Baytown, Texas

The investment continues

Business View Magazine interviews Rick Davis, City Manager of Baytown, Texas, for our focus on Growth & Economic Development in U.S. Cities

When the new Republic of Texas was in its infancy, economic development in the area now known as Baytown mostly depended upon rice farming and the growing number of brickyards that scraped high quality clays found along the bayous, creeks, and streams. Then in 1908, there was an oil boom which spurred the rapid growth of the Goose Creek community along with those of Wooster and Pelly. Together, they were incorporated as ‘Baytown’ under new charter on January 24, 1948.

City Manager Rick Davis

“Baytown housed engineers, oil workers, and executives of Humble Oil, which was the predecessor of Exxon,” explains City Manager Rick Davis. “So, we are the birthplace of Exxon. And as Houston’s population continued to grow, the East side, where we are, has obviously diversified in terms of the motivations that people have for living in Baytown.”

Industry in Baytown eventually morphed the function of oil and gas from what was once an upstream-focused community to a downstream “petrochemical hub.” According to Davis. “What we’re known for today are the byproducts of oil exploration – particularly ethane gas, which is used to create plastics. Now, our industry is focused primarily on petrochemicals including plastic manufacturing. Exxon currently operates one of the largest petrochemical facilities in the world right here in Baytown. The Gulf Coast itself is responsible for an approximately 85% share of petrochemical production globally. As a result, Baytown has become a very important place in terms of the U.S. economy, when you consider that a third of your automobile is made of plastics and other petrochemical-related products that had their birthplace somewhere in the Gulf Coast… likely right here in Baytown.”

Baytown is proud of its global partnerships with Exxon Mobil, Chevon Phillips Chemical, Enterprise Products, and Covestro – alliances that are shaping the city’s future and status as one of the nation’s premier places to live, work, and play. At present time, there are more than 90 petrochemical companies in operation in the Baytown area.

“In the last 15 years, Baytown’s population has gone up by about 20,000, to where we’re now a city of 85,000 people,” Davis reports. “Jobs have just exploded as a result of petrochemical manufacturing because there remains an insatiable appetite for plastics and polyethylene-related products. Probably the largest growing industry in Baytown has to do with logistics – moving products out of the Houston port. One of the most significant developments in town is a port facility called TGS Cedar Port, and there you have million-square-foot warehouses containing products that are shipped all over the world.”

Current distributors include Home Depot, IKEA, and Red Bull. It’s an impressive list that keeps growing as the area’s general business prospers.

“NRG Energy is another corporate partner out our way,” Davis continues. “They’re a very large consumer services company. We also have Katoen Natie (KTN), they’re a Belgian firm. They operate in excess of five million square feet of logistics here in Baytown. So, not only do we produce a lot in Baytown, but a lot of inventory produced elsewhere eventually finds its way here in preparation for being shipped out to the world. From here, they’re loaded on trucks, on barges (if they’re being transferred to the Houston port, where they get on a much larger ship), rail, air, every means of transportation imaginable seems to have their meeting here in Baytown.”

By way of context, he mentions that the Houston area accounts for about 6% of the U.S. GDP – an astounding figure. “To say that the Houston area is important is an understatement. Baytown is more or less the post office in all of this, the distribution point for much of the domestic product.”

On the residential side, between 3,000 and 5,000 homes have consistently been at some stage in the development process since 2015. There are currently about 10 major subdivisions in development in the Baytown area alone. “We’ve also seen a consistent improvement in the quality of housing that developers are willing to build here,” Davis insists. “Once upon a time, these companies might have assumed that this was mostly a blue collar job haven, that only affordable housing could ever be marketed in our city. There has been a paradigm shift, with local builders realizing that the average petrochemical job exceeds $125K per year in salary and benefits. So, we do not have blue collar jobs in Baytown, we have gold collar jobs. There is plenty of disposable income in Baytown and a willingness and desire to buy housing that is elevated from where it once was.”

Baytown has witnessed a gradual appreciation of its median house value, with some development occurring in the southern extreme part of the city and its most robust residential growth happening in the north end. “We’ve seen companies like Lennar, which is a Friendswood product, and other prominent developers come into town and build not so much subdivisions anymore, but communities,” Davis shares. “A lot of elements that weren’t part of a typical subdivision – trails, lakes, recreational facilities, etc. – are now being re-introduced in Baytown, so that’s very encouraging.”

A developer’s plan has also recently been released for the proposed T-36 at Baytown golf course, at the former location of Evergreen Point where construction just started on the project. “This would be an innovative configuration using a new geometry to develop 18 holes on only 105 acres, which is less than half of the acreage usually needed for that kind of a course,” Davis explains. “We’re talking about a PGA-certified course. The city has agreed to invest $6M and it will be operated by a premier golf development company called Landscapes Unlimited (LU), who were involved with Torrey Pines in San Diego. They’ll actually be working alongside Ric Buckton, another renowned golf developer, and we’re just thrilled to have them as partners.”

Years ago, the city attempted to rehabilitate the old Evergreen Point golf course through a voter initiative, but it was defeated by less than 60 votes. So, they decided to preserve the property and look for a more bespoke solution. “Now we have one,” Davis says. “We believe we’re going to have a destination golf course that people from all over the globe are going to want to come to. It’s the first of its kind in the world. It’s so unique that they’re filming a six-part documentary series that will be sent to national and regional sports networks.”

Another major area of capital improvement in Baytown involves the new Fire Training Field and Center. The $8M phase III project, which is currently under construction, will add a training administration and classroom facility to complement the existing burn building, tower, rappelling walls, and confined space props. “These new builds will host jurisdictions from all over the country to come get certified, take classes, and engage in continued learning,” notes Davis. “We also have an industrial firefighting component which is, I think, the most interesting one. This is a facility that is intended to simulate industrial fires, similar to the one that exists at Texas A&M University in College Station. That one is receiving its final tweaks and we have faith that it’s going to be a resource for industrial firefighting units and other jurisdictions for decades to come.”

Committed to building a healthy and safe community that serves the needs of all residents, Baytown is also investing in a $68M project to build a state-of-the-art fleet facility and 105,000 square foot police station and fire administration building to sit on the site where their current police station resides. “There is not a single dollar of tax-payer burden associated with this project,” Davis announces. “It was funded through an economic development agreement with Enterprise Products, and it is a true partnership between the company and the city. It’s a win-win agreement that provides Enterprise with a very business-friendly environment for them to continue to invest in our community and gives us a much needed facility for our emergency responders.” Phase I, which is the fleet facility, is slated to be occupied by November 2022. After that, the city will “march immediately” into the construction of the main building, Phase II.

“In terms of the future, I think it’s incredibly bright for Baytown,” Davis concludes. “There are several large investments that companies want to continue to make in Baytown. I tell people that I had to wait to come to Baytown to even use the word ‘billion’, but that’s the level of investment that is happening here. One of the best things to happen to us is a concept that many are gravitating to right now regarding environmental stewardship. A lot of companies are investing in carbon recapture, recycling, and blue energy. They are beginning to discover that there is a lot of profit associated with some of the alternatives to the traditional industrial methods. Baytown’s role in this will likely mirror that of its past – an energy-industrial hub for those cleaner, greener industries.”

AT A GLANCE

Baytown, Texas

What: A family-friendly community and manufacturing hub; population 90,000

Where: Southeast Texas on the northern side of Galveston Bay

Websites: www.baytown.org        www.Seizebaytown.com