The Texas economy is one of the most robust in the world. Wildly profitable companies and ingenious entrepreneurs call this state home, and what happens here influences businesses around the nation. Here’s a slice of the profits, losses, big deals, and backroom decisions happening across Tex
Viva la Visa
Austin city leaders are hoping to entice Visa to open a new information technology center in the city, voting unanimously this week to move forward with a plan to offer the company a $1.6 million incentive package. The Austin American-Statesman reports that the 10-year deal with California-based Visa could create nearly 800 jobs in Austin, at least 70 percent of which would be filled locally. The city council is scheduled to vote on the proposal Dec. 6, and Visa is expected to make its decision by the end of the year.
The Bottom Line: According to the Statesman, Visa is also considering Denver and Virginia as potential sites for the new IT center. Gov. Rick Perry is doing his part to sway the company by offering it nearly $8 million from the Texas Enterprise Fund.
The Cancer Prevention and Research Institute of Texas is under fire this week for rubber-stamping an $11 million grant to a Dallas oncology company without going through the proper review process. An internal audit revealed the violation of agency rules that require grant applications to “be reviewed by an outside panel of peer reviewers who evaluate the scientific and commercial merits of the proposal,” the AP reports.
The 2010 commercialization award to Peloton Therapeutics was “one of the agency’s largest taxpayer-funded grants to date,” according to the AP. The company’s funding has been suspended pending another review.
The Bottom Line: The Peloton snafu is the latest in a series of high-profile missteps for CPRIT, which has had several executives resign in recent months because they believed “the agency was charting a new politically driven path that put commercial interests before science,” the AP reports. CPRIT’s chief scientific officer departed in response to a similar case involving a $20 million grant for a project at the MD Anderson Cancer Center in Houston.
Dave & Buster’s Future
Dallas-based arcade restaurant chain Dave & Buster’s began unrolling a new nationwide growth strategy this week, opening a new flagship location in its home city. Less than six months after pulling out of its initial public offering, the company’s renewed “emphasis on new games and food has helped the brand,” the Dallas Business Journal reports. CEO Steve King also told the paper that the company could try again for an IPO “if there’s a different window in a year or so.”
The Bottom Line: As part of its renewed focus on touting new games, Dave & Buster’s hired the co-creator of Microsoft’s Xbox as VP of game strategy. The tactic appears to be working: The company saw a 15 percent revenue increase last quarter, according to the Dallas Business Journal.
Winner of the Week: Al Gore
Austin startup SocialGood.TV is in talks to purchase Current TV, the cable network co-founded in 2005 by former Vice President Al Gore. The company’s CEO told the Austin American-Statesman this week that a group of local media partners plans to meet in December to discuss the terms of the potential deal, which would relocate the network’s operations to Central Texas.
Current reaches 71 million homes and took in about $17 million in ad revenue last year, but its Nielsen ratings have been lackluster. According to the Statesman, if the deal is successful, SocialGood.TV would “shift its left-leaning programming to a more middle-of-the-road focus” in an effort to appeal to a broader audience.
Losers of the Week: Lockheed Martin
This week, the New York Times reported on the precarious future of the F-35 fighter jet program, which is caught in the crosshairs of federal budget cutters. Manufactured at Lockheed Martin Aeronautics’ Fort Worth plant, the jets are the most expensive military aircraft ever made, and the program is running several years behind schedule at a time when Congress is especially eager to cut defense spending.
The Pentagon’s top weapons buyer told the Times that “Lockheed has seemed to be focused on short-term business goals,” allowing the project’s price tag to nearly double. It could be at least six more years before full production begins, and the program would “cost taxpayers $396 billion, including research and development, if the Pentagon sticks to its plan to build 2,443 by the late 2030s,” the Times reports.