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AUSTIN-What will fill the scads of real estate on the market in Austin is some good, old-fashioned economic development. That is, bringing companies in from out of town and out of state to fill up those increasingly vacant offices.

“One major announcement or two,” says economist Angelos Angelou, who last week forecast higher vacancy rates and a slow local economy until this time next year. “One or two good shots in the arm, whether they are companies that are here that plan to expand or perhaps a new company or two coming to Austin, and we can absorb some real estate, this forecast will change significantly.”

In recent years, Austin has spent more time on dealing with its rapid growth than with trying to attract more business. Organizations such as the Greater Austin Chamber of Commerce even received criticism for concentrating too much on out-of-town companies and too little on companies already here. Now, with the Central Texas economy slowing, it’s time to throw economic development in high gear, says Angelou, founder of Angelou Economic Advisors. He’s also a former vice president of economic development at the Austin Chamber.

“I understand the reasons why Austin has relaxed a little bit on economic development the last few years,” he says. “Things were going so wonderfully. But economic development must always be on high gear whether we’re growing by 5% or we have a negative growth. Economic development is not to be forgotten. It takes time to reinstate yourself in that business, to establish the relationships, to have a pipeline of projects and contacts that may be interested in moving into this area.”

Austin has much to offer, he says. There’s all that office space and a great supply of technical talent. And, he says, with all the layoffs this year, people actually appreciate having a job instead of quickly jumping to the next hot start-up. As a result labor costs are decreasing.

The real estate part of the equation is something that Austin has been unable to offer since the late 1980s, Angelou says. Companies often want large pieces of contiguous space and, as Austin grew in the 1990s, that became increasingly unavailable.

“We have actually missed out on economic development projects because we didn’t have large blocks of office space that companies wanted,” he says. “(Now) We do have large space that’s going to be cheap.”

John Breier, the Austin chamber’s economic development vice president, says the organization has short-term and long-term economic development strategies in place.The chamber is leading delegations to Mexico City and Silicon Valley, he says. In Silicon Valley, business, government and education officials from Central Texas will meet with two kinds of companies: those with operations here and those that would have operations here.

First, Breier says, the group will thank companies doing business in Austin for being in the capital city, ask if there’s anything they need and encourage them to expand here. The group also will visit with companies that show signs of high growth to ask them to consider the Austin area.

Economic development officials are working on biotechnology, especially the area where biology meets information technology, Breier says. They also are working to develop a relationship with San Antonio and its medical centers and biotech businesses.

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