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Texas-Size Hopes for MCC's Effect on Austin Economy Quickly Deflated

November 02, 1986|DONNA K. H. WALTERS | Times Staff Writer

AUSTIN, Tex. — Bobby Ray Inman and Microelectronics & Computer Technology blew into town three years ago, borne on a dust storm of excitement and great expectations.

Austin was ready to be a new Western boom town, the best watering hole on America's high-technology trail, and MCC seemed just the spur it needed.

Now, though, some around here talk as if the dust had settled in their mouths.

John Lindley is a real estate consultant who gets asked four, five, even six times a week to tell the story of Austin and MCC. It's a chore he approaches with relish.

At his office in the Echelon complex, black jabs of glass and steel in the rolling hills, Lindley sits with his back to the patchwork aerial map of the city that covers one wall. At times, he interrupts his chain-smoking to reach casually into his breast pocket and pull out a telescoping pointer. He likes to show exactly where the careless developers and speculators lost their shirts in the land-selling frenzy that followed MCC's arrival.

When Peck Young, a local political consultant, does the telling, it's a yarn of money and greed, of expectations unmet and dreams come true. Of how MCC came to town and because of it--or as nearly as anyone could say in such matters--Austin grew up.

"To Austin, MCC is more symbolic than tangible. It's like Spindletop to this community," said Young, referring to the gusher near Beaumont that was the wellspring for Texas' oil wealth. "Austin used to be a city that felt like a town, now it . . . feels like a city."

Took Wealth From Ground

Texas, Young likes to explain, always took its wealth from the ground--cattle, cotton, coal and oil, and lately, real estate. But as in many other areas across the country, the political and business leaders of Texas were turning envious eyes to Silicon Valley, an area in Northern California's Santa Clara Valley that had snubbed its orchards for more cerebral fruits--the microchip and the computer.

Austin, the state's capital, always relied on government and the university to give it immunity from the boom-bust cycles that afflicted the rest of the state. But, under the Legislature's tutelage, it began trying to diversify its economy.

"Instead of King Cattle, King Cotton, or King Oil, it was now going to be King Microchip," Young said. "Now, we were going to be the new Silicon Valley. Instead of digging it out of the ground, we were finally going to use our heads to make money."

When Inman took MCC's search for a site public, 57 cities in 27 states entered the bidding.

Austin was already in the midst of rapid growth. IBM, Texas Instruments and other high-tech companies had been lured to the attractive city nestled in the river-fed hill country. But it wasn't so overcrowded with high-tech companies that MCC would be just another member of the pack. It had a highly educated population, an acclaimed "live-ability," historically low unemployment rate and the University of Texas, home of a respected engineering college.

The way Lindley sees it, once it was clear that Austin had a chance of landing MCC, "it became a matter of pride for Texas to win. Had they (MCC) not had the national publicity, they would not have gotten anywhere near the concessions."

$60-Million Package

After the state made its proposal to MCC, a package of more than $60 million in public and private support, it was no longer a contest.

Included were a $23.5-million building at University of Texas' Balcones Research Park, which MCC leases for $1 a year, low-cost mortgage loans for MCC employees, use of a Lear jet for a year (privately donated, at a cost of about $1 million) and nearly $40 million from University of Texas and Texas A&M for expanded electronics and computer sciences programs.

But the state, in its energy-weary economy, is in a crunch of its own; the fund to pay for MCC's building is still about $7.5 million short.

MCC's presence has encouraged other companies, such as 3M, Motorola and Lockheed, to locate relatively small facilities in the city, but it did not have the wide-ranging pull some had hoped.

For one thing, the technology industry has been going through rough times of its own in the past two years. Austin has felt the pinch of layoffs and plant closings as high-tech companies have retrenched.

For another, the city has not yet become a haven for start-up companies. Most of Austin's venture capital still goes out of state, the city's business leaders admit. "There's no venture capital market here," said George More, a high-tech entrepreneur who was on the committee to recruit MCC. More founded Bird Circuits, a manufacturer of printed circuit boards, but with little help from home-based venture capital.

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