TEDC Webinar: Revealing Hidden Opportunities for Economic Development in TexasJuly 27, 2020 | By Maurielle Balczon
RESET CEO Wayne O’Neill was recently asked by the Texas Economic Development Council (TEDC) to provide coaching on how to access hidden opportunities for capital project funding, especially as traditional revenue streams have dried up during the COVID-19 pandemic.
On June 30, 2020, Wayne was joined by David Dodd of the International Sustainable Resilience Center for a live webinar to discuss these opportunities to tap into hidden capital. By accessing resources that are hiding in plain sight, stakeholders in government, higher education, healthcare, and ports will be better positioned to support economic development across Texas.
The reality for stakeholders in Texas is that traditional funding sources (e.g. tax incentives, rebates, and bonds) that support local economies and the state as a whole have dried up. It could be anywhere from 24-36 months — or beyond — until retail sales, cash flow from energy and oil & gas, and other traditional revenue sources return following the health crisis and economic disruption.
Therefore, stakeholders need to think differently about the financial opportunities to generate revenue and create jobs in their local areas. The answer is capital project funding in the form of foreign pension funds and sovereign wealth funds.
Why Foreign Investment Sources to Fuel Revenue Growth?
Economic stakeholders are accustomed to looking inward to local businesses, local funding sources, and local economic indicators to make determinations about capital funding projects. However, during this period of time, it’s critical to take a global perspective looking outwardly to foreign investment sources.
“There are foreign investors and sovereign wealth funds that can’t invest in the United States quick enough,” Wayne O’Neill stated during the webinar.
These foreign investment sources want to drop cash into U.S. infrastructure projects because of the robustness of our country’s economy, as well as the high yield that comes with investing in long-term projects.
While we may be focused on day-to-day economic fluctuations and other indicators about the health of the U.S. economy, outside parties are looking at the bigger picture of the U.S. economy being a safe place to drop funds into capital projects. It’s about the yield, safety, net-operating income opportunity, and sustainability of generating a return.
For stakeholders in critical industries such as healthcare, higher education, and government, there are opportunities to connect larger infrastructure projects that have a purpose in the community to these foreign investment sources that are arranged on Wall Street.
“It’s not just about giving money to communities; it’s about investing that money in mission-driven projects,” Wayne said. “Mission-driven projects bootstrap up the community even more when you want to leverage this money by monetizing stuck assets. When you look at it from a net-operating income standpoint, and manage it more effectively as a 30-50 year asset, the big question that Wall Street asks is ‘where’s the mission?’ There is a mission connection to this investment. Monetizing net-operating income and doing that effectively is a real art, science, and craft.”
Crafting Connections to Support Capital Funding Opportunities
At RESET, we are regularly in contact with our Wall Street partners who are connected to investment sources, whether it’s foreign pension funds or sovereign wealth. These investment sources are looking for safe places and safe projects to generate a healthy return for their constituents.
However, this opportunity is not going to happen without curation and facilitation, which is what economic developers are good at. But, stakeholders also need to look at assets and projects differently as potential cash sources if monetized, managed better, and linked to outside financial funds.
Our team can help facilitate these connections through our relationships on Wall Street and our ability to help stakeholders come together, collaborate on project scope creation, and create the types of mission-driven projects that will attract foreign investment dollars.
Now is the ideal time to try a new approach to project scope creation and generating new jobs at a time when traditional revenue sources will not be returning to previous levels anytime soon. We invite you to contact us for more information on how we can help support your economic development efforts across Texas.