Authentix, an international company that provides anti-counterfeiting solutions, has had its headquarters in Addison since 2002. But three years ago it moved its Pennsylvania manufacturing operation here as well. It did so for one big reason: the $1 million grant the company was awarded from the Texas Enterprise Fund, Gov. Rick Perry’s key jobs program.
Established by the Texas Legislature in 2003, the $385 million TEF provides public funds to help companies expand or move to this state. As the largest “deal-closing” fund of its kind in the country, it’s given Texas some desperately needed ammunition in its fierce battle with other states for economic development. Says Bill Sproull, president of the Richardson Chamber of Commerce: “It wasn’t until the TEF that Texas had any money to close deals.”
In North Texas, a total of $138.5 million in TEF funds has been awarded to 21 companies so far, accounting for more than 20,000 new jobs. The recipient-companies here include Comerica Inc., which moved to downtown Dallas from Detroit. “The Texas Enterprise Fund helped offset some of the costs of our headquarters relocation,” says Comerica’s Wayne Mielke.
All this may come as a surprise, if you’ve been reading The Dallas Morning News and listening to the Texas gubernatorial candidates, because they’ve been eviscerating the enterprise fund lately. One of Perry’s GOP rivals called it nothing more than a “corporate slush fund” to reward the governor’s business pals; the Texas House Democratic leader said, “It’s definitely not lived up to the propaganda.”
That last quote came from a Morning News story that was inspired by a new report about TEF from an Austin group called Texans for Public Justice. Identified as a “research and advocacy group” in the newspaper, Texans for Public Justice is more accurately a liberal organization that’s funded in part by George Soros, the left-wing billionaire. So, who would have been shocked when the TPJ, via the Morning News, declared its finding that the Texas Enterprise Fund is “falling short” of its promises?
Here’s the problem with that. The “advocacy” group looked at TEF results only in 2008—just as the economy was disintegrating everywhere—and then declared (surprise, surprise) that many of the TEF projects weren’t performing as well as originally projected. It also ripped the governor’s office for amending some of the jobs targets, so the companies wouldn’t be in danger of violating the terms of their agreements.
But, what was wrong with that? Far from underhanded, I’d say that demonstrated flexibility in the teeth of a brutal downturn. Perry’s office emphasizes companies had to be in compliance with the terms of their pacts in order to have them amended.
The experience of Authentix during this tough period is instructive. According to the company’s Cari Weinberg, Authentix preserved cash and moved cautiously in 2008, reducing its operating expenses by delaying hiring, for example. While hiring fewer people meant the company fell short of its TEF job commitment, the delay also enabled it to stay profitable and relatively healthy.
Weinberg says the company started to see signs of a recovery in the last half of 2009, and now is poised to honor its job-creation pledge under its TEF grant. Thanks to the enterprise fund, the company is planning to hire at least 26 new employees this year—a 30 percent increase in its U.S. work force.
And, there’s more. Weinberg says the company was able to double the size of its facility in 2008 by adding another 25,000 square feet, helping it land the biggest contract in its history. Now, sometime in the next six months, it’s aiming to add another 25,000 square feet.
Those are results worth bragging about.