Why does Dallas always want to get the big corporate headquarters relocation? Wouldn’t we be a better candidate for and better off with the factory? Or even better, maybe, with the warehouse?
In the national race to land the new Amazon subheadquarters, the depressing news for Dallas a week ago was that we ranked less than halfway up a list of 65 contenders scored by Moody’s Analytics while Austin ranked No. 1. We paid dearly in the Moody’s outlook for having fewer well-educated citizens and for having one of the nation’s dumbest, most underutilized public transportation systems.
But buried in a story in The New York Times was a number that should have cheered us back up: Most of the enormous growth in high-tech warehousing and logistics in recent years has been in semi-rural and small-town places with good road and rail connections and where labor and land are plentiful and cheap. Dallas is one of only two big urban centers that also have nicked a significant slice of that growth.
While everyone has been moaning and wailing about the erosion in retail jobs, not enough attention has been paid to the hundreds of thousands of new jobs added in e-commerce warehousing since the recovery from the Bush recession began in 2010.
The Times piece didn’t try to explain why Dallas apparently bucked the national trend by drawing new warehouse development into an urban area instead of losing it to the boondocks as most metro areas have, but those of us who remember the story of Richard Allen and the Dallas Inland Port know that answer.
Allen, one of the nation’s savviest logistics developers, came here from California in the late 1990s and began gobbling up land because Dallas had the same thing those favored few rural areas had — great road and rail connections, cheap land, lots of cheap available labor.
A golden gift horse was staring Dallas leaders in the face, and their reaction was: “Get that horse out of here before it tramples the azaleas.” I never got that about Dallas.
I’m a Rust Belt rat. Where I grew up, people looked at big industrial centers as mountains of buried treasure, and we saw ourselves as happy miners. We whistled while we worked.
Dallas always has looked at big industry as dirty and vaguely Yankee, spewing black smoke and beset by crooked union organizers. Maybe it’s some faint, half-conscious echo of an agrarian past.
Poor and working people who badly need jobs that do not require college degrees occupy half of this city. The most effective thing any city or society can do to draw economically marginalized people into the mainstream is to give them a good reason — a job. When jobs show up, hundreds of thousands of people can move over from the social cost column to being social assets.
But the leaders of this city, from the Dallas Citizens Council elite to the mayor at the time to The Dallas Morning News, did everything they could to quash Allen’s project. They saw it as potentially competing with a similar logistics center in Fort Worth owned by a prominent Dallas family. Here, the loyalty of the elite to its members trumped its loyalty to the city, certainly to its southern hemisphere.
The startling thing about the Times story is the indication it offers that the Dallas elite failed to kill Allen’s idea. They drove him off and put him in bankruptcy, but his idea — making southern Dallas a continental logistics hub — was so powerfully prescient that the concept has endured beyond Allen’s personal presence. The Inland Port grows anyway, even with Allen gone, because it was always too good an idea to die. Apparently they couldn’t beat it to death with a pipe-wrench, because they tried. Allen had seen something in the DNA of Dallas that Dallas had forgotten about itself. He knew who Dallas’ real daddy was.
Beginning at some point in the late 1970s, roughly around the advent of the great Sunbelt migration, Dallas started telling this absurd story about it origins. In the Chamber of Commerce magazine and other pulp publications, Dallas called itself “The City that has no reason for being,” as if that were a good thing.
The spiel was that we didn’t have mountains and we didn’t have an ocean, but we pulled ourselves up by the bootstraps anyway through sheer salesmanship. I look back on that and wonder how many corporate and institutional relocation candidates got the willies and ran the other way when they heard that medicine-man nonsense.
What Allen saw was that we had every reason for being. Dallas, like most frontier towns, was founded at a confluence of trails and a river. Our trails hardened into roads, hardened into highways, hardened into railroads and eventually put Dallas at the bull’s-eye of a continental distribution network. Well into the first half of the 20th century, Dallas was a powerful trade and wholesaling hub with connections to the northeast, southwest and northern Mexico.
After World War II, the rise of trucks and freeways and by the contraction of smaller regional cities muddied that picture. But by the 1990s when Allen was looking around, another huge change was afoot.
His family had started in the warehousing business in Ohio, then shifted its emphasis to Southern California. By the '90s, the logistics business was undergoing a revolution. The truck-and-freeway equation was being twisted by rising fuel costs and the arrival in West Coast deep-water ports of huge container ships loaded with Chinese goods. All of a sudden, long-neglected rail was looking like a star again, and everybody needed huge new ultra-modern warehouses.
All of the toughest aspects of the southern Dallas reality — the lack of development, lack of land value, even the poverty and unemployment — were assets in Allen’s eye. Together with a superb hub-and-spoke rail and highway system, all of those presumptively negative factors in southern Dallas became incentives for him to make an enormous personal investment.
With the exception of the Perot family, which owned the competing facility in Fort Worth, most of Dallas just did not get Allen. The Perots spotted the threat immediately and declared publicly that Allen’s Dallas Logistics Hub was a direct, potentially mortal threat to their Alliance Global Logistics Hub north of Fort Worth, which lacked the transportation infrastructure that southern Dallas already had in place.
But most of Dallas’s elite white leadership just didn’t get why anybody would invest a whole bunch of money in the black part of town. The even sadder part of the debacle was that the city’s black elected leaders, led by Dallas County Commissioner John Wiley Price, couldn’t understand, either, why anybody would invest in their part of town, so, in exchange for peanuts, they helped the Perots run Allen off.
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That’s all yesterday, a tale told by idiots, full of sound and fury and seeming at the time to signify nothing. In April, a federal jury acquitted Price on bribery charges after the local U.S. attorney declined to incommode the Perots by calling them to court to testify.
But maybe it’s not nothing. Maybe it’s everything, in fact, for Dallas. The Bureau of Labor statistics does not find Dallas to be one of the state's or nation’s biggest warehousing hubs, but the study cited by the Times finds Dallas to be one of the fastest-growing hubs. Maybe that means that the potential is so great, not even the aging nitwits in the city’s old business elite can blow it for us.
What would happen if we had different business and elected elites in place, people who didn’t have such New York and L.A. wannabe visions of success? What if this city were run by younger people closer to the bone, people who understood the social asset value of industry, of available labor, cheap land and great transportation (not including the silly-string railroad-to-nowhere light rail system)? What if we were less lustful to get the new Amazon sub-HQ than to get a big Amazon fulfillment center?
The warehousing window is finite, as the Times article noted. The robots are already hungry for those jobs, gobbling them up as fast as they can. But there could be enough time left for human beings to do the work and use the wages to transform themselves economically. That would change this city more dramatically and profoundly than any corporate headquarters ever will. After all, we’re really not short on golf-cart cowboy HQ types here as it is, are we?