The Waco Tribune-Herald: Baylor 2012's impact was economic energizer for Waco

May 10, 2012

Baylor 2012: A Decade of Change by the Waco Tribune-HeraldArticle reprinted with the permission of The Waco Tribune-Herald.

By MIKE COPELAND

Thursday May 10, 2012

Fifth article in a six-part series examining the progress of Baylor University's 10-year growth and visioning plan known as Baylor 2012. This article focuses on the economic impact of the plan on Waco and Central Texas.

Baylor 2012 served as a road map for changing the face and future of the largest Baptist university in the world, and it created an economic energizer for the city of Waco.

Consider that Baylor spent nearly $400 million on new construction and renovations in the past decade, and regents in 2011 approved spending another $120 million.

During that same time, Baylor hired nearly 200 full-time faculty members and began converting the old General Tire plant at Orchard Lane and U.S. Highway 77 into a high-tech research anchor that could impact Waco's economy to the tune of $4.2 billion.

These developments moved in lock step toward Baylor's goal of becoming a top-tier university that places more emphasis on research and reduces the student-to-teacher ratio.

The result has been more work for local contractors and subcontractors; more professionals to live in apartments filling historic buildings downtown; and a growing student body that dines out and shops.

"I think the front door of Baylor is being opened wider to the Waco

community," said Sarah Roberts, an industry recruiter for the Greater Waco Chamber of Commerce. "Think about the 100,000 visitors who drive by daily on Interstate 35. Baylor has helped change their perception of Waco, given us a stronger image."

Baylor 2012 brought the university and Waco into the big league when discussion turns to research opportunities and a talent pool that could attract high-tech industry to Central Texas, Roberts said.

BRIC's Waco impact

The Baylor Research and Innovation Collaborative, or BRIC, will anchor a 22-acre discovery park that includes a 330,000-square-foot building being converted to a research center. It will have labs, Texas State Technical College's technology training center and a Baylor-run "business accelerator."

Baylor, the state of Texas and local governments so far have contributed $45 million to launch the park. Most of the space already is committed, but 40,000 square feet remains available for private industries.

Baylor officials said acreage around the building also could accommodate public or private ventures.

"I would say this is going to give Waco options it perhaps didn't have before," said Baylor vice provost of research Truell Hyde, who is heading the project.

Hyde noted BRIC could provide lease space for companies as they decide whether to build permanent facilities in the community.

"Most would prefer leasing over construction," he said.

Workers are about a month from finishing the $32 million Phase 1 of the BRIC renovation, which gives the building a new exterior and rebuilds the interior. The second phase fleshes out the inside with laboratories, offices and meeting space for 400 people. Various Baylor programs will move to the center in 2013 or earlier.

Hyde said Baylor receives inquiries weekly from industries wanting to locate in or near the discovery park. They include startup enterprises, businesses wanting to relocate and overseas companies needing a U.S. presence.

"We're being finicky," Hyde said. "We want companies that will affect our faculty and students, the TSTC faculty and students, and the regional economy in the most positive way."

Waco-based economist Ray Perryman published a report saying BRIC could create 8,618 to 22,656 jobs within its first 15 years and have an economic impact of $1.5 billion to $4.2 billion on McLennan County.

Athletic expansion

The scientific community is abuzz about BRIC but also is impressed with Baylor's athletic success, Hyde said, adding he recently attended a plasma physics conference, "where people were excited about what we've done" in sports.

"We have had a remarkable year," he said, with the Baylor football team winning the Alamo Bowl, and quarterback Robert Griffin bringing home the Heisman Trophy.

That was followed by the Lady Bears' national championship, the men's basketball team reaching the Elite Eight, the baseball team winning the Big 12 title and the equestrian team winning the National Collegiate Equestrian Association's Hunter Seat championship.

This success coincides with Baylor 2012's idea "to build with integrity a winning athletic tradition in all sports," according to one of the "Imperatives" the school included in the plan.

To that end, the school spent $34 million on the Highers Athletics Complex/Simpson Athletics and Academic Center; $11.1 million on the Jay and Jenny Allison Indoor Football Practice Facility; $8 million on the Lt. Jack Whetsel Jr. Basketball Practice Facility; and $1.6 million on the Willis Family Equestrian Center.

Under construction are the $7 million Jim and Nell Hawkins Indoor Tennis Center and the $995,000 Carlile Equestrian Building. Using a major contribution from Drayton and Elizabeth McLane, Baylor also plans to build a $250 million stadium on the north bank of the Brazos River, with an opening planned in fall 2014.

Community spending

While Baylor spent hundreds of millions on new construction, renovations and facility improvements in the past 10 years, bond issues totaling $434 million fueled construction for the city of Waco, Waco Independent School District, McLennan Community College, McLennan County and Midway Independent School District.

"This has helped keep the Central Texas construction community afloat during the worst times in 2008, 2009 and 2010," said K. Paul Holt, president of the local office of the Associated General Contractors of America. "We have been impacted by the national economy, but not so great as it would have been without these projects."

"Baylor has been good to us over the last six or seven years, good to us and good to our subcontractors," said Scott Pearson, president of Pearson Construction.

He estimated his company has been involved in 25 projects at Baylor worth about $20 million, most of them devoted to renovations of existing buildings.

Recently, Pearson said, his company won the contract to build the new indoor tennis center.

Much of the new construction has gone to out-of-town contractors because the projects are sizable, Pearson said.

"Sometimes these companies use local subcontractors, but not always. When you talk about the magnitude of these jobs, manpower is a huge issue. Some locals don't have the manpower to meet Baylor's schedule."

Hiring binge

On the academic front, Baylor has been on a hiring binge associated with its 2012 vision -- its desire to lower the student-to-teacher ratio and to involve more faculty members in research.

The number of full-time faculty members increased from 697 to 886 between 2001 and 2011, according to a report provided by Baylor.

During that same period, Baylor's total annual salaries and wages for its full-time and part-time faculty and staff have nearly doubled, growing from $92 million to $167 million.

The number of students increased from 14,221 to 15,029, with 88.5 percent of the student population coming from outside McLennan County, bringing outside dollars to Waco.

Baylor University economist Tom Kelly prepared an economic snapshot showing that revenue generated by Baylor from outside McLennan County will have a $1.79 billion impact on the local economy during the 2011-12 academic year.

Contributing to this total, he said, are measures the university took to meet the goals of Baylor 2012.

In preparing the report, he said, he included the following measures and parameters:

• Total student enrollment and the percentage of students whose permanent residence is outside the county.

• Total spending by students from outside the county and the percentage spent locally.

• Estimated spending by out-of-town parents and visitors associated with Baylor activities, including sporting events.

• Baylor's total operating budget and capital improvements funded by out-of-county revenues.

In coming up with his figure of $1.79 billion, Kelly applied a multiplier of 1.5 to 2.5, depending on the nature of the expense, to show the number of times the average dollar "turns over" during a 12-month period.

Kelly said a Baylor student from outside the county typically spends $15,000 an academic year on food, housing and other items past what he or she spends on tuition and fees.

That money could buy a hamburger and fries at a local restaurant, a ticket to the movies or a new pair of shoes at a local retailer.

Housing growth

Baylor 2012 proposed to increase the number of students living on campus. With that in mind, the school spent $90 million on two residential communities: North Village and Brooks Village.

But some faculty members, whose number is growing, are availing themselves of new downtown living opportunities.

Alison Brown, a leasing agent for Waco Lofts Living that manages Behrens Lofts, Holiday Hammond Lofts and the Praetorian Building's lofts, said at least 10 Baylor faculty members live in the three buildings.

She said the complexes, which offer units for $825 to $1,395 a month, are full. The tenant makeup is about 70 percent professional, including Baylor professors, and 30 percent students.

"Baylor impacts us all, the whole city, the whole county," Brown said.

Kelly's report said out-of-county people attending Baylor-related events in Waco during the academic year now coming to an end probably will total 221,200 "person-days."

A person spending one day in the city is classified as a person-day, so an estimate the size of Kelly's is "tremendous," Waco convention and tourism director Liz Taylor said.

Not all visitors will spend the night, but those who do contribute to the area's lodging industry.

"I don't know how many hotels would go away if we didn't have Baylor, but I know it generates a significant amount of business year-round," Taylor said. "I don't think any of the properties would disagree with that."

Restaurants that open in Waco often cite Baylor's presence as a factor. Specifically, representatives of Chipotle Mexican Grill, Raising Cane's and the soon-arriving Freebirds World Burrito mentioned the school's impact.

Mike Beheler, president of the Waco Restaurant Association, said the success of Baylor athletic programs creates excitement among diners who like to enjoy games at restaurants and sports bars.

He also said students trying to make ends meet create an attractive employment pool.

Baylor's influence on the local economy began in 1885, when the campus moved from Independence to Waco. Baylor 2012 extended that reach in a way that has magnified Waco's high-tech potential and allowed the city to prosper from spending on new construction and growth in faculty and students.

Read other Waco Tribune-Herald stories on Baylor 2012.

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