When a business owner wants to relocate, the task can seem daunting. However, by exploring some key considerations, you can prioritize the move and find a location that works well for your present company and your future growth.

One such location — Irving, Texas — is in the Dallas-Fort Worth Metroplex. Irving has more than 8,500 businesses already operating in the region.

“You need a value-driven proposition,” says Carter Holston, general manager of Real Estate NEC Corporation of America. “You have to have a good location. You have to have a great office space. You have to have access to your employees and pay the right amount of tax, both school and other. All that goes into the mix when you make the decision.”

Smart Business spoke with Holston about what employers need to consider for relocation and why the Greater Irving-Las Colinas area fits that bill.

If you’re thinking of relocating to a new city, what needs to be considered? How does that relate to the Irving area? 

There are three components any company needs to weigh:

• Workforce.

• How you access the workforce, the accessibility within the region, and how you move about via the roadways and mass transit.

• The business-friendly environment.

Irving is in the center of the Dallas-Fort Worth Metroplex, so access to an available work force is not a problem. The area also is adjacent to a major airport — the Dallas/Fort Worth International Airport.

The Irving area has accessibility from the standpoint of mass transit, which is a game changer in business today. The new work force prefers living, working and playing in the same area.

Then there’s the business-friendly environment, one of the most important factors. Companies need to be in cities that believe in business, that understand the revenue derived from taxes and what it means to have citizens employed.

What’s the current state of Irving’s commercial real estate market?

Commercial real estate in Irving is firming up. Generally Texas and specifically Irving represent good market value to corporations considering relocating.

Irving has more than 30 million square feet of commercial office space and is the third-largest submarket in the Dallas-Fort Worth Metroplex. Typically, there is about a 20 percent vacancy rate, which has been as high as 25 percent, so Irving is a value-driven market. Most companies seem to be taken aback at the leasing rates in Dallas compared to other regions.

Irving also has a new light rail system running through the central urban center, which should positively affect commercial real estate.

What else makes the North Texas region so attractive?

Texas and Dallas, in particular, are ‘can do’ regions. There’s no geographic reason for Dallas to exist, no great river system or other natural resources. In spite of its lack of natural resources, the people who settled here on the prairie a long time ago made it work, and that theme and attitude have carried through the years. Even when the oil business was in decline, Dallas found a way to diversify and sought other industries to attract such as banking and insurance, real estate and huge service industry providers.

This ‘can do’ attitude holds true for the area’s longevity and its future, which is based on finding a way to get things done.

How can an employer find tax breaks and incentives when moving into a new area?

You should be represented well and ask your representative what types of incentives have been granted previously.  However, don’t let incentives be the only factor that you consider when relocating your company.

The Greater Irving-Las Colinas area is certainly very affordable with available space and incentives. It’s clearly a value driven proposition for business owners in a business-friendly environment.

Holston oversees all domestic commercial real estate functions at Real Estate NEC Corporation of America and is responsible for more than 1 million square feet of leased and owned facilities. He also serves as a consultant to the Irving Economic Development Partnership at the Greater Irving-Las Colinas Chamber of Commerce.

Carter Holston is general manager of Real Estate at NEC Corporation of America. Reach him at (214) 262-2190 or carter.holston@necam.com.

Insights Economic Development is brought to you by the Greater Irving-Las Colinas Chamber of Commerce

Published in National

During the first four years of his now decade-long stint at the helm of Tenet Healthcare Corp., Trevor Fetter spent a lot of time putting out fires. The company was embroiled in a couple of delicate litigation issues left over from its previous regime, and those cases drained the newly appointed CEO’s energy and focus.

Unfortunately, the legal entanglements left Fetter with little time to address a significant problem that had begun to affect both his company and the health care industry at large: a long-term growth slump that began in 2003 and persists to this day.

“From 2003 to 2006, I was focused most intensely on fighting fires and resolving legacy problems,” Fetter says. “But you could see the early signs of the slowing of growth in our industry around the beginning of 2003.”

The slowdown was largely being driven by a conscious initiative of employers and insurance companies to reverse the tide of ballooning health care costs. Companies were beginning to shift a portion of the health care costs they had traditionally borne onto their employees by increasing out-of-pocket payments such as co-pays and deductibles.

“Behind the scenes, employers’ HR departments were fixated on the percentage of total health care costs being borne by the company versus the employee,” Fetter says. “They were trying to move it from, say, an 80-20 ratio to a 70-30 ratio. And that made a big difference in the take-home pay of employees across American industry.”

It also started to make a dent in the revenue of companies such as Tenet, which owns and operates 49 hospitals and about 100 outpatient centers in 11 states and generated $9.58 billion in revenue in its most recent fiscal year.

“That and other factors have resulted in a prolonged reduction in the growth rate for our industry,” Fetter says. “And if that weren’t enough, when the recession came along in 2008, the suppression of growth expanded, and it has persisted. So our big challenge over the past few years has been how to overcome these pressures against growth.”

Tenet has faced that challenge by launching a handful of initiatives that, taken as a whole, have transformed the company into an innovator and a model for a more sustainable way to deliver health care services in the coming decades.

React to shifts

The first of these new programs, kicked off in 2007 and was dubbed the Target Growth Initiative. The program’s goal was to revise the Tenet hospitals’ menu of services to better fit the changing demographics of their communities, thus making them more competitive in their markets.

“What we did was to deconstruct our hospitals and look at them as a collection of service lines within a fiscal infrastructure,” Fetter says. “When you look at a hospital that way, you realize that some of the services you’re providing to the community are in a permanent state of decline, generally fueled by demographic trends.”

As an example, Fetter cites a hospital serving an aging community. In that type of market, the demand for maternity services will naturally decrease while the demand for cardiac services will naturally rise.

Tenet’s Target Growth Initiative enabled it to get out in front of these types of trends by investing more in service lines for which the demand was growing, even though that often came at the expense of cutting service lines for which the demand was shrinking.

“An example of this was at one of our hospitals in Los Angeles where they needed more space for operating rooms and equipment related to treating cardiac disease, while they had excess capacity for maternity and obstetrics,” Fetter says. “Another factor we had to consider is that in Los Angeles it takes forever to get permission to change a physical facility. It’s very difficult and very expensive.”

Tenet’s leaders also realized that there were competing hospitals nearby that had large, established maternity and obstetrics departments. So the company solved the puzzle by shutting down its maternity services at the Los Angeles hospital and using the freed-up space and resources to expand its cardiology capabilities.

“We repurposed those facilities to satisfy the need of the growing cardiology business,” Fetter says. “A change like that can make a huge difference if, for example, someone is having a heart attack. It might shorten their ambulance ride by 10 to 15 minutes. That can make a real difference in saving lives.”

Standardize services

Another program launched by Tenet in 2008, the Medicare Performance Initiative, is aimed at motivating physicians to standardize their treatment methods to cut costs, increase efficiency and improve patient outcomes.

Fetter and his team put together this initiative to address a number of inefficiencies they had observed both at Tenet’s hospitals and at other health care providers’ facilities: wide variations in the treatment of patients with the same condition, physicians ordering duplicate tests, overuse of supplies, keeping patients hospitalized longer than necessary and keeping patients on medication longer than necessary.

“Basically this initiative, which is ongoing and permanent, is a massive exercise in collecting data in order to show physicians that there’s tremendous variation in the ways they treat one person versus another who have the same medical condition,” Fetter says.

“In our business, lower cost usually equals better quality. Getting somebody out of the hospital sooner is better than leaving them in longer. You get them active again; you get them out of an environment where there are other sick people. The same goes for excessive amounts of tests and medications and everything else.”

The result at Tenet’s hospitals has been a gradual standardization of physicians’ patterns of care and treatment and the emergence of a set of best medical practices.

“What we are trying to do is to look at those variations, and where the variations do not help patients or help the cost of care, we are addressing them,” Fetter says.

With a system as large as Tenet’s — the company estimates that its hospitals and treatment centers amass 4 million patient encounters a year — the resulting standardization and efficiencies have produced a bounty of positive results for Tenet.

“We’ve had some staggering results,” Fetter says. “From 2009 to 2011, we saved $145 million. And we project that over a six-year period, going all the way through 2015, the cumulative savings will be about $375 million. So we’re talking about a tremendous amount of money.”

Go inside out

Among the other initiatives Tenet has launched in recent years, the company in 2008 formed a subsidiary, Conifer Health Solutions, to offer revenue-cycle services and patient communications to other hospitals and health care providers.

“Conifer represents a significant part of how we’ve dealt with our growth challenge,” Fetter says. “The idea for this came from the recognition that our company — and our headquarters in particular — was basically a service center serving 50 hospitals across the United States with a variety of services, and there was no reason we couldn’t provide those services to hospitals other than ours — and that this could be a vibrant business for us.”

The Conifer subsidiary has indeed proven to be a vibrant business for Tenet. Bolstered by several acquisitions, the fast-growing unit now serves almost 400 health care entities across the United States.

“Sitting here today, we have built the leading company in our industry that serves hospitals in the revenue cycle,” Fetter says. “This company that we started out of Tenet is on track to do more than $150 million a quarter in revenue, and it’s growing very rapidly.”

A lesson to be drawn from Tenet’s Conifer venture is that business leaders would be wise to keep their eyes peeled for opportunities to convert an in-house service into an outside revenue generator.

“The idea for taking these services outside of our company really germinated here within the leadership of our company,” Fetter says. “I’d had some prior experience doing something similar to this, and we decided to take it outside in a serious way at the beginning of 2008.

“So I’d advise other CEOs to examine the skills you have within your company and ask yourself if those skills can be used as a stand-alone line of business. That’s a concept that could work well in a lot of different markets.”

Ultimately, Fetter attributes his company’s emergence as an innovator in its field to his leadership team’s laser-like focus on Tenet’s customers’ needs and wants.

“It’s imperative to understand your overall business environment from the customers’ perspective,” Fetter says. “There’s no point of view more valuable than your customers’ point of view.”

To reach that point, Tenet’s leaders had to accept that the company’s customers were dissatisfied with both the high prices and the low quality of the services they were receiving and then put together an action plan to deal with that blunt realization.

“Our strategy for addressing that was to institute major improvements in quality and to attack our costs aggressively so that we could provide a cost and quality advantage relative to our competitors,” Fetter says. “That’s applicable in any business. You have to understand the customers’ point of view, understand what your competitive advantages and disadvantages are, and design strategies in order to build competitive advantage.” ?

How to reach: Tenet Healthcare Corp., (469) 893-2000 or www.tenethealth.com

The Fetter File

Trevor Fetter

President and CEO

Tenet Healthcare Corp.

Born: San Diego, Calif.

Education: MBA, Harvard University; bachelor’s degree in economics, Stanford University

Looking back at your years in school, can you identify a business leadership lesson you learned there that you use today?

The most important thing that applied to business and to my work is fact-based analysis — the importance of seeking the facts and trying to make decisions based at least partially on factual analysis. In the end, it doesn’t mean that every decision can be reduced to something analytical and quantitative, but you ought to have the best possible fact-based information you can get before you make an important decision.

What was your first job, and what business lessons did you learn from it?

My first job out of college was as an analyst in an investment banking firm inNew York. Among the lessons I learned, and this sometimes drives some of my colleagues crazy, is the importance of making a great presentation and having it be accurate and delivering it on time. When you’re in a customer service business, presenting your ideas in a coherent, persuasive and high-quality way is really important.

Do you have a main business philosophy that you use to guide you?

I think it’s embodied in the values we have at Tenet, which are very transparent: The patient comes first; having integrity in everything we do; and the fact that we don’t mind being measured. We are eager to provide quality data to every legitimate organization that wants to measure it. We welcome that degree of examination and transparency.

What’s the best advice anyone ever gave you?

One pithy bit of advice came from a gentleman early in my career, a wise investment banker whose name I can’t remember. He said, “A perfectly good way to answer to a question is, ‘I don’t know, but I’ll find out.’ ”

Published in Dallas

When a business owner wants to relocate, the task can seem daunting. However, by exploring some key considerations, you can prioritize the move and find a location that works well for your present company and your future growth.

One such location — Irving, Texas — is in the Dallas-Fort Worth Metroplex. Irving has more than 8,500 businesses that are already operating in the region, including the headquarters of five Fortune 500 companies.

“You need a value-driven proposition,” says Carter Holston, general manager of Real Estate NEC Corporation of America. “You have to have a good location. You have to have a great office space. You have to have access to your employees and pay the right amount of tax, both school and other. All that goes into the mix when you make the decision.”

Smart Business spoke with Holston about what employers need to consider for relocation and why the Greater Irving-Las Colinas area fits that bill.

If a business is thinking of relocating to a new city, what does it need to take into consideration and how does that relate to the Irving area? 

There are three components that any company needs to consider:

  • The work force.
  • How you access the work force, the accessibility to the region, and how you move about via the roadways and mass transit.
  • The business-friendly environment.

Irving is in the center of the Dallas-Fort Worth Metroplex, so access to an available work force is not a problem. The area is adjacent to a major airport — the Dallas/Fort Worth International Airport — allowing you to get your people in and out of the city in an easy and efficient manner.

The Irving area also has accessibility from the standpoint of mass transit, which is a game changer in business today. The new work force is more mobile and prefers living, working and playing in the same area instead of driving long distances to and from work.

Then there’s the business-friendly environment, which is probably one of the most important factors. Companies need to be in cities that believe in business, that understand the revenue they derive from taxes and what it means to have their citizens employed.

What’s the current state of the commercial real estate market in the Irving area?

Commercial real estate for Irving is on the rise, generally, and Texas, itself, is a good market for companies and corporations to consider relocating to.

Irving has more than 30 million square feet of commercial office space and is the third-largest submarket in the Dallas-Fort Worth Metroplex. Typically, there is about a 20 percent vacancy rate, but that has been as high as 25 percent, so Irving is a value-driven market.

With 30 million square feet, there are some large blocks of space that are available at affordable rates. Most companies seem to be taken aback at the leasing rates in Dallas compared to other regions.

Irving also has another game changer that just opened in July — a light rail system that runs through the central urban center. That mass transit will affect commercial real estate in a positive way in Irving.

What else makes the North Texas region so attractive?

Texas, in general, and the Dallas region, in particular, are ‘can do’ regions. There’s really no reason for Dallas to be on the map. There’s no geographic reason for Dallas to exist, no great river system. However, the people who settled here on the prairie a long time ago made it work, and that theme and attitude have carried through the years. Even when the oil business was not good, Dallas found a way to diversify and found other industries to attract, such as technology, oil and gas, banking and insurance. Just about every sector of the economy is represented in North Texas, and the Dallas area specifically.

This ‘can do’ attitude holds true for the area’s longevity and its future, which is based on finding a way to get things done.

How can an employer find things such as tax breaks and incentives when moving into a new area?

First, look at what is important to you. There are a variety of tools that each region and city has to offer. The tax breaks, in and of themselves, shouldn’t make the decision for you. The decision to relocate should be based on where you can get a fair deal — where the value deal is found.

That said, for new construction, there are many incentives available, varying greatly by city. You should have a good broker representing you who has access to incentives and knows what has been granted in the past. You should be represented well and compare with past incentives, but don’t let incentives be the only thing that makes up your mind.

The Greater Irving-Las Colinas area is certainly very affordable with available space and incentives, but it’s also a great product in a business-friendly area.

Carter Holston is general manager of Real Estate NEC Corporation of America, where he oversees all domestic commercial real estate functions and is responsible for more than 1 million square feet of leased and owned facilities. In addition, Holston serves as a consultant to the Irving Economic Development Partnership at the Greater Irving-Las Colinas Chamber of Commerce. Reach him at (214) 262-2190 or carter.holston@necam.com.

Visit the Greater Irving-Las Colinas Chamber of Commerce at www.irvingchamber.com.

Insights Economic Development is brought to you by Greater Irving-Las Colinas Chamber of Commerce

Published in Houston

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Published in Dallas