Industry

[J.A.S.O.N.]

Tourist based ecomonies are typically fragile, and Galveston's is no exception. With UTMB (our counties largest employer) struggling and laying off workers, I got to thinking about what would really happen to Galveston or non transient Galvestonians if the University left the island. The status quo isn't all that great even with American National and UTMB.

Does anyone think Galveston should or even could find ways to diversify its ecomomy? Also, with what type of industry? I realize that many of you think of Galveston exclusively as a vacation spot, but there are many of us that live, work, and play here on a full time basis.

[aslowdodge]

Tourist based ecomonies are typically fragile, and Galveston's is no exception. With UTMB (our counties largest employer) struggling and laying off workers, I got to thinking about what would really happen to Galveston or non transient Galvestonians if the University left the island. The status quo isn't all that great even with American National and UTMB.

Does anyone think Galveston should or even could find ways to diversify its ecomomy? Also, with what type of industry? I realize that many of you think of Galveston exclusively as a vacation spot, but there are many of us that live, work, and play here on a full time basis.

I don't know if galveston is big enough to support anything else. If you want to diversify the economy I would imagine you would want something that brings in money and provides good paying jobs- not some industry that pays low wages.

I think Galveston should do what it does best and strive to do it better. If they try to change, they start from ground zero. With tourism it seems they have done well to bring it up. What they should do is bring it up more. Make it so it stands out from other tourist spots so people always want to come back. That would help make the tourism more resilent to low times. I think they have the momentum going, they just need to keep it up

[TheNiche]

Tourist based ecomonies are typically fragile, and Galveston's is no exception. With UTMB (our counties largest employer) struggling and laying off workers, I got to thinking about what would really happen to Galveston or non transient Galvestonians if the University left the island. The status quo isn't all that great even with American National and UTMB.

Does anyone think Galveston should or even could find ways to diversify its ecomomy? Also, with what type of industry? I realize that many of you think of Galveston exclusively as a vacation spot, but there are many of us that live, work, and play here on a full time basis.

They've got several problems with trying to attract diversified firms. 1) Distance to airports, 2) Distance to other firms within related industries, 3) Smaller labor pool, 4) Higher costs of housing in many instances, and 5) Disaster risk. I think that you'll see some expansion of small businesses as Galveston builds up and out, but it'll be secondary employment for the most part.

They should leverage the competitve advantage that they've got.

[rhino]

I agree with aslowdodge that tourism has to stay part of the equation. I'd even like to see them play up the convention business more, although I realize they have to do some convincing that Hobby airport isn't that far of a drive. Also, one would think that Galveston's Mardi Gras would be more compelling in light of the continued hurricane issues in New Orleans, but it sounds like the Galveston Mardi Gras has been struggling the past few years. I've never been to it though and only know what I read in the paper.

One thing Galveston should do is make better use of the port. I've been following the sad saga of the Galveston port and its relationship with the Houston port. Considering how busy the Houston port is, it only makes sense that there should be opportunity for Galveston's port to grow as a secondary Gulf coast port. From what I've seen, longshoremen make really good money, and there are related jobs in warehousing, freight transfer, etc. I think that's a logical industry for Galveston.

[aslowdodge]

I did notice a convention center that looked pretty nice and wondered if they have a lot going on there. Does anyone know?

Maybe Galveston could do a mass marketing blitz on regional tv and other media to create more tourism.

The Niche pretty much said what I was thinking about attracting business but I couldn't organize my thoughts as well as he/she did.

[islander]

Rhino is exactly right when it comes to the Port of Galveston. Ok, not to be Polly Positive all the time, but Galveston is ranked the 3rd busiest cruise terminal in the US and recently inked deals with the Port of Houston to work collaboratively on several projects. So, I think that the recent turn of events between the two ports has improved their relationship and the Port of Galveston is actually becoming more profitable each month.

One thing that should help with the improvement of the tourism/convention industry is the recent discussions about the improvements to the municipal golf course, off of 99th Street near Campeche Cove and across from Evia. Moody Gardens is supposed to enter into a public/private partnership witht he city and sink $6-7 Million into the course - the paper said it should happen around February 1. If that happened, the island can start to attract larger conventions because you MUST have golf!!! So, this could be huge for the island as a whole!

[J.A.S.O.N.]

Thanks for the replies guys! Anyhow, I didn't mean to imply that Galveston should take tourism out of the equation. That would be well......stupid lol.

Islander, I have to agree with you on the Port of Houston/Port of Galveston issue. The attitude of "Us against Houston" is no longer relevant, Houston is much too large and iinfluential. Galveston would continue to only hurt itself with such an attitude. Thank goodness Port Director Cernak realizes this and is getting us back in the "game" (so to speak).

What I am wondering is can this type of cooperation between Houston and Galveston translate to other industries. If Galveston can't draw the headquarters, then how about satellite offices? Could Galveston become Houston's link to southern Galveston County?

[TheNiche]

What I am wondering is can this type of cooperation between Houston and Galveston translate to other industries. If Galveston can't draw the headquarters, then how about satellite offices? Could Galveston become Houston's link to southern Galveston County?

There's just not much in southern Galveston County to serve with satellite offices, is the thing. Even Texas City/La Marque would in many ways be superior in terms of location because it could serve Galveston as well as Dickinson and League City, whereas from Galveston, anybody needing to go off the island to do anything on the mainland has to travel at least seven miles just to get from 61st Street to Highways 6 and 3, much less to get into town. That's a problem...well that, and that Galveston doesn't necessarily want a big commuter population because it would cause congestion on the bridge that could hurt tourism after a while.

The addage that small can be better applies much better to Galveston than to Houston.

[J.A.S.O.N.]

There's just not much in southern Galveston County to serve with satellite offices, is the thing. Even Texas City/La Marque would in many ways be superior in terms of location because it could serve Galveston as well as Dickinson and League City, whereas from Galveston, anybody needing to go off the island to do anything on the mainland has to travel at least seven miles just to get from 61st Street to Highways 6 and 3, much less to get into town. That's a problem...well that, and that Galveston doesn't necessarily want a big commuter population because it would cause congestion on the bridge that could hurt tourism after a while.

The addage that small can be better applies much better to Galveston than to Houston.

I guess you are right, the population just doesn't call for it. I just thought that since this trek is made by those that have to handle county business anyhow, (being that Galveston is the county seat) downtown Galveston would be a great place to concentrate offices. There is already a mix of ANICO, UTMB, the regional offices of United Fire Group, small law firms, and other financial institutions, (Merrill Lynch, Moody National, BOA, etc...) more so than anywhere else in the county.

[plumber2]

Galveston has lost several big industries through the years, Falstaff Brewery, Cotton Concentration, Todd Shipyards, Lipton Tea, American Indemnity, St. Mary's Hospital, to name a handful. With fewer and fewer (non tourist) private employers on the island, it sets up a dwindling cycle of diminishing returns. The low wage tourist industry can not sustain the econonmy in Galveston. ANICO, being the largest private employer in Galveston, is only located there because of the immediate Moody family, Once Robert Moody retires as head of ANICO and Moody National Bank, the urge to relocate corporate offices to South Shore Harbor or further inland will occur. A large amount of employees working in Galveston drive in from the mainland communities because of affordable housing and schools. Crime, or the perception of crime, also deters many from choosing an island neighborhood over a mainland neighborhood.

[J.A.S.O.N.]

Galveston has lost several big industries through the years, Falstaff Brewery, Cotton Concentration, Todd Shipyards, Lipton Tea, American Indemnity, St. Mary's Hospital, to name a handful. With fewer and fewer (non tourist) private employers on the island, it sets up a dwindling cycle of diminishing returns. The low wage tourist industry can not sustain the econonmy in Galveston. ANICO, being the largest private employer in Galveston, is only located there because of the immediate Moody family, Once Robert Moody retires as head of ANICO and Moody National Bank, the urge to relocate corporate offices to South Shore Harbor or further inland will occur. A large amount of employees working in Galveston drive in from the mainland communities because of affordable housing and schools. Crime, or the perception of crime, also deters many from choosing an island neighborhood over a mainland neighborhood.

If ANICO moves from Galveston, this also means people from Galveston, Hitchcock, Texas City, and LaMarque will have to drive all the way to League City.

plumber2, do you think our city leaders should do something (anything) to reverse the status quo of diminishing returns? Those companies that you listed should still be here. Why isn't there a proactive approach in Galveston to lure industry or their subsidiaries to the island? Can focusing on tourism alone be benficial to Galveston? plumber2, you even said that tourism alone will not sustain the island. I read stories all the time of cities along the gulf coast like Mobile, and others of "company x" moving into its downtown, or a car manufactuing plant choosing the city. Why not Galveston? Why not at least put yourself in the race? I understand that there are problems here, but are they so beyond help that Galveston should accept its fate as a "one trick pony" (or two if you consider the port). This is something the city is going to have to accept for the first time in its 171 year history if ANICO or UTMB leave. Could maybe a collaborative effort between the public and private sector make a push to turn things around for the better?

[TAK]

I read stories all the time of cities along the gulf coast like Mobile, and others of "company x" moving into its downtown, or a car manufactuing plant choosing the city. Why not Galveston?

Mobile isn't an island, the 4th largest city in the nation isn't 50 miles away, but it's proximity to other cities/states is decent, and there are multiple shipping routes out of Mobile to the rest of the country.

The only thing Galveston and Mobile have in common is that they are on the Gulf. (FYI, there are no car manufacturers in Mobile, AL).

Imagine you are CEO of a large company. Let's say, manufacturer of (whatever - cars, computers, widgets...) Even without weather concerns, why would you, as CEO of Acme Widgets, choose to put a plant in Galveston when you could go on to the mainland and get a larger pool of workers (and more education for your white collar types), cheaper land for your plant (and for your employees, so you don't have to pay top dollar), better access to suppliers, a larger port facility, closer to airports and other infrastructure, more than one route out of Galveston (how do you truck supplies in or goods out if the causeway is shut down?!), etc.

There are real reasons plants (at least auto) are being built inland in Texas and Alabama - mainly cheap land, labor, transportation options, and favorable tax treatment.

As much as I would like to see lots of non-tourism business in Galveston, I consider it a bad business move as there is a better alternative - which is pretty much how the Houston / Galveston dynamic came to be what is.

As stated by many others, Galveston needs to be Galveston. It should be THE FIRST THOUGHT when anyone in Texas wants a quick beach get-away, and it should be on the list when mid-westerners want a beach local that is easy to get to, and isn't over-priced, over-chintzy, and over-run by wanna-be models and fake drug dealers.

If I ran Galveston, all of Texas would hear about the projects going on - all the time. I'd be working to do whatever I could to get another major, hassle-free route in/out of SW Houston (HWY 6?) I would give out vouchers for one free hotel night and one free ticket to Schlitterban and Moody Gardens to all of Pearland, Missouri City, Sugarland, Katy.... San Antonio, Austin, Dallas... The Fertittas and I would have gambling, partying, and restaurant boats in and out of Galveston every weekend... The beaches would be CLEAN CLEAN CLEAN. The water might still have the brown tint (not much we can do about that) but everything else would be clean. Gotta truck in clean sand? Truck it in. Have to park tractors or 4 wheelers along jettys to clear out seaweed or whatever? Done.

And we wouldn't have to raise property taxes. Visitors would pay for it all. An island should know, "A rising tide lifts all boats" or "If you build it, they will come." Well, it's being built, but if you don't tell them about it, they won't come. If it weren't for HAIF, I would have no idea about the projects coming to Galveston (thanks everyone!).

The way I see it, there are people who may say they want to see visitors in Galveston, but they don't REALLY want to see visitors in Galveston, because there are far too many roadblocks (politics?) and not nearly enough investment in marketing what Galveston really offers (considering changing the name to "Galveston Island"?!?! Duh-umb)

Galveston, call me when you're really ready to get YOUR industry going, and we will make it happen.[/rant]

[J.A.S.O.N.]

Mobile isn't an island, the 4th largest city in the nation isn't 50 miles away, but it's proximity to other cities/states is decent, and there are multiple shipping routes out of Mobile to the rest of the country.

The only thing Galveston and Mobile have in common is that they are on the Gulf. (FYI, there are no car manufacturers in Mobile, AL).

Imagine you are CEO of a large company. Let's say, manufacturer of (whatever - cars, computers, widgets...) Even without weather concerns, why would you, as CEO of Acme Widgets, choose to put a plant in Galveston when you could go on to the mainland and get a larger pool of workers (and more education for your white collar types), cheaper land for your plant (and for your employees, so you don't have to pay top dollar), better access to suppliers, a larger port facility, closer to airports and other infrastructure, more than one route out of Galveston (how do you truck supplies in or goods out if the causeway is shut down?!), etc.

There are real reasons plants (at least auto) are being built inland in Texas and Alabama - mainly cheap land, labor, transportation options, and favorable tax treatment.

As much as I would like to see lots of non-tourism business in Galveston, I consider it a bad business move as there is a better alternative - which is pretty much how the Houston / Galveston dynamic came to be what is.

As stated by many others, Galveston needs to be Galveston. It should be THE FIRST THOUGHT when anyone in Texas wants a quick beach get-away, and it should be on the list when mid-westerners want a beach local that is easy to get to, and isn't over-priced, over-chintzy, and over-run by wanna-be models and fake drug dealers.

If I ran Galveston, all of Texas would hear about the projects going on - all the time. I'd be working to do whatever I could to get another major, hassle-free route in/out of SW Houston (HWY 6?) I would give out vouchers for one free hotel night and one free ticket to Schlitterban and Moody Gardens to all of Pearland, Missouri City, Sugarland, Katy.... San Antonio, Austin, Dallas... The Fertittas and I would have gambling, partying, and restaurant boats in and out of Galveston every weekend... The beaches would be CLEAN CLEAN CLEAN. The water might still have the brown tint (not much we can do about that) but everything else would be clean. Gotta truck in clean sand? Truck it in. Have to park tractors or 4 wheelers along jettys to clear out seaweed or whatever? Done.

And we wouldn't have to raise property taxes. Visitors would pay for it all. An island should know, "A rising tide lifts all boats" or "If you build it, they will come." Well, it's being built, but if you don't tell them about it, they won't come. If it weren't for HAIF, I would have no idea about the projects coming to Galveston (thanks everyone!).

The way I see it, there are people who may say they want to see visitors in Galveston, but they don't REALLY want to see visitors in Galveston, because there are far too many roadblocks (politics?) and not nearly enough investment in marketing what Galveston really offers (considering changing the name to "Galveston Island"?!?! Duh-umb)

[rant]Galveston, call me when you're really ready to get YOUR industry going, and we will make it happen.[/rant]

How about improving upon some of those things you mentioned TAK? Favorable tax treatment and better transportation options. I'm certainly not suggesting that Galveston create industry, but use Houston as a catalyst and to its advantage (as the city is doing now with its port). Most would agree that a diversified economy is better than a single one. I don't suppose I would raise these kinds of questions had Galveston not at one time harbored more industry. The fact of the matter is that Galveston has never been a "Key West", but more of a "New Orleans" in respect to industry. A tourist town that "works". Certainly, Galveston should build itself up to be the best tourist destination it could be, but would that alone be good for Galveston and Galvestonians? (I never said Mobile had a car manufacturing plant, I apologize for the mix up )

I case you are thinking that everything you typed has went over my head, it hasn't. Defying logic in this instance doesn't make good for the "bottom line". I understand that Galveston may not be the most ideal place to do business, but we could certainly make it more desirable. I can't help but wonder sometimes what Galveston's downtown would look like had Mitchell Energy & Development, and Landry's Restaurants Inc. decided to headquarter here like the Moody's Amercian National Insurance and Moody National Bank.

[editor]

Maybe Galveston should pass some rules to attract the banking industry. It could use "offshore, but still legal" as its slogan (just kidding). But maybe some rules similar to the ones that attracted all of the credit card companies to Delaware, South Dakota, and Nevada. It's all computers anyway these days, so even if a hurricane strikes you don't really lose anything since it's all in redundant data centers scattered around the country.

Seems both recession-proof and weather-proof, plus it's pretty non-polluting.

[TAK]

But maybe some rules similar to the ones that attracted all of the credit card companies to Delaware, South Dakota, and Nevada.

Those states don't actually have the company HQs, they just have a registered agent there (usually a company who provides this service), allowing the companies to use the states very friendly banking laws and very easy incorporation - including not paying taxes in those states. For example, 50% of the companies on the NYSE are Delaware companies, but most don't even have an office in Delaware.

Editor, I agree somewhat that Galveston could be a working port, but even your example - New Orleans, which is a major industrial city with regards to oil and cargo/shipping - is an economy dominated by tourism, to the tune of about $5B a year pre-Katrina. If Galveston were to build up it's tourism numbers, it would have more ability (that is, more eyes) to market it.

[J.A.S.O.N.]

Those states don't actually have the company HQs, they just have a registered agent there (usually a company who provides this service), allowing the companies to use the states very friendly banking laws and very easy incorporation - including not paying taxes in those states. For example, 50% of the companies on the NYSE are Delaware companies, but most don't even have an office in Delaware.

Editor, I agree somewhat that Galveston could be a working port, but even your example - New Orleans, which is a major industrial city with regards to oil and cargo/shipping - is an economy dominated by tourism, to the tune of about $5B a year pre-Katrina. If Galveston were to build up it's tourism numbers, it would have more ability (that is, more eyes) to market it.

I agree!

[TAK]

I meant JASON... That's what I get for trying to combine replies. My mind is too simple to write replies to two people and get their names correct.

[J.A.S.O.N.]

I meant JASON... That's what I get for trying to combine replies. My mind is too simple to write replies to two people and get their names correct.

LOL, I knew what you meant.

[Stephen]

Doesn't Galveston have a new highrise condo going up on the east end? And isn't development booming on the west end? And aren't a number of highrises and other condo-type properties being rehabbed along the seawall? To me this spells a new increased demand for services, presuming those residences are filled... What nags me about Galveston is the obvious but usually unacknowledged poverty that pervades much of the island. I don't know what employment statistics are for the island, but presuming that they are low, many of those jobs must be pretty low-paying. I think Galveston needs to do more to build a homegrown workforce for the service economy it's going to need before much longer. Otherwise, it'll have to import labor from the mainland at a premium, and at the expense of its denizens which it could otherwise employ.

[houstonfella]

Add some gambling and Galveston is definitely a destination. But.... will Texas EVER come around? I love video poker; I don't spend more than fifty bucks when I play, but you can sit there and drink and enjoy for two or three hours and sometimes walk out with more money than you brought in. Gulf Greyhound is ideal. Galveston is ideal.

Reality: it probably won't happen. We Texans spend our money in Louisiana. They love us there and why shouldn't we support Arcineaux and Boudreaux.

[aslowdodge]

Add some gambling and Galveston is definitely a destination. But.... will Texas EVER come around? I love video poker; I don't spend more than fifty bucks when I play, but you can sit there and drink and enjoy for two or three hours and sometimes walk out with more money than you brought in. Gulf Greyhound is ideal. Galveston is ideal.

Reality: it probably won't happen. We Texans spend our money in Louisiana. They love us there and why shouldn't we support Arcineaux and Boudreaux.

If you look at the revenue brought in by gambling in Biloxi Ms and how it has changed that area, I don't see why Texas wouln't want that. After seeing my property tax bills it seems like there would be a lot of angry texan homeowners. The money spent in La. would be welcome in texas and possibly make home ownership more of a reality for some if taxes weren't so high.

I do think that casinos are more likely than any mfg plants starting up.

[TheNiche]

Three words: Ricardian Comparative Advantage.

Look it up.

[J.A.S.O.N.]

Three words: Ricardian Comparative Advantage.

Look it up.

No need, I'm an econ major. Btw, I really like your sig!