Scott Ball / Rivard Report
More than 150 jobs could be coming to downtown San Antonio by way of a British e-commerce company that is considering moving its U.S. headquarters here, contingent on local government bodies' approval of an economic incentive package.
Mayor Ron Nirenberg and Jenna Saucedo-Herrera, who heads the San Antonio Economic Development Foundation, shared details of the deal on Tuesday.
Slated for Bexar County Commissioners' consideration Tuesday and a San Antonio City Council vote on June 21, the pending deal with England-based e-commerce company The Hut Group is being touted as a big win in a target industry for the city. San Antonio was competing with Salt Lake City, where the company's current North American headquarters resides.
"We're not only getting a company that is going to employ San Antonians in a key industry, we're also getting a very active mover in the tech spaces," Nirenberg said. "This is a big moment for us."
The Hut Group owns and operates several e-commerce brands in the areas of beauty, wellness, luxury clothing and accessories, and lifestyle. Jobs created will be high-paying, Saucedo-Herrera said, all north of $70,000 a year and with an average annual salary of $85,000.
An economic development foundation representative said the company would look to hire engineering, sales, software development and technical development personnel to staff the San Antonio office.
"We're extremely excited about the types of jobs not just by way of wages but also ... what that means for our growing tech industry, specifically downtown," Saucedo-Herrera said.
Its move to San Antonio would prop the company up for continued expansion of its technology division called THG Ingenuity, according to a press release.
Nirenberg said the deal is projected to have a $152 million impact on the San Antonio economy over the next five years.
The Hut Group, which could not be reached for comment prior to publication, recently published such job postings as an opening for its director of marketing in San Antonio. In the description, the company notes it is in the midst of "growing incredibly fast worldwide on the way to becoming the world’s most influential online retail organization."
The company must hit its performance benchmarks to receive the incentives. Reaching the targeted 165-job objective would trigger the release of a City Economic Development Incentive Fund grant of up to $500,000 and $250,000 from the Bexar County Innovation Fund if City Council and County Commissioners, respectively, approve those measures. Saucedo-Herrera said she expects the company will exceed that target.
The Hut Group would occupy 5,200 square feet in the Commerce Building at 314 E. Commerce St. downtown. Established in 1902, the 36,000-square-foot building is undergoing significant renovations to accommodate mixed-use retail and office space. According to CREO Architecture, the firm that designed the renovation project, the update will be complete in 2019.
According to its 2017 annual report, The Hut Group has more than 4,000 employees worldwide after creating 1,884 jobs last year with plans to add 2,000 positions in 2018. It keeps offices in 10 cities in the United Kingdom, United States, Europe, and Australia.
The company was valued at $3.5 billion in 2017, Nirenberg said.
Saucedo-Herrera and Nirenberg said Greg Rodriguez, former vice president of sales at Rackspace who now helps lead The Hut Group's American operations, was instrumental in selling the firm's U.K.-based executives on the merits of San Antonio and its tech scene.
Part of the courting process included taking executives to the NCAA Men's Final Four hosted in San Antonio at the Alamodome, Saucedo-Herrera said.
She said the original lead was unique in that – instead of being a referral from the State of Texas – it came from local co-working space Geekdom, which sometimes consults with tech companies large and small considering relocating to San Antonio.
Geekdom leaders brought The Hut Group's interest to the attention of the San Antonio Economic Development Foundation and City leaders. Geekdom's Board Chairman Lorenzo Gomez was in the room to help deliver the initial pitch, Saucedo-Herrera said.
“San Antonio will provide a strong launching point for THG Ingenuity’s expansion in the U.S. market,” City Manager Sheryl Sculley said in a press release. “This is a great example of our community’s collaborative efforts attracting an international company and high-wage jobs to our city, and it further illustrates that San Antonio is a great place to grow a business.”
Nirenberg said the fact that tech companies want to set up shop in San Antonio illustrates the city has a strong technical workforce. According to one report, San Antonio was home to approximately 33,000 information technology jobs last year.
"They see strength in the workforce here," Nirenberg said. "I don't think The Hut Group or any of the other prospects we're talking to or have landed would have chosen San Antonio if they didn't see the ability to hire locally. That's always a preference for us, but it's certainly a necessity for them because they can't move over here."