Disaster Preparedness • Economic Recovery • Resilience

Volunteer Gary Conley Supports post-Hurricane Harvey Manufacturing Incubator Initiative in Houston

As part of economic recovery efforts for Hurricane Harvey communities, Gary Conley traveled to Houston recently as an IEDC volunteer, where he worked to help develop the East End Maker Hub. The Hub is a proposed new small business incubator in the city. Conley’s task was to tap his expertise in real estate and business development to assess whether there was sufficient demand for the Hub to be viable.

The Maker Hub, a part of Houston Mayor Sylvester Turner’s “Complete Communities” Program, is a facility that would focus on providing space for very small manufacturing enterprises (VSMEs), manufacturers with less than 20 employees. These companies have often found themselves lacking the location and facilities to be successful. The notion of a maker’s hub has thrived in the last decade in numerous American cities seeking to create low-cost manufacturing spaces where know-how, resources, and job training can be shared.

Conley’s visit was based on a grant supported by the U.S. Economic Development Administration (EDA) which calls for IEDC to provide volunteer economic disaster recovery services to Texas communities impacted by 2017’s Hurricane Harvey.

“My task was to get a sense of the Houston economy and the need for incubator space in the East End of Houston,” Conley said in an interview. “This has been a challenging time for the city following Hurricane Harvey, and there was the recognition of a need for improving business infrastructure in the longer term,” he continued. “This community has really pulled together.”

In putting together his assessment, Conley worked with the Urban Partnerships Community Development Corp. (UP CDC), which had preceded him in collecting demand information for a maker’s hub. UP CDC has participated in the development of over $200 million in multifamily, mixed use, and industrial development in the Houston area.

Using a format jointly developed with UP CDC, Conley conducted 30 interviews in late April. As Conley went about his task, he was very conscious of the challenges facing small manufacturing businesses in Houston. In addition to prospective tenants, he queried real estate brokers, private real estate investors, venture capitalists, representatives of private industry groups assisting the small manufacturing community, and economic and community development professionals. The interviews focused on the space requirements of the tenants, the difficulty that VSMEs experience in fulfilling their space requirements, and the attractiveness of the East End as a location in comparison with other industrial space.

In zeroing in on these focus areas, Conley found that prospective tenants had real   incentives to locate in the East End.

Space was indeed available, as exemplified by presence of existing successful incubator in the East End, TXRX Labs, a non-profit which operates in a group of warehouses providing fabrication and prototype services, as well as job training and technology classes. As for the relative attractiveness of the East End as a location for VSMEs, Conley found that his interviewees were quite aware of its desirability, citing access to the downtown, and to transportation hubs; proximity to, skilled workers, and technology students at nearby universities; the availability of small manufacturing establishments and education providers; and access to affordable housing. Conley’s report also noted that interest in the Hub location was so favorable that UP CDC has received letters of intent or very strong interest from 20 prospective tenants.

The final part of the report assessed the financial risk of funding a projected total project cost of $32.7 million, of which a $17.8 million City of Houston Section 108 loan is the only debt component. Grant funding includes $7.4 million of New Markets Tax Credits, a contribution of $1.4 million from UP CDC, $150,000 of in-kind funding from TXRX, a $1 million Economic Development Administration grant, and $5.0 million in gap funding.

Conley’s report concluded that East End Maker Hub program “would appear to be a superlative early start investment.”

What’s clear is that the plan, while still evolving, is taking a definite shape and is part of a network of entrepreneurial innovation in Houston that includes, besides the Urban Partnerships Community Development Corporation and TXRX Labs, Houston’s Greater East End Management District.

Conley brings a long and distinguished career as an economic developer to the task, and a longstanding involvement with IEDC. This connection dates back to the early 1970s, long before the present-day organization was formed from a merger of the Council of Urban Economic Development (CUED) and the American Economic Development Council (AEDC) in 2001. He served as CUED’s President in 1985.

In the early 1970s, Conley was hired by the Dayton, Ohio, Planning Board, having just graduated from the University of Pennsylvania with a Master’s degree in City Planning. He quickly focused on a specialty which has been central to his work since, financial modeling. Soon thereafter, Conley moved on to work on federal government “New Federalism” initiatives, including development of Community Development Block Grants. “We were part of a team that went all over the country, developing community and housing incentive tools,” he said.

From 1983 to 1987, Conley was Cleveland’s Economic Development Director, and soon thereafter, president of the Los Angeles County Economic Development Corporation. In the 1990s, he returned to the Midwest, where in 1995 he became President of TechSolve, a Cincinnati-based consultancy that provides industrial engineering and research and development services to manufacturers. In 2016 he retired after heading the company for 21 years.

Conley values his work as a volunteer for reasons that go beyond helping cities develop businesses. He particularly enjoys the intellectual stimulation of working with a wide variety of local governments. “To me exposure to new places is extremely important: it gives me the chance to talk to leadership, and to see how they address the same problems others are facing in different places,” he explained. “The more you see of other cities, the more you tend to view their problems as not totally unique.”

Conley is also acutely aware of the value of volunteerism to help disadvantaged communtitiescommunities. “Often, local governments and nonprofits simply can’t afford to acquire the expertise needed to solve problems, so it’s very useful for people to contribute their time, skills, contacts, and networks,” he said. “It can make all the difference in the world.”