East Texas Business

By GREG JUNEK
Business Editor

A look at 2007 Tyler-Smith County economic statistics indicate the area held its own and thrived in some areas, failing to succumb to some of the downturns parts of the nation experienced.

Tom Mullins, Tyler Economic Development Council president and chief executive officer, gave an overview of how the area fared last year. Mullins presented his report Wednesday at the TEDC's 19th Annual Investors and Contributors Appreciation Luncheon.

Smith County property values increased about 9 percent last year, to nearly $12 billion, representing an increase in valuations and new investments, Mullins said, referring to information from the Smith County Appraisal District.

But many taxpayers are seeing an overall lower tax rate on their properties.

"While property tax values were up about 9 percent, property tax rates in the city of Tyler decreased 13.3 percent, to $1.83 per $100 of valuation," Mullins said. "The city decreased 11 percent and Tyler (Independent School District) decreased 18 percent."

In 2007, the total labor force in Smith County increased to 97,678, and the employment rate continued to remain above 95 percent. Last year it averaged 95.8 percent, up one-tenth of a percentage point from 2006.

Retailers also brought in nearly $3 billion for the metropolitan statistical area, which includes the entire county, showing its strength as a "regional trade center," Mullins said.

"These sales generate critical tax revenue for local units of government throughout Smith County," he said.

Although the number of building permits issued by the city of Tyler declined slightly last year, valuation set a new record - at nearly $340 million. Of that amount, about $185 million was attributed to new residential construction, according to city records.

Home sales, however, did not post an increase over 2006.

"Home sales in Smith County dropped 3 percent last year, which is significantly less, though, than the national drop of 23.4 percent," Mullins said. "The average sale price of a home sold in Smith County fell 1 percent, compared to the 4.6 (percent) decrease nationally."

Burns & Noble's 2007 Office Market Survey, a report the commercial real estate firm prepares annually, showed the office space occupancy rate increased 2 percent, to 90 percent, from 2006. The average lease rate increased 5 percent, to $12.87 per square foot.

NEW PROJECTS

New projects the TEDC supported last year included the Texas Allergy Indoor Environment and Energy Institute (TxAIRE), a consortium of academic, industry and governmental partners formed to improve indoor air quality and reduce residential energy costs, Mullins said.

The University of Texas at Tyler School of Engineering is leading the project, in partnership with The University of Texas Health Science Center at Tyler. They will be joined by local and national partners in the air conditioning industry.

Last year the project was awarded $3.75 million from the Governor's Emerging Technology Fund.

Also last year, Mentoring Minds added 14 jobs to its 35-job base, and retired two loans from the Smith County Revolving Loan Fund, which the TEDC operates.

Hood Packaging received a tax abatement on a $4 million investment for a new production line, allowing the company to retain 109 jobs.

Mullins also reviewed the council's work with the Trane Co. on the construction of a $4 million testing facility, which would create 16 new technology jobs. It was made possible by a four-year abatement by the city of Tyler, Smith County and Tyler Junior College.

Trane has estimated creating about 350 new jobs by the end of 2009, which would increase its total job number to 2,300.

The city of Tyler also granted $125,000 to include a new traffic signal and the installation of additional lanes for entering and exiting Texas Highway 110 outside the plant.

Since 1992, the Smith County Revolving Loan Fund has grown to $2.4 million, Mullins said.

"The loan fund has aided 25 projects that have created 534 primary jobs and leveraged approximately $20 million in bank and equity financing," he said.

Although new jobs are added, others are lost over the years, Mullins said. While the economic development council has worked on projects that retained or created 15,600 jobs since its creation in 1989, the area has lost 6,000 primary jobs.

That number includes the loss of 986 jobs last year at Celebrity Inc., Black Sheep Inc., Goodyear and Tyler Pipe.