on the fact that, you know, the Austin San Antonio region for years has been characterized as an emerging mega city.

And global conversations. And if you just drive from San Antonio to Austin and back again, you can see that's already happening and you can see the growth in San Marcus and new Braunfels. And, um, so, so I think what, what we are seeing, I mean, Here's one way of thinking about it. Texas is a very urbanized state and we have some of the fastest growing cities in the country, and we have some of the largest cities in the country.

And so by definition, one city will not meet the needs of all companies. And that is very true in the central Texas region. And I think the announcements that you see, and if you think about the kinds of sites that people are seeking, whether it's a downtown announcement. Or a Taylor announcement companies have.

Well, I mean, I just come back to the fact that one of the reasons we're so successful is because there's such a diverse set of choices for companies. It's not just, you know, a downtown, if that's what you're interested in. And if that meets the needs of your workforce in your business, Then we're seeing plenty of newcomers to downtown, but if what you need is a Greenfield site, you know, that's really, really large than we're seeing those announcements.

And, you know, throughout the region

Michael Scharf: You picked up on the other topic I wanted to talk about today and that's the super region. Yes, you're new chairman of the board, uh, wrote an article and I want to quote from it. "My top priority for 2022 is to initiate a joint, super regional partnership between the eight county San Antonio region and our five county Austin region.

We should find ways to collaborate with our neighbors and form a mutually beneficial economic corridor or super region in central Texas

is ASA becoming a reality."

 is that going to be where people start talking about this area going forward and what does it mean?

Laura Huffman: Well, depending on how you look at it, it's already a thing, right?

If you're a major employer and you are looking for top talent and higher education institutions, you will be drawing on students from everything from a and M to. UT San Antonio and everything in between. So from a talent perspective, I think that, you know, we already are a super region and recruit. I am sure that recruiting, uh, throughout the region is active in all of those institutions and here's, and I think we're really fortunate in central Texas and in San Antonio that we have so many educational institutions beyond K through 12.

I mean, we've got, you know, we certainly have. Large schools like the university of Texas and Texas state university, but we've also got other kinds of schools that are producing really great students like Houston Tillotson and Concordia and St. Edwards and Austin community college. And the partnerships that you're seeing.

Particularly with two year schools, you know, partnering with the school districts to get kids out of the high school with some credits and also partnering with the four-year institutions, really, really great stuff. And then there are some areas where we are not a super region. If you've driven on IH35, you get a beat on that.

So I think there, I think there are some areas that have already naturally caused us to be working together from a business perspective. And then I think there's some real, there's, there's some real thoughtfulness that needs to go into actual connectivity. What would that look like? What's practical, what's feasible.

Um, and then I think there's another layer of conversation, which is, you know, how do we think about economic development as a super region. And so there's plenty of room to grow, which is why Fred chose that as an area of focus, because we've been talking about this connection with San Antonio for a really long time, the demographics and the growth of our communities are going to get ahead of us.

If we don't really start doing some, some very thoughtful, practical action oriented work around that super region.

Jason Scharf: So. As we look to the future, we always like to ask the same question, at the end of the podcast, Laura, what's next Austin.

Laura Huffman: I think next Austin is, is, uh, is a community. And I say, this is someone again.

Who's been here for awhile. That is, is beautiful. It's open. It offers opportunities for all it takes on my aspirational. Hope for Austin next is that we. We look head on at some of the issues that are a function of growth and leverage the success that we've had into the problem solving. And I think Austin has the kind of personality in this region has the kind of personality to think very dynamically about the challenges that we face.

Um, and I think that that would be distinctive. I think a lot of communities grow really quickly and then they start hitting walls. And I think, I think we're the kind of place and the kind of people that can push through that and find creative ways to tackle the issues that we're facing. And my hope is that, that we just embrace.

We're all here for a reason, more so than ever. We're all here for a reason because people have so many choices about where they live. And I think the one thing that binds people together, whether they live in Austin or Georgetown or round rock or San Marcus or Pflugerville. We love this place. And I think it's important to remember that, uh, we, there is a lot of community pride and I think that's a really important and exciting feature that we have.

And I don't think we focus enough on it, travel anywhere, tell people you're from Austin and they're gonna smile and say, that's

Jason Scharf: really cool

And on lots of the things that we, that we've seen. Laura Huffman, CEO and president of the Austin chamber of commerce. Thanks for being on the Austin next podcast.

Laura Huffman: Thanks for having me.

Jason Scharf: So what's next Austin. We're glad you've joined us on this journey. Please subscribe on your favorite podcast. Catcher, leave us a review and let your colleagues know about us. This will help us grow the podcast. We'll continue bringing you unique interviews and insights. Thanks again for listening and see you soon.