BG Reads 12.2.2024

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Bingham Group Reads

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December 2, 2024  

➡️ Today's BG Reads include:

🟪 Early voting has started for the runoff elections in Travis County (KUT)

🟪 Texas unveils its new border-area ranch, site of proposed deportation detention facility (Dallas Morning News)

🟪 Biden’s pardon of son, Hunter, to reverberate on Capitol Hill (The Hill)

🟪 Crypto leaders press Trump to create federal bitcoin reserve (Washington Post)

🟪 Trump’s Labor pick signals potential opening to unions (Wall Street Journal)

Read On!

🟪 LINK TO THIS WEEK’S CITY OF AUSTIN HEARINGS + AGENDA

[CITY OF AUSTIN]

🟪 The Austin Council has one (1) regular meeting left in 2024:

• [NEW] December 12 - Austin Council Agenda Link

🟪 MEMO: City of Austin Executive Leadership Team and Organizational Announced (Effective November 4, 2024)

In an October 30 memo, City Manager T.C. Broadnax announced several key additions to the city leadership team, effective November 4.

You can view the memo here: CITY OF AUSTIN MEMO: Executive Leadership Team and Organizational Announcements. An org chart is included on page 3.

We particularly wanted to flag the creation of a Grants Division within the Intergovernmental Relations Office to focus on creating a centralized grant funding strategy and governance for the City that advances City Council’s strategic priorities, leverages local resources, and targets investments for Austin. 

The memo notes “the City lacks a centralized grants function causing us to potentially leave federal and state funding on the table. Staff from across the organization are currently being identified for potential reassignment to the Grants Division.”

[AUSTIN METRO NEWS]

➡️ Early voting has started for the runoff elections in Travis County (KUT)

Travis County voters are returning to the polls to settle a few races that didn't get called last month. Early voting has begun and runs through Dec. 10. Election Day is Saturday, Dec. 14.

A runoff election happens when no candidate gets a majority (50% plus one) of the vote. The two candidates with the most votes face each other in the runoff. If you didn't vote in the general election, you can still vote in this one.

There are three races Austin-area residents will decide this election, depending on where they live.

Voters in Austin City Council District 7 will choose between Gary Bledsoe and Mike Siegel to represent them at City Hall… 🟪 (LINK TO FULL STORY)

➡️ Expert foresees growing AI integration in Austin manufacturing sector (Austin Business Journal)

Kevin Fincher said the use of artificial intelligence in manufacturing in the Austin area is still in the early stages. But the technology is gaining adherents — and quickly.

The president and CEO of the Austin Regional Manufacturers Association said there have been two primary uses so far: on the manufacturing floor, with robotics and automation improving efficiency, and in the back office, to cut down on administrative expenses and functions.

"I think that we're still at the infancy of it," Fincher said. "As more people are adopting and seeing the use of it, I think it will pick up rapidly."

The possibilities are numerous for the region's manufacturers. For example, AI could be used to train optical lenses to ensure parts are built correctly as they roll off an assembly line. Or on the research-and-development side, with engineers building software or humanoid robots that can be monetized.

But where AI is expected to be most used is in data analysis. For instance, manufacturers can rely on data to predict when equipment might need maintenance and have a replacement ready to ensure machines aren't offline long. Or to balance inventory and production by better forecasting seasonal trends.

"What is happening is that manufacturers now understand that data is gold, and all this data that they've had for years and been collecting for years is now something for them to try and use to analyze on different fronts," Fincher said.

While everybody is talking about AI, a big challenge remains — how to implement it. Fincher said the younger and smaller players in the area have been more nimble and agile in adapting to industrywide trends, while longtime manufacturers are having a bit more difficulty implementing AI… 🟪 (LINK TO FULL STORY)

[TEXAS NEWS]

➡️ Eyeing statewide affordability, two new housing conservancy deals include move into Dallas (Austin Monitor)

The Texas Housing Conservancy has closed two new deals for multifamily workforce housing properties, including a Dallas-area acquisition that marks its first step in expanding outside the Austin area.

The nonprofit, which was founded five years ago as Affordable Central Texas and is dedicated to preserving affordable housing for middle-income renters, has completed the purchase as a partner in a 389-unit development just north of the Domain in Austin and a 289-unit property in Uptown Dallas, an area rapidly losing affordability.

These new deals increase THC’s portfolio to 18 properties and more than 2,500 units, marking a significant milestone in the organization’s goal of managing 5,000 units total across the Austin, Dallas, Houston and San Antonio metro areas within the next five years.

Monica Medina, who assumed the role of CEO earlier this year, said the decision to expand beyond Austin was made last year after the board and investors determined the nonprofit’s model was both scalable and impactful.

“Our success in Austin proved the concept,” she said. “We’ve received interest from cities across the country, but our immediate focus is on other Texas markets facing similar affordability challenges.”… 🟪 (LINK TO FULL STORY)

➡️ Texas unveils its new border-area ranch, site of proposed deportation detention facility (Dallas Morning News)

Texas unveiled its newly acquired border ranch — offered as the site of detention facilities to help the Trump administration with proposed mass deportations — and Texas Land Commissioner Dawn Buckingham said Tuesday the state is looking to identify additional land to aid the federal effort.

The General Land Office has more than 13 million acres of land under its jurisdiction, Buckingham said. “If the Trump administration thinks it’ll be helpful, we want to be good partners with them,” she said. The effort, known as the Jocelyn Initiative, is named for Jocelyn Nungaray, a 12-year-old Houston girl who was killed in June. Two Venezuelan immigrants who were in the country illegally have been charged with murder and sexual assault.

“We will continue to fight to ensure that our state remains a beacon of hope, justice and dignity for all who call Texas home,” Buckingham said. In an interview with The Dallas Morning News, Buckingham said her agency is not looking to buy additional land and added she wants to be supportive of the incoming Trump administration.

Buckingham, a former state senator whose agency manages state land, introduced the news media to the 1,402-acre ranch purchased in October for $3.82 million, according to a purchasing agreement obtained by The News. She stood before a portion of border wall the state is building on the property. Buckingham said her agency bought the ranch after the previous owner refused to let the state build its border wall on the property.

Buckingham criticized the former landowner Tuesday, saying her decision to block the border wall contributed to drug trafficking and illegal crossings into Texas. Andrea Kate Sheerin, who sold the ranch to the state, declined to comment when reached via text message Tuesday morning… 🟪 (LINK TO FULL STORY)

AI boom propels a Wild-West-era Texas landowner to 230% stock rally (Bloomberg)

A Texas land company founded during the Wild West era more than a century ago is becoming an unlikely beneficiary of market euphoria over artificial intelligence. Dallas-based Texas Pacific Land Corp., which employs 100 people, has seen its stock more than triple this year, giving it a market value of almost $40 billion. That’s bigger than Halliburton Co., the largest oilfield servicer in North America, and asset manager State Street Corp.

It’s more than four times the size of American Airlines Group Inc., which is based in nearby Fort Worth and has over 100,000 workers. Bitcoin mines, utility-scale batteries and renewable power are already being built on TPL’s 873,000 acres in West Texas, an area bigger than Yosemite National Park. But that could be just the beginning. The swath of land in the oil-rich Permian Basin, where natural gas costs almost nothing, is an opportunity for tech giants like Google owner Alphabet Inc., Microsoft Corp. and Amazon.com Inc. to access cheap electricity for energy-hungry servers.

TPL’s shares surged 14% Friday on the news that the company would replace Marathon Oil Corp. in the S&P 500. “There’s a lot of conversations taking place within the industry and definitely within TPL” about leasing land to data centers, TPL Chief Executive Officer Tyler Glover said this month in a conference call with investors. “We feel that we’re positioned as well as anyone in West Texas to provide land and water solutions as those opportunities unfold.”

AI’s potential to revolutionize how people live, work and play has been the driving force behind the S&P 500 Index’s 50% rise over the past two years. But to realize the real-world profits implied by their stock valuations, Big Tech is plowing money into physical infrastructure. Alphabet, Microsoft, Amazon and Facebook owner Meta Platforms Inc. are expected to spend more than $200 billion next year, according to data compiled by Bloomberg, much of it on data centers.

“A lot of different sectors will be on the receiving end of that,” said Greg Halter, who helps manage $4 billion as director of research at Carnegie Investment Counsel. “You have these oddball entities being revived because all of a sudden they have something valuable.”… 🟪 (LINK TO FULL STORY)

[US and World News]

➡️ Biden’s pardon of son, Hunter, to reverberate on Capitol Hill (The Hill)

President Biden’s pardon of his son, Hunter, is set to reverberate on Capitol Hill this week, as lawmakers react to the news after years of GOP investigations targeting the younger Biden’s business dealings.

The president announced “a full and unconditional pardon” for Biden Sunday night, arguing in a lengthy statement that the charges brought against his son were fueled by politics. Hunter Biden pleaded guilty to nine federal tax charges and was found guilty of three felony gun charges. He was set to face sentencing this month.

The pardon was a sharp reversal for Biden: The president and White House secretary in recent months had said that the president did not plan to pardon his son, reiterating that position even after President-elect Trump won the election… 🟪 (LINK TO FULL STORY)

➡️ Crypto leaders press Trump to create federal bitcoin reserve (Washington Post)

Top cryptocurrency executives and investors are pushing President-elect Donald Trump to create a national stockpile of bitcoin, a move that could more closely tie the little-regulated, volatile industry to the future of the country’s finances.

Trump has publicly expressed broad interest in the idea, though some crypto advocates have urged him to take an even more aggressive step: They want him to acquire tokens worth billions of dollars, then hold them for decades in the hopes they will skyrocket in value and help pay down the national debt.

Economists and fiscal experts say the proposal carries significant risks: Crypto prices can fluctuate wildly, potentially putting taxpayer dollars at risk if the government acquires bitcoin at its current level — near record highs — and its value ultimately falls. They also say a strategic reserve would primarily benefit existing bitcoin owners, who could profit immensely if Trump’s actions send prices soaring and they opt to sell.

“There’s just no discernible logic to do it,” said Mark Zandi, the chief economist at Moody’s Analytics. “I get why the crypto investor would love it. Other than the crypto investor, I don’t see the value, particularly if taxpayers have to ante up.” But crypto magnates have dismissed those concerns as they rally behind Trump, who aggressively courted their support by promising to introduce industry-friendly policies throughout the 2024 election.

Many crypto leaders offer a series of rosy predictions about the fiscal benefits of a new federal crypto cache — claiming, for example, that the projected rise in bitcoin prices could help the government pay down its debt, now around $36 trillion. “If you’re not going to be storing this asset, [which] is essentially digital gold, then your adversaries are going to find opportunities to monetize it,” said Cody Carbone, the president of the Digital Chamber, a lobbying group for the industry. He said a strategic reserve “sets us up for massive financial success.”

The U.S. government currently holds foreign currencies and gold in reserve, while managing emergency stockpiles of medical equipment and critical resources, such as oil, which it periodically releases to try to lower the price of gasoline. Crypto advocates say the government should similarly retain bitcoin, capitalizing on an industry-held assumption that the currency will continue to rise in value as its supply dwindles. The protocol that generates individual coins — through a process known as mining — caps the total number of bitcoins in circulation at 21 million… 🟪 (LINK TO FULL STORY)

➡️ Trump’s Labor pick signals potential opening to unions (Wall Street Journal)

President-elect Donald Trump’s pick of Rep. Lori Chavez-DeRemer to lead the Labor Department could signal a break from the GOP’s traditionally adversarial stance toward unions. Chavez-DeRemer, who narrowly lost her re-election bid to represent an Oregon district this month, is one of just three Republican co-sponsors of the 2023 Protecting the Right to Organize Act, a bill backed by 215 congressional Democrats that would expand workers’ collective-bargaining rights and supersede state right-to-work laws.

The choice, announced by Trump on Friday night, comes in the midst of a fight over labor policy in the GOP, which has faced pressure from some corners to revise its longstanding skepticism toward unions. In a reversal of the usual response to Republican cabinet appointments, the pick earned praise from some union leaders and consternation from businesses and some Republicans. It also added another unpredictable element to Trump’s economic team.

Scott Bessent, a hedge-fund manager chosen to lead the Treasury Department, and Howard Lutnick, head of the Wall Street firm Cantor Fitzgerald and the nominee to lead the Commerce Department, are traditional establishment financiers. Friction arose between them as both vied for the Treasury spot. Russell Vought, who will lead the Office of Management and Budget, is a stalwart conservative who served as budget director in Trump’s first term.

Unlike Bessent and Lutnick, he has deep experience in Washington and the arcana of lawmaking. The nomination of Chavez-DeRemer was praised by the Teamsters, one of the nation’s largest unions, which broke from other unions by not endorsing the Democratic presidential candidate, Vice President Kamala Harris.

Its president, Sean O’Brien, spoke at Trump’s nominating convention in July. “Thank you @realDonaldTrump for putting American workers first by nominating Rep. Lori Chavez-DeRemer,” O’Brien said on X. O’Brien had recommended Chavez-DeRemer to the Trump transition team, and that proved influential, a person familiar with the matter said.

The AFL-CIO was more guarded, acknowledging her “pro-labor record,” but adding, “Donald Trump is the President-elect of the United States—not Rep. Chavez-DeRemer—and it remains to be seen what she will be permitted to do as Secretary of Labor in an administration with a dramatically anti-worker agenda.”

The nomination sparked consternation among business leaders and Republicans. Sen. Bill Cassidy (R., La.), said in a post on X that he “will need to get a better understanding of her support for Democrat legislation in Congress that would strip Louisiana’s ability to be a right to work state, and if that will be her position going forward.”… 🟪 (LINK TO FULL STORY)

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