A believer in southern Dallas

ECONOMIC DEVELOPMENT: City should make sector its business, say those who have built on area's promise

It's 6 a.m. in South Dallas, and it sounds like business.

Brad West (right), owner of Continental Cabinets, on the city's role: "We don't really know what resources they have that could help us."

Sanders whine, saws screech and staple guns add a pop-pop-pop percussion on the factory floor of Continental Cabinets.

For 13 years, James Bradley West and his wife, Beverly, have planted their future in this graffiti-tagged industrial block off Illinois Avenue, a neighborhood where corporate giants – Borden, Reddy Ice and Southland Corp., parent of the 7-Eleven convenience stores – have sprouted and shriveled under the annoyances that accompany commerce in South Dallas.

But Continental Cabinets intends to stay. For the Wests, it has been a journey of prosperity in hardwood and countersunk nails.

In 1992, the company employed 30 people. Today, its payroll has grown to 300, and its cabinets are shipped to 48 states.

And this month, they will begin moving their operation to a new 342,000-square-foot plant a few miles west on Kiest Boulevard.

One morning last August, Mr. West and his brother-in-law, Craig Taylor, wandered the empty, cavernous building, pointing out where certain assembly lines will be set and where remodeling will be done to build a workers' commissary and factory manager offices.

"The reason that this location makes sense is there's a good workforce close by, and real estate is cheap," Mr. West said. "You learn to work around all of the other problems you have."

His reasoning sounds as if it could be straight off a page of talking points from the Dallas economic development department.

The employees "need employment near their homes," Mr. West said. "We need to put more people to work in the southern sector. That's what we do. We need more of it."

Since Continental Cabinets came to South Dallas in 1992, it has supported the growing Mexican-American community around it in a vital way – jobs, said 13-year employee Gabriel Acuna.

"This is a place where a lot of people don't have too much education," said Mr. Acuna, who started as a machine operator and now co-supervises 33 people in the door department. "They don't have opportunity to go other places. But they need to have a job."

Over the years he has mentored dozens of employees unfamiliar with cabinet-making. "We can help them," he said. "They can start from the beginning."

That word out, many of the company's employees are referrals from friends and family who already work there. Jonathan Vallejo, 19, started in production 18 months ago, after his older brother encouraged him to join him on the employee roster. Today, the younger Mr. Vallejo helps with inventory control.

"I like everything about it," he said of his job and the company.

Continental Cabinets is a story the city of Dallas would like to replicate. Its prosperity is a rare example of southern sector success.

But the city had little to do with it.

After decades of concentrating trash dumps, public housing projects and liquor stores south of the Trinity River, city hall is learning a basic lesson of real estate – it's easier to maintain a house than it is to sell one that is rundown.

A sun-weathered sign sits above a trash-strewn lot at the corner of Pierce and Saner streets. It warns against illegal dumping and provides a map to a location where trash can be left. Yet, all around is a sea of illegally dumped construction materials, beer bottles and even the decaying carcass of a dog. The sign is perforated by bullet holes.

Southern Dallas is the city's greatest challenge and its greatest promise.

Poverty is nearly twice as high as it is in the northern half of the city. Yet, it holds nearly all of the city's developable land – and, therefore, the key to growing the Dallas economy. But significant obstacles to development remain.

"Citizens in the city's southeast are the least satisfied, the least employed, the least safe and the least educated," according to the 2005 Booz Allen report.

"Beyond the benefits of neighborhood revitalization, fixing public safety issues in the southeast improves the overall crime picture in Dallas, encouraging businesses to relocate, developers to invest and citizens to spend their disposable income in Dallas."

Right now, southern Dallas consumers spend about $1.5 billion outside the southern sector annually, according to a review by the Foundation for Community Empowerment. Some of that money is spent with Dallas merchants. But much of it likely makes its way to retailers outside the city, fattening suburban treasuries instead of Dallas'.

To reverse this trend, Dallas leaders must develop a more mature partnership with the private sector, which had long ruled from City Hall. The city's long and bitter racial politics – in which South Dallas residents equated the city's business establishment with subpar conditions in their neighborhoods – has so far largely prevented a mutually beneficial relationship from evolving.

Start with the basics, said David Neumann, president and chairman of the board of the Stemmons Corridor Business Association.

"Infrastructure is important," he said. "If the city provides infrastructure, it provides opportunity for investment of private capital."

Continental Cabinets, which employed 30 people when it opened, now has 300 on the payroll. "The reason that this location makes sense is there's a good workforce close by and real estate is cheap," CEO Brad West said. "You learn to work around all of the other problems you have."

"Invest in us, and we'll invest in you," he added.

Dallas economic development leaders say they have invested in the southern sector, including a reorganization that prioritizes the south. The city's business parks, which have tax advantages, already attracted the firm's new home.

Still, the difficulties that accompany life and commerce in the southern sector have already created problems for the company. Even before they moved in, they had to hire a security firm. Thieves have already broken in and stolen copper coil out of the floor.

Despite their shared goals – successful business in South Dallas – Mr. West said he has little interaction with the city.

"We don't really know what resources they have that could help us," Mr. West says. "I guess we never really had a lot of expectations except for basic services."

ECONOMIC DEVELOPMENT

Department urged to capitalize on momentum by integrating education, public safety issues

By ANGELA SHAH / The Dallas Morning News

Dallas City Hall today boasts a beefed-up economic development team with more money, more people and a roadmap to restart the city's commercial engine.

Still, more hard work remains. Tough decisions will have to be made by a City Council whose actions sometimes don't back its talk.

"There will always be some who resist the momentum we've gained," said Ryan Evans, the city's assistant city manager for economic development. But "the vast majority of the council trusts where we are going."

In its update for The News this fall, Booz Allen Hamilton hailed the changes, calling the department's new strategic plan "an excellent start."

Still, the firm finds that adding to staff and approving plans, while encouraging, isn't enough.

How do the priorities Mr. Evans and his staff decide on percolate up to City Council members who ultimately have the authority on how the city invests in itself?

"At the City Council level, there is no comprehensive strategic plan to guide the plans of the Office of Economic Development, nothing to ensure that economic development will have priority over, for example, local political issues and interests," Booz Allen states.

How committed council members are to following the vision of Mr. Evans and his staff is key. To revitalize Dallas means City Hall must create, largely from scratch, an economy in the south.

But promoting economic development in the southern sector necessarily involves addressing the city's long and bitter racial legacy there.

In the past, that legacy has marred discussions on boosting business activity in the south. But moving beyond the past is the only way for Dallas to compete in an increasingly globalized world that will otherwise pay no mind to cities whose economic dominance has faded.

In remarks before regional business leaders recently, the city's new economic development director bluntly used a savanna metaphor, one of the life-and-death existence among lions and gazelles.

"If you're a lion, you need to be at least faster than the slowest gazelle," Karl Zavitkovsky said. "If you're a gazelle, you need to be at least faster than the fastest lion."

"Either way, you've gotta haul ass."

If city leaders can avoid the distractions that have long plagued discussions at the City Council horseshoe, Dallas might finally have the pieces to drive – rather than simply respond to – commercial development.

In the last year, the city's economic development department has undergone a dramatic change, proof of a turnaround-in-progress, Mr. Evans said.

An infusion of cash has ramped up the department, and newly hired personnel recently finished a strategic plan to guide city leaders through an economic vision.

First of all, the council made economic development a stand-alone department with a budget of $2.07 million for 2005-06. Its staff was nearly tripled to 45 people. A number of those hires were in key strategic areas: retail, business expansion and retention, research and information, and others.

The department itself is now organized according to specific goals, with divisions on southern Dallas, downtown and business services. Staffers within these divisions are charged with a number of developments that Mr. Evans plans to be marquee accomplishments for both his department and the city as a whole.

Economic development staff is working alongside Trinity River project planners to flank the celebrated Calatrava bridges with skyline-facing condos, restaurants and bars.

Mr. Evans hopes to spark southern sector activity by leveraging the city's beneficial geographic location and forming an inland port that would further cement Dallas' ties to North American Free Trade Agreement and other international trade.

And, with the help of an outside task force made up of public, private and nonprofit organizations, Mr. Evans and his staff crafted a strategic plan this summer articulating goals, milestones and desired outcomes.

That, they hope, will "make economic development a disciplined, transparent process rather than a disconnected collection of ad-hoc projects," according to an outline of the city's efforts.

Leading this renaissance is Mr. Zavitkovsky, a former Bank of America real estate executive who agreed to become the city's director of economic development in July. His hiring is a crucial infusion of private-sector expertise in a municipal shop that had largely forgotten how to do business.

He hopes to forge a solid partnership with his public-sector bosses.

"We need City Council buy-in to accomplish what we're trying to achieve," Mr. Zavitkovsky said.

Eighteen months ago, the city's economic development office itself was a shredded operation. City Hall sliced the staff nearly in half and its budget by two-thirds just as the nation began reckoning with the hangover of the 1990s boom.

City leaders couldn't articulate how well or poorly the Dallas economy was performing, much less define goals for its growth going forward. Nor could they provide a list of economic indicators it might regularly review.

All denied that the city's economic engine had stalled.

Today, Booz Allen applauds the department's changes. Yet the consultants find the city hasn't gone far enough.

To properly support the new economic development initiatives, City Council members must also consider and integrate public safety and education programs. Each boost – and are interdependent on – the other.

"A good strategic plan would recognize the synergy among these priorities and outline an integrated program for harnessing it," Booz Allen concludes.

Conversely, weakness in one translates into weakness in another.

"There's a perception of less-than-safe neighborhoods," said David Neumann, president and chairman of the board of the Stemmons Corridor Business Association. And there should be a "much stronger relationship" between Dallas and its independent school district, he said.

For the first time in more than a decade, the city's business leaders would rally around a clear, all-encompassing vision projected from City Hall, said J. McDonald Williams, chairman of the Foundation for Community Empowerment.

"The corporate leadership is starting to become leaders, to put some chips back in the game," he said. "They're wanting to believe, wanting to re-engage, wanting to reinvest."

City Hall will need the help. Its long-term challenges remain in place.

The city isn't producing or attracting the college-educated workforce crucial for a city with world-class aspirations. Nor is it expanding its tax base.

Despite a rebounded national and state economy, Dallas' sales tax base lingers well below 2000 levels. In comparison, the city's Texas peers and its suburbs – especially Richardson and Plano, home to the busted Telecom Corridor – have been able to recover.

Today, Dallas collects less in constant 2000 dollars per resident in sales tax revenues.

The city's commercial tax base also continues to decline. After first falling below that of residential property in 2003, taxable values of business properties have not reversed their course. Homeowners' share of the tax burden remains at an all-time high.

Downtown Dallas and the northern half of the city still account for 84 percent of the city's retail sales. Yet, nearly all of Dallas' developable land lies in the south, where homes are worth less than a third of those in the north.

And time is short, added Mr. Neumann of the Stemmons association.

"Capital is impatient," he said. "It will move if not used in a reasonable time."

E-mail ashah@dallasnews.com