Waller County on the Map as Companies Consider Reshoring and Foreign Direct Investment
Manufacturing is on the move.
A June 2020 survey by Thomas, found that nearly 70% of U.S. companies are “likely” or “extremely likely” to reshore their operations to strengthen their supply chains — a 54% increase since February 2020, just before the pandemic declaration.
In a September 2020 international BDO survey, 24% of CFOs of companies with revenues of $250 million to $3 billion said they plan to relocate their supply chains to another country in 2021, with the U.S. topping locations manufacturers saw as the most stable market from which to source materials.
Focused on cost containment, many supply chain managers often neglect to fully consider the costly risks of disruptions. A recent PwC study found the average estimated loss in market cap for Fortune 500 companies reporting such disruption amounted to a $3.2 billion impact.
And the potential disruptions are numerous.
- The pandemic and trade disputes severely obstructed single-sourcing from China, spurring U.S. producers and distributors of manufactured goods to explore reshoring, near-shoring and multi-shoring strategies.
- Increasing foreign labor costs and structural shifts affecting labor in the U.S., such as better automation, are closing wage gaps and encouraging U.S. manufacturing growth.
- Shorter supply chains allow companies to better meet consumer and business expectations of fast and one-day deliveries.
- Manufacturing closer to the product’s end market minimizes its environmental impact, and addresses ESG expectations, as well as public sentiment favoring “Made in America” goods.
At the same time, the U.S. introduced a number of policies and initiatives designed to hinder China’s industrial competitiveness while encouraging the growth of U.S. industries with tax credits and incentives. Many believe new legislation may aim to reshore the manufacturing of products deemed critical to U.S. national security, such as medicine and medical devices.
These global supply chain trends, combined with the narrowing wage gap and protectionist legislation are also making the U.S. more attractive as a Foreign Direct Investment (FDI) destination for companies that want to sell their products in the U.S.
Texas in particular is a top global destination for FDI, with 32 foreign trade zones and more than 1,500 foreign corporations with ongoing operations in the state. In fact, the Lone Star state attracts more FDI than any other state in the nation and is ranked as the #1 FDI Project State for 2020, according to Site Selection Magazine.
The Houston region continues to be the top Texas destination for inward FDI, accounting for 38% of the state’s FDI projects over the past five years. And, within the greater Houston area, centrally located Waller County is well positioned for companies looking to locate operations to exploit opportunities to serve not only the state’s largest metropolitan area but fast-growing Austin and San Antonio demand centers.
Low cost-of-living and reduced tax burden, combined with an in-demand skilled workforce, strong incentive programs, and affordable land creates a welcoming environment for their ventures. Thanks to a strategic partnership with Port Houston, Waller is only the second Houston-area county to be included in the Foreign Trade Zone 84. Primary benefits, including import duty and tariff savings, await early movers.
With its strategic location along U.S. 290 between Houston and Austin, railroad access and proximity to Port Houston and area airports, Waller County continues its steady industrial and residential growth of the last few years. City of Waller attracted investment from companies such as Japan-based Daikin, the largest manufacturer of heating, cooling and ventilation equipment in the world, which built the second largest manufacturing plant in the nation in the area. Waller County is also home to North American headquarters for such well-known European companies as Burckhardt Compression, Grundfos, and MAN.
Recently, Wolff Companies announced the acquisition of an additional 43 acres of land fronting U.S. 290 in Waller County. Together with the 521 acres in the original Beacon Hill development, the acquisition will create a 564-acre master planned environment.
Wolff Companies’ Beacon Hill has over 6,000 feet
of freeway frontage on U.S. 290.
The business park on the 251 acres abutting the freeway is well suited for uses ranging from light industrial and distribution to office, multifamily and retail, all supported by utilities and services from the City of Waller. The property is shovel-ready, with storm water detention and drainage, trunk water lines, trunk sanitary sewer and a lift station as well as electrical lines and residential streets already in place.
Long Lake Ltd is developing a master-planned residential community on the remaining northernmost 270 acres of the tract, featuring approximately 870 houses. Model homes now under construction are expected to be open in June 2021. The first residential deliveries are anticipated for summer 2021.
“The availability of large tracts of land, the quality of the local school district, crucial access to utilities and improved mobility have placed Waller County in the path of growth, not unlike the opportunity we saw years ago along I-10 in The Energy Corridor. We expect the pace of development in the area will increase steadily now that U.S. 290 construction is complete and we introduce new commercial sites in Beacon Hill,” said David S. Wolff, Chairman and President of Wolff Companies, who locally is recognized as the developer responsible for creating Houston’s Energy Corridor.
In October 2020, Wolff Companies announced an agreement with the Texas Department of Transportation to create significant access improvements to U.S. 290. Beacon Hill Boulevard construction is underway and expected to be completed in September 2021. Construction on the freeway interchange is expected to start in Spring 2022 with completion in 2022. The interchange project is funded through a public-private partnership between Wolff Companies, TXDOT and the Beacon Hill Municipal Utility District (Waller County MUD #33), with Wolff Companies providing the majority of the capital as well as the right-of-way for the project.
“Disruption is an act of creation,” Wolff said. “And creating new futures is what we have always created for our strategic land buyers, and for those they will employ in our communities.”