San Antonio: Economy

San Antonio: Economy

Major Industries and Commercial Activity

As of February 2005, San Antonio has seen 13 consecutive quarters of economic growth and has earned a top ranking among large Texas cities. The largest employment sectors in San Antonio are services, manufacturing, and government. The large concentration of government workers is due mainly to the location of four military bases in the area—three Air Force bases (Brooks, Lackland, and Randolph) and one Army post (Fort Sam Houston). From the days its first mission and accompanying presidio military post were founded in 1718, San Antonio has been regarded as an area of strategic importance. By the end of World War II, the city had become the location for the nerve center of the nation's defense network, and it remains the headquarters for the largest military establishment in the United States. The bases provide employment to approximately 74,500 military and civilian personnel and have an economic impact on the local community of $4.9 billion. In July of 2001, another of San Antonio's military bases—Kelly—closed and was redeveloped as KellyUSA, a commercial port. Comprised of an airport and rail-served business park, KellyUSA employs 12,361 people (among them, 7,221 Air Force employees) and has a $2.5 billion economic impact on the San Antonio area.

The service sector is the largest and fastest growing sector of the economy, largely because of increased demand for health care and business services, and San Antonio's sound tourism industry. Medical and biomedical industries now account for the largest part of the city's economy, contributing approximately $11.9 billion to the area in 2003. San Antonio's highly regarded medical industry includes the 900-acre South Texas Medical Center, which employs approximately 25,000 people. Medical industry employees account for 14 percent of all employees in the San Antonio. In a 2003 survey by the Tourism Division of Texas, 5 of the top 10 tourist draws in the state were in San Antonio, with the Alamo and the River Walk in the number one and two spots, respectively. The attractions of the Alamo City, as San Antonio is known, appeal to tourists from across the country. Approximately 8 million people visit San Antonio per year, and the tourism industry has an estimated $4 billion impact on the city's economy.

Toyota Motor Corp. recently chose the San Antonio area as the location for one of its newest truck manufacturing plants. The plant, expected to generate approximately 2,500 jobs, will produce approximately 150,000 trucks annually. Production start-up is scheduled for 2006.

Items and goods produced: processed foods, airplane parts, storage batteries, steel forms, structural steel, food handling equipment, semiconductors, rolled aluminum sheet, cement

Incentive Programs—New and Existing Companies

Local programs

The San Antonio Economic Development Foundation is a not-for-profit organization, founded and supported by the business community of San Antonio for the purpose of recruiting new manufacturing, office, research and development, warehousing, and distribution operations to San Antonio. The staff provides factual information on the community from which a business can make an informed decision on establishing or relocating a new facility in San Antonio. The City of San Antonio's Economic Development Department (EDD) helps relocating, expanding, and start-up businesses. EDD offers a variety of financial incentives to encourage business and residential development, including tax and fee incentives, financing, regulatory reductions, and workforce development assistance, and provides customized, one-on-one service.

State programs

Texas is a right-to-work state. Texas Economic Development is the state's leading economic development agency. It offers financial incentives through various programs: the Capital Access Fund supports businesses and nonprofits that fall outside the guidelines of conventional lending or otherwise face barriers in accessing capital; Linked Deposit Fund encourages lending to non-profits, childcare-providers, historically underutilized businesses, and/or small businesses; Leverage Fund is an "economic development bank" providing financing to Texas cities that have passed an economic development sales tax; Industrial Revenue Bonds offers tax-exempt financing on land and property for eligible industrial or manufacturing projects; Defense Zone Program supports Texas's military presence; and Enterprise Zone Program encourages investment and job creation in areas or "zone"s of economic distress. San Antonio has five designated enterprise zones.

Job training programs

The Alamo Workforce Development Council will assist businesses in employee recruitment, screening, assessment, and customized training. Also, the State's Skills Development Fund has $25 million available to fund training programs designed by employers in partnership with local community colleges. The Texas Workforce Commission provides funds for training. In 2003 there were 32 grants, totaling $12 million.

Development Projects

San Antonio is getting ready to welcome even more visitors with its expanded convention center, the new SBC Center sports arena (opened in October of 2002), and other new construction. In 2004, $2.2 billion worth of construction permits were issued; the city usually is in the $1.4 billion to $1.6 billion range. Projects underway as of 2005 include the building of a new Texas A&M campus, a new convention center hotel, the Toyota plant, and several retail centers. San Antonio's Henry B. Gonzalez Convention Center recently underwent a six-year, $218-million expansion that increased its square footage to 1.3 million. The convention center has more than 203,000 square feet of meeting space that is divisible in 67 ways, four exhibit halls offering a total of approximately 440,000 square feet of contiguous display space, and three ballrooms. The convention center complex also features the Lila Cockrell Theatre, a performance art theater offering seating for more than 2,500. The San Antonio Spurs share the SBC Center, a $175 million, 18,500-seat venue, with the San Antonio Livestock Exposition.

Economic Development Information: San Antonio Economic Development Foundation, 602 East Commerce Street, San Antonio, TX 78205; telephone (210) 226-1394; fax (210)223-3386; email edf@dcci.com. City of San Antonio Economic Development Department, PO Box 839966, San Antonio, TX 78283-3966; telephone (210)207-8080; fax (210)207-8151

Commercial Shipping

Positioned on airline, highway, and railroad routes to Mexico, San Antonio is also the center of a 47-county agribusiness market area for crops grown elsewhere in the state of Texas. San Antonio firms handle processing, packaging, and nationwide distribution of vegetables, pecans, watermelons, and citrus fruits. Livestock, poultry and poultry products, and dairy products also pass through San Antonio.

San Antonio's KellyUSA is a major logistics port. It has 300,000 square feet of warehouse space available and 11,500-foot heavy-duty runway. Kelly is directly linked by three interchanges with Interstate-90 to I-35, I-10, and I-37, and is located on two major rail lines. San Antonio International Airport provides direct and non-stop service to all major hubs. Dallas and Houston are 50 minutes away by air and Mexico City is one and one-half hours away. Stinson Municipal Airport handles general aviation traffic and acts as a reliever airpost for San Antonio International Airport. Two freight railroads serve the area, providing service to Mexico and linking San Antonio with St. Louis. The city of San Antonio operates a general purpose Foreign Trade Zone (FTZ) under the supervision of the U.S. Customs Service. Sometimes referred to as "free ports," FTZs are secured areas that officially fall outside U.S. Customs territory. FTZs help U.S.-based businesses cut costs, improve cash flow, and increase return on investment by deferring, reducing, or altogether eliminating duties and excise taxes if the final product is exported from the zone.

Labor Force and Employment Outlook

San Antonio's economy saw unprecedented growth in the 1990s and has remained strong in recent years. In 2004, Houston was the only Texas city to exceed San Antonio's job growth rate; that year, the San Antonio area added 12,000 new jobs. In 2005, an additional 18,500 new jobs are expected. A local economist theorizes that the remarkable strength of San Antonio's job market can be attributed to its economic diversity. Projected job growth between 2005 and 2009 is expected to be 87,340 new jobs, with the largest gains projected in the following sectors: services; trade; government; finance, insurance, and real estate; and construction.

The following is a summary of data regarding the San Antonio metropolitan area labor force, 2003 annual averages.

Size of nonagricultural labor force: 725,000

Number of workers employed in . . . natural resources and mining: 2,300 construction: 39,900 manufacturing: 45,400 trade, transportation and utilities: 129,800 information: 23,500 financial activities: 59,200 professional and business services: 85,800 educational and health services: 96,500 leisure and hospitality: 80,400 other services: 27,200 government: 135,000

Average hourly earnings of workers employed in manufacturing: $10.85

Unemployment rate: 4.5% (December 2004)

Largest employers	Number of employees
United Service Automobile Assoc. (insurance)	13,773
H.E.B. Food Stores	9,942
H.B. Zachry Co. (contractors)	8,000
SBC Communications	7,000
Southwestern Bell	4,589
Frost National Bank	3,290
West Telemarketing	3,087
Taco Cabana	3,000
Ultramar Diamond Shamrock (oil refining)	2,857
QVC Network	2,034

Cost of Living

San Antonio's cost of living is one of the lowest among large American cities. San Antonio's housing costs rank among the lowest of the 25 largest metropolitan areas.

The following is a summary of data regarding several key cost of living factors for the San Antonio area.

2004 (3rd Quarter) ACCRA Average House Price: $238,000

2004 (3rd Quarter) ACCRA Cost of Living Index: 95.2 (U.S. average = 100.0)

State income tax rate: None

State sales tax rate: 6.25% (groceries and medicines are exempt)

Local income tax rate: None

Local sales tax rate: 1.5% (groceries, medicines, rent, mortgage payments, and gasoline are exempt)

Property tax rate: $0.58 per $100 of assessed valuation (100% of market value) for real property; also hospital and school district, county and flood taxes (2003)

Economic Information: San Antonio Economic Development Foundation, 602 East Commerce Street San Antonio, TX 78205; telephone (210) 226-1394; fax (210)223-3386. City of San Antonio, Economic Development Department, PO Box 839966, San Antonio, TX 78283; telephone (210)207-8080