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Houston Plans Ways to Foster Tech Startups

The city is responding to a flux of tech startups in recent years.

by Lydia DePillis, Houston Chronicle / June 30, 2017
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(TNS) -- After nearly a year of planning and study, a group tasked by Houston's city council with figuring out how the city might support fast-growing technology companies on Thursday laid out plans for turning the recent talk about building a vibrant startup scene into action.

The report to the City Council was the second of two rounds of recommendations for what would help Houston grow its stock of technology companies. The first came from a group convened by the Greater Houston Partnership, and was aimed at the business community. This one, funded by the city itself, is aimed at government action.

"We've got the raw ingredients," says Council member Amanda Edwards, who chaired the council's task force. "But now we have a comprehensive plan."

The plan has three fundamental points: The city should talk about and advocate for its tech startups, lay the groundwork for an "innovation district" that would concentrate tech startups in a central neighborhood, and become a "testing ground" for new technologies like self-driving cars, drones and advanced manufacturing.Here are a few specifics:

Attend conferences about startup ecosystems, and host high-profile events in Houston to elevate the tech community.

Create a founder's visa program to help talented foreigners stay in Houston to start companies.

Overhaul city procurement processes to become a client of young tech companies.

Get a data science center moving again, after the failure of the University of Texas plan to build one.

Potentially leverage tax incentives to designate a building or a neighborhood that could serve as the epicenter of yet-to-be-founded tech companies.

John Reale, who heads a year-old software startup incubator called Station Houston, sat on both the business group and the city's task force. Standing in jeans, sneakers, and a T-shirt from one of Station's member companies, Reale made the case for action and strategies for channeling it.

"We have to create this culture," Reale said. "If you take one piece from all of this, it's that you need active leadership."

The plan won't be like Houston's bike plan, which required approval by the Council. Rather, there may be pieces brought to council in support of the plan, such as tax incentives to support the innovation district. Mayor Sylvester Turner, who was briefed on the plan yesterday, has asked the task force to come up with a list of action items to pursue.

One of them will likely be designating a neighborhood to be the target of tax incentives and other assistance for tech companies. Station Houston's current lease downtown will end next year, and Reale is in the market for a new building. He has said that he envisions Station being at the center of whatever area the city decides to support.

The neighborhood that has been bandied about most as a potential destination for such an innovation district is EaDo, with its abundance of warehouses and breweries, its proximity to downtown, and capacity for future development. Council member Robert Gallegos was already on board with the idea.

"With regard to starting an innovation district, I'm hoping EaDo would be at the top of your list," he told Edwards and Reale.

As the pair emphasized, there is precedent for successful innovation districts in places like Chicago and Cincinnati, which the task force visited in formulating its recommendations. But the Brookings Institution, which has conducted much of that research, also warns against doing something superficial that doesn't have real economic energy behind it.

"In a number of cities, local stakeholders have applied the label to a project or area that lacks the minimum threshold of innovation-oriented firms, start-ups, institutions, or clusters needed to create an innovation ecosystem," researchers wrote in 2015.

"This appears to result either from the chase to jump on the latest economic development bandwagon, the desire to drive up demand and real estate prices, or sometimes a true lack of understanding of what an innovation district actually is," they continued. "The lesson: labeling something innovative does not make it so."

©2017 the Houston Chronicle Distributed by Tribune Content Agency, LLC.