The Tech Bust

Occupancy Rates Decline
100% Occupancy
Industrial
rates fell by
95.8%
90% 94.2%
91.8%
Office
80% nearly 20%
82.7%
81.2%
from 2000
77.1%
77.0%
76.8%
70%
to 2003.
60%
50%
40%
30%
20%
10%
0%
2000 2001 2002 2003
Source: CB Richard Ellis (industrial) & Colliers
Oxford (office).

COA Sales Tax Revenue
Declines
$120
By 2003, the city’s
$117.8 $117.4 revenue from sales
tax had dropped
$115
$13 million,
$110.2 severely impacting
$110 services.
Millions
$105.0
$105
$100
$95
2000 2001 2002 2003
Source: Texas Comptrollers Office

Venture Capital
Investment Declines
$2,500
By 2002, venture
$2,076
capital investment fell
$2,000
to 20% of what it had
been two years earlier.
Millions
$1,500
$1,059
$1,000
$448 $496
$500
$0
2000 2001 2002 2003
Source: PricewaterhouseCoopers/Venture Economics/NVCA.

Meanwhile…
Austin had taken itself out of the
economic development “game”
Austin Chamber’s economic development funds
were being diverted for operations – annual
funding for economic development was
$500,000
Chamber’s website for site selection and
business relocation/expansion was “under
construction”. . . for over 5 years
Chamber had one full-time staff member
focused on economic development
A City employee skipped a meeting with a
major auto manufacturer

Opportunity Austin
5-Year Plan
Program Goals:
72,000 net new jobs
$2.9 billion net increase in
payroll
$14 billion in GRP

Opportunity Austin
5-County Region

The Beginning of
Opportunity Austin
We raised $14 million in 2004
($3 million over our goal!)

Summary of Results
5-Year 5-Year
Result Goal
New Jobs 124,200 72,000
Payroll Increase $5.7 Billion $2.9 Billion
Corporate relocation
144 100
announcements
Out-of-region visits 835 500
Prospect visits 540 250
Regional retention
857 475
visits

Opportunity Austin
Relocations By Target Industry Sector
(2004-2008)
Clean Energy 6
Data Center 5
Digital Media 15
Headquarter/Regional Office 29
Life Sciences 13
Semiconductor 13
Software 17
Wireless 8
Other IT 11
Other 27
TOTAL 144

Opportunity Austin

Job Creation
Largest 100 Metros
Nonfarm 2003-2008 1998-2003
jobs, Dec.
2008 Diff. % Ch. Rank % Ch. Rank
Austin MSA 783,300 124,200 18.8% 1 6.4% 26
Raleigh MSA 516,600 72,500 16.3 2 5.1 38
Houston MSA 2,628,100 336,600 14.7 3 2.9 50
Las Vegas MSA 899,700 114,700 14.6 4 22.1 2
Salt Lake City MSA 646,100 78,300 13.8 5 3.1 49
San Antonio MSA 856,700 99,300 13.1 6 5.0 39
Tulsa MSA 439,800 47,100 12.0 7 -2.3 84
Fort Worth MDiv 884,200 93,800 11.9 8 3.6 46
Durham MSA 292,800 31,000 11.8 9 2.1 57
Dallas MDiv 2,119,600 222,100 11.7 10 0.6 69
Baton Rouge MSA 380,400 39,500 11.6 11 2.7 53
Orlando MSA 1,064,900 109,600 11.5 12 9.4 13
Charleston MSA 296,200 28,800 10.8 13 7.4 19
Boise City MSA 263,600 25,500 10.7 14 11.4 7
Wichita MSA 313,300 29,500 10.4 15 -5.1 97
Source: U.S. Bureau of Labor Statistics.

Employees on Non-Farm
Payrolls 2003-2008
20% 18.8%
18%
16%
14% 12.9%
12%
10%
8%
6%
3.7%
4%
2%
0%
Austin MSA Texas United States
Source: U.S. Bureau of Labor Statistics.

Real Estate Absorption
4.5 +41,700
4.0
3.5 Office
+24,800
3.0 Industrial
Millions of Sq. Ft.
2.5 +22,700 +25,100 +9,900
2.0
1.5
1.0 -1,300
-5,800
0.5 -23,900
0.0
-0.5
-1.0
-1.5
-2.0
-2.5
2001 2002 2003 2004 2005 2006 2007 2008
Source: CoStar.

Office Building Sales
250 +24,800
Transactions
+9,900
200 +25,100
+41,700
Avg Price/SF
150
-23,900 -5,800 +22,700
-1,300
100
50
0
2001 2002 2003 2004 2005 2006 2007 2008
Transactions 7 11 11 23 33 14 33 18
Avg Price/SF $115 $118 $100 $121 $174 $172 $249 $199
Source: Sperry Van Ness, Advisor Insights.

Existing Home Sales
+41,700 +24,800
$8
$6.96 $6.91
$7 +25,100
+9,900
$6 +22,700 $5.66 $5.46
-1,300
Billions
$5 +33,100 -23,900 -5,800 $4.49
$3.90
$4 $3.56 $3.56 $3.70
$3
$2
$1
$0
2000 2001 2002 2003 2004 2005 2006 2007 2008
Source: Real Estate Center at Texas A&M University.

>>Opportunity Austin 2.0

A challenging time…

Austin Companies in the
News in 2008
Advanced Micro Devices Jewelery Channel closes in Round Rock
lays off 364
Applied Materials lays off 650
Midway Games cuts 50
Austin jobs
Dell eliminates 900 manufacturing jobs
300 jobs lost with ModusLink
Aquatic Industries closes Leander closing in Round Rock
plant
Education Finance partners closes NCsoft downsizes
student loan service center
Austin Studio by 100
Freescale downsizes by 138 jobs
Harcourt Education eliminates
200 jobs

Austin Companies in the
News in 2009
Google closes recently
established Austin office
Applied Materials downsizing Spansion cuts 163 Austin
continues with another 60 layoffs jobs
Sun Microsystems prospects
uncertain following acquisition
Freescale downsizes by 319 jobs

Fastest Growing Among
Top 50 Metropolitan Areas
Non-farm Growth June ‘08-June ‘09
payroll jobs Rank
June ‘09 Difference % Ch.
Austin MSA 778,700 -1,200 -0.2% 1
San Antonio MSA 855,900 -6,300 -0.7 2
Virginia Beach MSA 774,000 -7,600 -1.0 3
Fort Worth MDiv 869,000 -13,700 -1.6 4
Newark MDiv 1,031,500 -16,800 -1.6 5
Washington MDiv 2,411,200 -41,000 -1.7 6
Columbus MSA 931,600 -15,900 -1.7 7
Memphis MSA 616,800 -12,900 -2.0 8
Kansas City MSA 1,008,300 -21,300 -2.1 9
Dallas MDiv 2,078,200 -44,600 -2.1 10
Source: U.S. Bureau of Labor Statistics.

Fastest Growing Among
Top 50 Metropolitan Areas
Growth June ‘08-June ‘09
Non-farm
payroll jobs Rank
June ‘09 Difference % Ch.
Baltimore MSA 1,296,200 -32,000 -2.4 11
New York MDiv 5,187,700 -130,300 -2.5 12
Boston MDiv 1,687,800 -46,000 -2.7 13
Houston MSA 2,550,900 -69,600 -2.7 14
Pittsburgh MSA 1,135,400 -31,200 -2.7 15
Philadelphia MDiv 1,880,600 -54,500 -2.8 16
Nassau MDiv 1,249,200 -40,300 -3.1 17
Richmond MSA 616,100 -21,800 -3.4 18
Indianapolis MSA 890,000 -33,000 -3.6 19
Miami MDiv 1,000,700 -37,200 -3.6 20
Source: U.S. Bureau of Labor Statistics.

Job Growth, Peer Metros
June 2008-June 2009
0%
-0.2%
-1%
-2%
-3%
-3.0%
-4%
-3.9%
-5% -4.3% -4.3%
-6%
-7%
-8% -7.6%
Source: U.S. Bureau of Labor Statistics.

Opportunity Austin 2.0
Opportunity Austin 2.0 Five Year Approved
Budget $21 Million
$100,000 Economic diversification
0.5% $1,000,000
$483,897 4.8% Business retention & expansion
2.3% $426,878
2.0% Education
$1,362,349
6.5% Talent attraction
Improve transportation system
$732,743 Keeping Greater Austin Great
3.5% Investor relations
$8,509,907 Fundraising campaign
40.5%
Opportunity Fund
$6,272,472
29.9%
$2,111,754
10.1%

Opportunity Austin 2.0
Comparison Cities
$70
$60.0
$60
$50
Millions
$40
$30 $25.0 $22.5 $22.5 $22.0
$21.0
$20 $17.0 $17.0
$10
$0

Opportunity Austin 2.0
• Campaign launched in May 2008
• 312 companies/organizations have pledged to
invest in O.A. 2.0
• 153 - new investors
• Contributions are up 67% from original
investors
• Total as of August 31, 2009: $18,329,400

Opportunity Austin 2.0
Efforts as of August 2009
August 09 August 08 2009 YTD Annual Goal 5 Year Goal
OUT OF REGION VISITS 26 9 180 120 600
SOURCES OF LEADS 22 102 181 80 500
State 2 28
Site Consultants 4 22
National Broker 6
Local Broker 2 19
Web 2 10
Out of Region Visits 1 42
Direct Company 5 23
Referral 6 31
LEAD GENERATION 81 350 500 2500
Cold Calls 48 203
Out of Region Visits 17 110
Electronic Communication 16 37
PROSPECT FOLLOW UP REQUEST 206 1316
PROSPECT VISITS 15 9 99 40 300
New (1st) 7 54
Repeat 8 45
ANNOUNCEMENTS 1 2 9 15 115
REGIONAL RETENTION VISITS 87 29 420 360 1800