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Baker Hughes facility in Tomball nears completion

The Baker Hughes Western Hemisphere Education Center is set to open within the next couple of months in Tomball and is expected to not only bring tens of thousands of employees through the facility each year, but also to net millions of dollars in revenue for the city in its first 10 years.

Tomball is also garnering interest from a number of developers looking to build hotels and further develop the city’s east side, an area of town that has remained mostly undeveloped.

“To be able to say that the Baker Hughes Eastern Hemisphere Education Center is in Dubai and its Western Hemisphere Education Center is in Tomball is really something,” said Kelly Violette, executive director for the Tomball Economic Development Corporation. “The opening of the new Baker Hughes facility really puts us on a global map both in terms of bringing people here and name recognition around the world.”

Baker Hughes site

The $55.8 million Western Hemisphere Education Center campus is at FM 2920 and FM 2978 and will consist of a 72,445-square-foot, three-story education building, a 36,000-square-foot workshop, a 16,730-square-foot laboratory and auditorium, and a 156,000-square-foot yard with two non-producing oil training rigs, Violette said.

The new facility is planned to be a facility for major corporate meetings and activities. It will be an integrated facility to enhance the educational opportunities for both Baker Hughes personnel and its customers, and will develop skills and competencies needed to support its customers, she said.

The facility expects to hire up to 50 employees with average annual salaries of $40,000 for support personnel and $80,000 for trainers, Violette said.

Trainees at the facility will be offered oil well training on-site. The city made some changes to its well ordinance to allow Baker Hughes to put training wells on the property, Tomball City Manager George Shackelford said. The training well does not go down into the water and is safe and cased in concrete, he said.

“The well will allow them to do training out there on a 24-hour basis,” Shackelford said. “That’s live training. It doesn’t get any better than that. They are training these people to go out on these wells.”

Economic stimulus

The Baker Hughes education center is expected to bring in 5,500 trainees per month, or 66,000 per year, Violette said. The total net benefit to the city of Tomball is estimated to be $7.8 million in the first 10 years. Violette said the net benefit includes all the direct and indirect benefits to the city, which includes the sales, property, utility and hotel occupancy tax revenues generated from the visitors and the employees, and jobs created by the center. This figure also takes into account any costs the city may incur.

The city of Tomball annexed the 100-acre site where the campus is located into the city limits and provided Baker Hughes with a tax abatement for 10 years for the building and improvements, Shackelford said. The tax abatement means Baker Hughes does not have to pay property taxes on the building for 10 years. The land, however, is still taxable. By annexing the Baker Hughes facility within city limits, it allows the city to benefit economically in a number of ways, he said.

“The 66,000 [people] per year coming through that facility is going to have a tremendous impact on the economy,” Shackelford said. “They are going to stay here, they are going to eat here and shop here.”

Shackelford said he is not going to increase any spending in the 2014–15 budget and is holding off until he sees some history as to the revenue increases the city will see by having thousands come each month.

Tomball business owners are also anticipating the arrival of thousands of people to the area. David Frey, owner of Frey’s Backyard Café, said the area is growing at a very fast pace and businesses, restaurants and hotels will all benefit.

“More people means more mouths to feed and [fewer] people means we all go broke,” Frey said. “It’s a good thing for everyone.”

Hotel occupancy

With the anticipated arrival of thousands of trainees each month through Tomball, the city’s hotels will be filling up, which will help build the city’s coffers through hotel occupancy tax revenues, Shackelford said.

“That’s basically 5,000 room nights a day,” he said. “Let’s just say that half of them drive or are within driving distance, that’s still 2,500 room nights every day. That’s a huge impact on the economy.”

Violette said interest from hotel developers has increased significantly over the last few months from those looking to build hotels on the east side of the city near the new Baker Hughes campus and the Tomball Business and Technology Park.

“There has been a lot of interest in the east side of town due to Baker Hughes, the business park and the road improvements, which make it a more attractive area,” she said. “The first development that goes in on the east side will be the catalyst for continued growth. We are definitely going to see continued growth on Tomball’s east side.”

There are two new hotels that will be built in and near Tomball in the coming years. A four-story, 94-room Staybridge Suites is scheduled to break ground in August at FM 2920 and Mahaffey Road, an area that lies outside Tomball’s city limits but is in close proximity to the city’s east side, said Bruce Hillegeist, president of the Greater Tomball Area Chamber of Commerce.

A Holiday Inn Express with 74 rooms will be built within Tomball city limits near Hwy. 249 and Medical Complex Drive, Shackelford said. A mixed-use planned development called Peck Station—which would contain multifamily housing, commercial and office space, and a hotel—has been proposed by developers to be built near FM 2978 and Snook Lane, he said.

HOT revenues

With one hotel planned within the city limits and another proposed to be within the city limits, the hotel occupancy tax revenues are expected to increase, Tomball Marketing Director Mike Baxter said. Hotel occupancy tax revenues are used for a myriad of purposes, which include funding the city’s marketing department. The city holds seven festivals throughout the year, which are designed to be a tool for generating economic growth in the Tomball area, he said.

“Any funds coming into our program is a big benefit for us,” Baxter said. “It will not only help us to stage larger events with bigger name talent as a headliner, it helps us down to being able to advertise the events more, outside of just the metro area.”

It is unknown how much hotel occupancy tax revenues will increase as a result of two new hotels, but Baxter said he and Shackelford project it to be around $150,000 per year. However, the city will not see those benefits until the 2016 fiscal year, which is largely dependent on how fast the new hotels are built, Baxter said.