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Hanger economic development hearing today

Thursday, January 21, 2010 by Austin Monitor

For Council Member Randi Shade there is little doubt that the proposed relocation of Hanger Orthopedic Group Inc.’s corporate headquarters from Bethesda, Md. to Austin is a positive development.


Shade and Council Member Bill Spelman both say that the city’s Economic Growth and Redevelopment Services Office (EGRSO) appears to have done a good job of digging into the implications of the headquarters move. But Spelman, as he usually does, will have a number of questions as Council meets today to hear about the Chapter 380 development agreement with Hanger. Under the terms of that agreement, the City will pay Hanger an annual development grant in the amount of $50,000 for 10 years, with $1.5 million to be provided by the State of Texas. The vote on that agreement is set for next Thursday.


Council Member Laura Morrison, who helped craft tougher rules for such agreements, told In Fact Daily, “On the surface it looks like a reasonable proposal. I’m still delving into the details and trying to collect some more information …Of course, the whole point of our process is to be able to consider public input,” which Council will do at its meeting this morning. Morrison said she would “keep an open mind as we move forward with the meeting (today) and again next week.” 


Spelman said he would be asking some questions about how the EGRSO reached its conclusions. “We know that Hangar is going to be hiring some people,” he said, “and as a result of the hiring they’re going to do, there is almost certainly going to be an increase in population growth — some people are going to come to town to take advantage of the jobs. Once we take into account the services and jobs, the revenues and the costs, are we taking into account the costs associated with the people that Hanger is going to be hiring?”


That’s important, Spelman said, because “we’re setting the standard for all the Chapter 380 agreements” Austin may do in the future, which would lead to more growth, more potential costs, and so on.


Shade points out that Hanger is a leader in a growth industry. The company has “employees spread out all over the place,” she said, including 19 currently in Austin as part of a company of 30 people in a wholly owned subsidiary. “So, when they made the decision that they’ve reached a critical size that they wanted to try and co-locate people in their corporate headquarters, one of the considerations here is that we didn’t want to lose the 19 people,” Shade said.  But that’s just the beginning.


“Another thing is the relocation experts suggest that of the 133 currently employed at the corporate headquarters, not all of them will move, which means, new people will be hired” to work in Austin, Shade said — although how many current Austin citizens is certainly a question. Nonetheless, Shade says with the company’s average salary at around $97,000, capital improvements for the buildings, as well as “lots of opportunities for local businesses to partner and become vendors of this company,” the city should be happy to have Hanger. In addition, she said, “Often when a corporate headquarters moves to a city, you see it increases the amount of legal services, advertising services, and other services tend to benefit.” 


“If we’re putting in $50,000 yearly, the chances of us recouping that are pretty good. This isn’t a multimillion-dollar deal,” for the city. “The build-out alone that they are committing to ($7.65 million) is several million dollars of local contractor work, so the chances that in the course of this first year we wouldn’t have a positive benefit from their relocation here is pretty slim,” she said. Ultimately, Hanger is promising 250 Austin employees.


Shade has another personal reason for her enthusiasm about Hanger. Her partner, Kayla Shell, last month began wearing a product made by the company, called WalkAide. The Austin-based company that is part of Hangar invented the product, which allows the wearer to easily pick up a droopy foot, she said.


Shade added, “One of my closest friends in business school lost two legs in a fire when he was nine, and so in the time I’ve known him – I met him in 1990 – the quality of what he’s been able to use has gotten a lot better.


“I’m thrilled that I know that they’re actually on the cutting edge. This sends an electrical pulse from Kayla’s knee to where her foot is so she can walk without a cane. Since December 15, she’s been walking without a cane because of this WalkAide, which was designed by an Austin company that I’d never even heard of. The fact that that company now wants to relocate their corporation headquarters and has this history of 25 percent of the market—and it’s a growing market,” makes Shade particularly happy.

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