Even as the pandemic forces many companies to reconsider what the physical office space looks like in a world changed by COVID-19, the Allen Economic Development Corporation is betting on new office and mixed used developments to attract tech companies to the city.
Before the pandemic, the booming Collin County city was seeing its technology job sector growing by nearly 6% year-over-year for the past three years, ranking it 28% higher in tech job concentration than the national average, according to the EDC. Now, it’s looking to continue that growth with new development projects aimed at attracting small- and mid-sized tech companies that can grow in the city.
“We wanted to create a home base where tech employees feel comfortable,” Daniel Bowman, executive director and CEO of the Allen EDC, told NTX Inno. “The idea is... to create an environment where companies can easily recruit top tech talent.”
Late last month, the Allen EDC announced plans to break ground next year on a 105,000 square-foot office project called the Allen Tech Hub, focused on attracting tech companies and located next door to the Watters Creek District. The announcement came on the heels of a similar one in July to create a 2 million square-foot mixed use development called The Farm at Allen in the same area. The city also recently saw the opening of its nearly 1 million square-foot. One Bethany office development.
Together, the projects anchor the EDC’s plans for an office park and mixed use development along Highway 75, similar to ones found in Plano and Richardson. Bowman said that in general cities cooperate with each other to attract companies to the region, though when it gets down to the specific location within the county, they do compete. In recent months, Bowman said Allen has seen interest in tech companies ranging from software to video games to cybersecurity.
“Allen has create a tech hub, an office workforce in the middle of Watters Creek that has all of the tech amenities you expect in a downtown Dallas or downtown L.A., but they are right here in a top-tier suburban environment,” Bowman said.
During the pandemic, the One Bethany project has had about 100,000 square feet of its office spaced leased. However, Bowman said that some companies that were planning moves to the city have been put on hold due to the economic uncertainty created by the crisis. But Bowman thinks that tech office leasing will soon begin to pick up. He said he believes some companies will be looking to relocate or launch from less dense urban areas like, especially as the consider the amount of space that they need and the cost of leasing that space. He added that the North Texas commercial real estate market has been historically strong and that the tech and creative companies the EDC is targeting will likely still need spaces for collaboration.
There have been a number of local tech companies that have recently announced plans to permanently move to work-from-wherever models, such as Bottle Rocket and Asset Panda. However, those companies still plan to retain some office space for when in-person meetings and collaboration are needed.
“I think what most people are saying is, ‘Let’s put off our decision on where we move our companies’ … and my expectation is we do see some positive momentum on solving coronavirus; in 2021 we’ll see all these pent up decisions that were punted this year will come up next year, and we’ll see an onslaught of companies looking at relocations or right-sizing,” Bowman said.
Overall, Bowman said Allen’s draws include its school system, parks and urban planning — characteristics he said will be attractive to tech companies looking to create a live-work balance for its employees. He also said Collin County has a highly-educated workforce. Though, he notes that the city needs to create more urban mixed-used projects to continue to attract small- and mid-sized businesses, which he said are the ones that tend to create the most job growth in a community.
“What you’re seeing now is especially the workforce is looking for quality housing and you’ve got this workforce where they want that walkability, but they want schools for their kids because the fact is you have people in that stage of life,” Bowman said. “In the middle of this pandemic, it’s hard to predict the future but … I don’t believe that our society and culture is going to be fundamentally altered forever by this pandemic in ways that make office space less attractive. I think at the end of the day, for a large number of companies, having that physical presence and having the synergy of having your team and culture in one place is going to be important.”
Other cities in the region have been deploying their own strategies to attract tech talent. In January, the McKinney EDC launched its Innovation Fund initiative, aimed at attracting early stage companies to the city. With requirements like having a minimum number of employees and keeping your business in the city for at least three years, the McKinney EDC hopes it will help to diversify the local economy, as well as develop a high-density innovation ecosystem
Since its creation, the Innovation Fund has been used to provide grants that have attracted healthcare software startup Invene and Italy-based engineering technology transfer company EnginSoft to the city. It has also been used to help health care delivery startup CourMed expand within the city.
“If you look at the studies and you look at where jobs come from, most of the job growth … is going to come from your small- and mid-sized companies than is going to come from just one large company,” Bowman said. “… we are a community that traditionally we’ve seen our growth in our office sector, it’s been a lot of small- to medium-sized businesses. … That’s the bread and butter right there.”
