2022 Is Off To A Good Start For Oft-Overlooked Houston, But Some Doubt It Can Be A Headquarters Hub
After years chasing the coattails of central and north Texas in the corporate relocation race, there is a nugget of good news for Houston so far in 2022: According to YTexas, which tracks the influx of corporate newcomers to the state, 25% have gone to the Bayou City since January, and they are coming in industries it has vied to attract like sustainable energy (Archaea Energy) and smart electric vehicle charging (Noodoe EV).
Less than halfway into the year, Houston has already attracted as many companies as it did in all of 2021, though the sample size is smaller than usual. The pace of Texas relos has slowed considerably so far this year — just 12 companies have announced plans to move to the Lone Star State in the first six months of 2022, versus 62 in 2021.
While Houston's tally so far this year is reason for optimism — as is new data indicating the city is home to the highest number of Fortune 500 companies in the state for the first time in a decade — experts are divided on whether Houston will really make its name as a headquarters hub.
In recent years, Houston has lagged behind Austin and North Texas. Four companies moved to Houston in 2021 compared to 29 in Central Texas and 27 in North Texas, according to a new report from YTexas, which also advertises Texas for corporate relocations.
But those numbers still added enough to the list of large Houston companies, mostly oil and gas giants, to bump the city up to the top Texas city on the Fortune 500 list. Taken with the 2020 announcement that Hewlett Packard Enterprise would move to Houston, YTexas CEO Ed Curtis is rosy on the future of Houston.
"Houston is a tech town. It is more of a tech town now than I think people may have thought it was in the past. Energy and healthcare, import/export business, infrastructure, is all centered around technology," Curtis said. "I think that's a big part of what I see as the future growth of more corporate relocations, and businesses coming to Houston than maybe what you've seen in the past."
For years, Texas has inched its way into the national spotlight, nabbing high-profile headquarters like Tesla, CBRE, HPE, Oracle and more. Those companies are incentivizing new startups and other company relocations, and Curtis thinks more companies will follow HPE in coming to Houston.
"Houston's just sort of legacy companies and legacy industry," Goldsmith said. "It's always been seen as an industrial town. Oil and gas, the Port, are driving industry, [Houston is] not necessarily a headquarters town."
Goldsmith says that the vast majority of community growth tends to come from existing industries, like oil and gas in Houston, whereas a much smaller percentage is from new-to-town companies.
"You will find success by sticking to what you do best and focusing on the assets that you do have, continuing to nurture those assets, nurture your existing industries, and they will continue to grow," Goldsmith said. "I don't think that the inability or weakness in recruiting Tesla's headquarters, or anybody else, is going to negatively impact your economy."
Houston has spent years trying to pull away from its image of a one-industry town. In March, it launched a multipart plan to draw on existing Houston businesses to grow and attract new corporate headquarters from elsewhere in the U.S. The city previously promised Amazon $268M in tax incentives to build a headquarters there, only to not even make the shortlist.
HPE moved into its Spring campus earlier this year, and Curtis is excited about recent announcements like DarkPulse, a New York temperature monitoring company, which announced it would move to Houston earlier this year. Increased attention on space programs, too, is catching his eye.
"There's a lot of activity. A lot of companies moving and expanding," Curtis said. "It's just not a big headquarters relocation announcement, which I think puts the numbers that we've put out for Houston a little deceiving, because there's a lot of activity in Houston. It just doesn't happen to be these big headquarter relocations."
Those, he added, "will come down the pike soon."