Economic Development Programs & Incentives

The Brays Oaks Management District (BOMD) is actively seeking U.S. and international investors and business owners who are interested in starting, expanding or relocating business operations in the Greater Houston Area and are looking for a location and business environment that fits their long term needs and plans. The BOMD is ideally suited for local, district or regional offices and for companies engaged in light manufacturing and assembly, warehousing and distribution of consumer and industrial products, as well as those engaged in a wide variety of consumer, business and industrial services. In addition, in order to provide the residential support for new commercial development, the District is in the process of enhancing and expanding its single-family residential subdivisons which according to some realtors offer the best values in the Houston housing market.

Prime Location

The Brays Oaks Management District is ideally situated in Southwest Houston on the Beltway 8 toll road (South Sam Houston Parkway) which provides excellent access to the Port of Houston, Bush Intercontinental Airport and Hobby Airport. This is particularly important due to the anticipated increase in commercial development along the entire Beltway as a result of the $5.25 billion Panama Canal expansion project which will create a third lane with new locks at both ends resulting in a doubling of total capacity by 2014.  A significant percentage of container and break bulk shipments which up till now have come in through West Coast ports and moved to the Midwest and Texas on the rail “land bridge” are expected to be rerouted through Houston to lower transportation costs. With respect to air cargo, significant improvements have been made to the air freight facilities at Houston Intercontinental Airport (IAH) that enable the largest cargo aircraft to off-load and on-load making Houston an important air cargo gateway. These improvements and the overall growth in the Houston economy are expected to produce annual growth in air cargo volume at IAH of 2.5% through 2020. In addition, Beltway 8 provides quick access to the Energy Corridor (20 minutes) and Westchase (15 minutes) office parks. The BOMD is also served by Houston’s Southwest Freeway (US 59) which connects the District to the famous Uptown/Galleria shopping and office center and Downtown Houston to the northeast, and to Mexico five hours to the southwest. There are plans to upgrade this highway to interstate highway standards by 2021 at which time it will become I-69 linking Mexico, the U.S. and Canada and be known as the NAFTA Highway. The District is also only 15 minutes from Houston’s Texas Medical Center and its renowned hospitals, research universities and medical professional offices via Braeswood Blvd.

Excellent Infrastructure

To access the major roadways described above, the BOMD offers a grid of excellent high capacity streets. These include the east-west streets of Bissonnet, Braeswood Blvd., Willowbend, Bellfort and Airport Blvd., and the north-south streets of Gessner, Fondren and Hillcroft. The District also has an excellent utility infrastructure. The BOMD is inside the City of Houston which has good water, sewer and storm drainage systems that will be upgraded over the next 15 years, with considerable additional capacity available. There are a number of electric power suppliers serving the BOMD, principal among which are Reliant Energy and Texas Utilities who have a full range of options and additional capacity available for new customers.  Gas service is provided by Center Point Energy.

Excellent Business Climate and Support

The BOMD is both national and international in character and business orientation. Matching its population diversity, its business base and leadership are truly international. Though predominantly white and African American, one-third of the population is Hispanic, Turkish and Asian. Owners, managers, consultants and real estate professionals function as recognized lenders in the Houston business community. They not only welcome new investment and businesses to the District, they will actually assist newcomers in getting established. Investors and business managers will find that a strong entrepreneurial spirit pervades the BOMD.

Work Force

The BOMD has a workforce of nearly 50,000 highly motivated hard working men and women that possess a wide variety of skills. Over one-third of these workers are multi-lingual, speaking two or more of the English, Spanish, Turkish, Chinese, Hindi, Urdu and/or other languages.  Many of them currently commute long distances to jobs scattered throughout the Houston metropolitan area and would welcome the opportunity to work within the management district in which they live.

Employer Incentives and Tax Credits

Several state and federal programs available through the Texas Workforce Solutions initiative of the Texas Workforce Commission provide incentives for hiring from certain groups of workers.  For example, a total of $5,400 in benefits can accrue to an employer that hires an unemployed military veteran and obtains a Texas Back to Work subsidy, Work Opportunity Tax Credit and a HIRE (Hiring Incentives to Restore Employment) Act benefit.  Details as follows:

  • Texas Back to Work. Employers can offset the costs associated with hiring and training new workers through the new TWC initiative Texas Back to Work. This wage-subsidy program is funded by the Texas Legislature and administered through 28 Texas workforce boards. When employers hire from a qualified pool of unemployed Texas workers, employers may be eligible to receive up to $2,000 to subsidize part of the wages paid to the newly hired worker. The monthly subsidies are provided for the first four months of employment.  Local workforce business services representatives can help employers identify qualified job seekers and offer recruitment and prescreening of eligible applicants. A brochure with more information on Texas back to work is available on the TWC Web page at www.twc.state.tx.us/news/txback2work.pdf.
  • Work Opportunity Tax Credit. The Work Opportunity Tax Credit (WOTC) is a federal business income tax savings program available to employers who hire from 12 select groups of eligible workers. This tax credit is administered by the U.S. Department of Labor for private, for-profit employers and can represent a direct savings to a business ranging from $1,200 to $9,000 per qualifying employee. WOTC serves as an incentive to select job candidates who may face barriers in their efforts to find employment.

    Within each target group there are specific requirements which must be met. Texas Workforce Commission (TWC) WOTC specialists verify whether newly hired workers meet the eligibility requirements for the tax credit and issue certifications to employers.  Forms to apply for the credit are available on TWC’s WOTC Web page and must be postmarked within 28 days of an employee’s start date. For more information, access the WOTC Web page at www.twc.state.tx.us/svcs/wotc/wotc.html.

  • HIRE Act Tax Benefits. Two federal tax benefits are available to employers who hire unemployed workers through the 2010 HIRE Act which offers Hiring Incentives to Restore Employment. A social security payroll tax exemption on wages paid between March 19 and December 31, 2010 can mean a savings of as much as $6,622 per qualifying worker. The HIRE Act also provides for an income tax credit of either $1,000 for each eligible employee hired after February 3, 2010, and retained for at least 52 consecutive weeks, or 6.2 percent of the wages paid over the 52-week period, whichever is less. While both of these incentives can be applied for each qualifying employee, the HIRE Act payroll tax exemptions cannot be used in combination with the Work Opportunity Tax Credit. For more information, access the Internal Revenue Service HIRE Act Questions and Answers for Employers Web page at www.irs.gov/businesses, then type HIRE Act in the search window.

 

Career and Technical Training

The Houston Community College (HCC), with two campuses nearby, is an excellent source of career and technical training for the District’s growing workforce.

  • Houston Community College System. The Houston Community College System (HCC) has several education and training programs that benefit BOMD employers and their employees. Two campuses are located close to the BOMD – the Bellaire campus at 5601 West Loop South and the Missouri City campus at 5855 Sienna Spring Way in Fort Bend County. Programs of interest are:
    • HCC Corporate College which provides businesses, industry and other organizations on-site training classes. These classes enable employers to get the most from their training expenditures while updating employee skills.  Over 400 courses are offered in business and technical, managerial and supervisory, Spanish and English, Microsoft applications and other fields.
    • HCC School of Continuing Education which provides on campus classes to high school graduates in areas such as business languages, technology, construction, transportation, public safety and health.
    • HCC Apprenticeship Program which is provided through a joint partnership between HCC and the Apprenticeship and Training Association of Texas.  The program offers a 3-5 year job training program for trade and craft apprentices that is supported by employers, employer associations and labor organizations. Under this program, HCC provides classroom production for carpenters, electricians, millwrights, pipefitters, welders, masons, stationary engineers and glaziers.
    • HCC Online Continuing Education Program which offers a wide variety of online courses to employers to assist them in meeting job requirements and improve their levels of knowledge. All courses are web-based and available 24-hours a day, seven days a week. Course lengths vary from 6 weeks to 6 months.
    • HCC Adult Basic Education Program, Supported by federal agents, provide basic reading, writing and mathematics training. English-as-a-second language instruction and General Education Degree (GED) preparation to employees that may not have completed high school are also offered.
    • HCC Adult High School Program provides high school audit classes. Fees are required.
  • The Houston Community College System also provides normal credit courses on campus leading to degrees and certificates. Full information is available on the HCCS website www.hccs.edu.

Properties for Sale or for Lease

There is a wide range of commercial office, light manufacturing, warehouse and distribution properties located in the BOMD that are for sale or for lease, and in some cases both for sale or lease. Both vacant land parcels and improved properties with existing structures are available.  The industrial improved and vacant properties are available in a range of sizes. There are also retail, office and residential improved properties and tracts available for sale. All primary properties for sale or for lease are shown on the attached map with reference numbers corresponding to the properties described on the attached pages with columns provided for price/lease rate and owner/broker contact information. Lease rates and some prices are stated in terms of $/SF (U.S. dollars per square foot). For international investors and business principals wishing to convert $/SF to their currency denomination per square meter, multiply the $/SF amount by the current USD exchange rate. Then multiply the result by 10.8. As an example, a Chinese investor or business owner interested in an industrial building with an asking lease rate of $0.50/SF/Mo. ($0.50/square foot/month) wanting to convert that rate to Yuan Renminbi per square meter with a current exchange rate 6.50 ¥/USD would multiply the quoted rate times 6.50 and that amount by 10.8 to arrive at the equivalent asking rent of 35.10 ¥/M2 ($0.50 x 6.50 ¥/USD x 10.8 SF/M = 35.10 ¥/M2).

Federal EB-5 Program

Under a federal government program administered by the U.S. Citizenship & Immigration Services that is becoming more and more popular, wealthy individual foreign nationals that have financial means and an interest in making business investments in the U.S. can obtain permanent resident status over time through what is known as the EB-5 program. Harris County, in which Houston is located, has been designated as one of 42 counties in the U.S. authorized to offer this program. Except for a small area east of Downtown Houston where there is high unemployment and a lower investment requirement, a minimum capital investment of $1,000,000 in a “new commercial enterprise” that will create 10 full-time American jobs within two years is required. The investor need not be involved in the day to day operations of the enterprise but must be engaged in its general management. If one is able to meet these conditions, he is able to obtain conditional residence status and receive a “green card” valid for that period. If, at the end of that period, the investor is able to prove that $1,000,000 has actually been invested in the concern and 10 jobs have been created, or maintained if they were to be otherwise lost, he or she becomes eligible for permanent resident status. Additional conditions are that the legal structure of the enterprise must comply with EB-5 regulations and the investor must prove that the funds invested were derived from legal activities.

The services of a qualified U.S. immigration attorney are required to assist in devising the proper legal structure. The BOMD can provide contacts to several reputable lawyers for this purpose. One of the difficulties some investors have is proving that their investments have been made in “new commercial enterprises”. A “new commercial enterprise” can be created in one of three ways, as follows:

  • Establishing a brand new business.
  • Acquiring an existing business and undertaking significant restructuring or reorganization.
  • Expanding an existing business. This option requires the investor to prove not only the creation of 10 new jobs over two years but also an increase in net worth or the total number of employees of the business by at least 40%.

One attractive aspect of the EB-5 Program is that not only does it provide a path to permanent resident status to foreign nationals that wish to relocate to, or maintain a second residence in, the U.S. but also an opportunity to enhance personal incomes and earn fair returns on their investments. This appeals to wealthy individuals who may wish to achieve geographic diversity in their investment portfolios to lessen the risks that may be associated with total or primary dependence on future economic and political conditions in their current countries of residence.

State of Texas Incentives

The State of Texas offers a number of funds and programs to encourage investment and job creation in the state. These programs are managed by the Governor’s Office of Economic Development & Tourism in Austin.

  • Texas Enterprise Fund. This fund is designed to stimulate the development of significant new industrial and commercial projects that will enhance the state’s economy. Projects must have strong economic impacts and provide an attractive rate of return to the public. Applications must disclose the amount of wages generated, financial strength of the company, business history, a business sector analysis, and local government and private support for the projects concerned. All applications require the approval of the Governor, Lieutenant Governor and Speaker of the Texas House of Representatives. Cities are limited in the number of enterprise projects being funded at any time. In the case of Houston, it is six (6) projects.

    Companies developing approved enterprise projects are eligible for refunds of state sales taxes, currently 6.25% on purchase prices, paid for building materials, machinery and equipment, electricity, natural gas, consumed in the normal course of business depending on the amount of the investment and number of jobs created or retained as follows:

    • For investments of $40,000 – $399,999, refunds are $2,500 per job up to 10 jobs.
    • For investments of $400,000 – $999,999, refunds are $2,500 per job up to 25 jobs.
    • For investments of $1,000,000 – $4,999,999, refunds are $2,500 per job up to 125 jobs.
    • For investments of $5,000,000 – $149,999,999, refunds are $2,500 per job up to 500 jobs.
    • For investments of $150,000,000 – $249,999,999, refunds are $5,000 per job up to 500 jobs.
    • For investments of $250,000,000 or more, refunds are $7,500 per job up to 500 jobs.
  • State Sales and Use Tax Exemptions. Purchases of machinery, equipment, replacement parts and accessories that have useful lives of six (6) months or more and are used in manufacturing, processing, fabrication or repair are exempt of state and local sales taxes.

    Texas businesses are exempt from paying state sales taxes on labor costs of constructing new facilities. Texas companies are exempt from state sales taxes on electricity and natural gas used in manufacturing, processing or fabricating personal property. (The company must complete a “predominant use” study that validates the fact that 50% or more of the electricity or gas used by the business effects physical changes to the products produced.)

  • Skills Development Fund. This program assists businesses and unions by financing customized job training programs. The objective of the program, administered by the Texas Workforce Commission, is to facilitate the creation of new jobs and upgrade the skills of workers on existing jobs. To be considered for grants, businesses and unions must partner with a community college or a technical college who make the grant applications. All training is conducted at the training facilities. Grants for single businesses are normally limited to $500,000.
  • On-the-Job and Customized Training. Many companies have employees whose skills do not justify paying them a self-sufficient wage. This program funds on-the-job training tailored to the needs of the employer to improve the skills of such employees and supplements their wages while doing so. The program is particularly useful when new procedures or technologies are being introduced. To qualify for the program, the local Houston Workforce Development Board must determine that prospective employee participants have not been earning a self sufficient wage. Eligible employers must also commit to retaining participants once they have completed their training programs.

Harris County Incentive

The BOMD is located within Harris County. Under a new program initiated in early 2010, Harris County offers a 10-year tax abatement of 50% of Harris County, Harris County Flood Control District, Port of Houston Authority and Harris County Hospital District property taxes to companies that invest at least $1,000,000 in an industrial building (excluding land) and create 25 or more jobs by the end of Year 3 of the project. The current tax rate for these taxing entities combined is $0.62998 per $100 appraised value, so 50% would be $0.31499/$00. As an example, a new 10,000 square foot (926 m2) office/warehouse building costing, say, $100/SF to construct – and appraised for tax purposes at that value – would yield $3,149.90 per year in ad valorem tax savings. To qualify for this incentive, the prospective building owner must have obtained a competitive quote on available tax abatements from one or more other counties. Approval of the Harris County tax abatement normally requires 90 days following receipt of application.

City of Houston Incentives

Houston offers several incentive programs of interest to prospective investors and users.

  • Property Tax Abatement. Houston offers the same type of incentive to companies or developers of industrial buildings as Harris County. For investors contracting the construction of buildings with appraisal values of $1,000,000 or more and creating 25 or more jobs by Year 3, they are able to obtain reductions of 50% of their ad valorem taxes payable to the city. At current rates, this is 50% of $1.26873/$00, or $0.634365/$00. Using the same example as above, that translates to $6,343.65 per year for ten years, or $63,436.50 over that period.
  • Chapter 380 Agreements. Section 380.001 of the State of Texas Local Government Code allows Texas cities to make loans or grants of city funds to developers and investors, as well as provide certain city staff, facilities and services at minimum or no charge, to help stimulate certain types of real estate projects that are deemed to be urgently needed or highly desired. With the limitations placed on the creation of new TIRZs since 2006, Houston has chosen the Chapter 380 route to stimulate development of a large new HEB Supermarket on I-10 in the Houston Heights District and three low-rise condominium projects in the near northwest Houston, all outside the BOMD. Chapter 380 agreements between the City of Houston and property owners or developers normally take the form of a public/private joint venture in which the city agrees to build, or loan the funds to build, infrastructure consisting of streets, sidewalks, utilities and street lighting to support private development of vacant land in designated land use(s). Capital amounts involved will vary considerably.

BOMD Incentive 

The BOMD’s primary incentives in the form of services provided to prospective investors and businesses considering capital investments and business locations in the District are described in the other portals of this website. The District goes to considerable expense to provide a safe, secure and attractive business environment for its retailers, restaurateurs, office tenants and industrial companies, and supports many community organizations and activities to enhance quality of life for residents. The District also underwrites or obtains funding for infrastructure projects designed to improve mobility and the attractiveness of the District. All of these services and investments are over and above those provided by the City of Houston to all areas of the city.

Nevertheless, the District offers a very important additional incentive that is unique among all areas and cities in the Houston metropolitan area. Hawes Hill Calderon, a leading consulting firm, has an Economic & Market Research Division with substantial professional experience in market and economic feasibility studies for businesses and real estate projects in the U.S., Europe and Asia. Should an interested investor or business contemplating a capital investment or business location in the BOMD wish to contract the Economic & Market Research Division of Hawes Hill Calderon to perform a market demand study for a real estate project being considered, or products or services that are proposed to be offered in the case of an industrial company, the BOMD will reimburse the investor or companies 70% of all professional fees charged in connection with such a study if the organization concerned proceeds with a project or business domiciliation in the district. The BOMD requires that the study be performed in accordance with rigorous standards to try to preclude any project or business failure that might result from a less thorough investigation as such a result would likely damage the reputation and standing of the District.

How to Contact Us

Interested investors and companies should contact:

Ray C. Lawrence
Director of Economic Development
Brays Oaks Management District
10103 Fondren, Suite 300
Houston, Texas 77096, USA
Tel:  (001) 713-595.1235
Fax: (001) 713-541.9906
rlawrence@hhcllp.com

Chinese speaking investors preferring communications in Chinese should contact:

Alice Lee
Chief of Staff for District Executive Director
Brays Oaks Management District
10103 Fondren, Suite 300
Houston, Texas 77096 USA
Tel:  (001) 713-595.1241
Fax: (001) 713-541.9906
alee@hhcllp.com