Compedia, Plug and Play Tech Center, PD Labs closer to planting roots in suburb.
About two years ago, the Cedar Park City Council tasked its economic development team with marketing the fast-growing suburb northwest of Austin to international companies.
Among the efforts included a trip to Israel 18 months ago, where City Manager Brenda Eivens and Economic Development Director Ben White met with more than 30 companies in a five-day span.
That initiative was realized Aug. 24, when one of those companies — Compedia — was unanimously approved for incentives to move its North American headquarters to Cedar Park. The immersive educational software company could bring 228 software jobs to the city over the next 10 years.
“This is a giant win for us tonight. This is a big one for us,” White said during the Aug. 24 meeting. “This was an 18-month courtship that we’ve been through to get to this point.”
Compedia was one of three companies approved for incentives in late August. Plug and Play Tech Center, a Silicon Valley-based company that bills itself as a conduit for corporate innovation and startup funding, also won approval, along with Cedar Park-based Prescription Dispensing Laboratories Inc., which is building a new headquarters in its hometown. All three projects unanimously passed the City Council on Aug. 24 and the Cedar Park Economic Development Type A Corp. on Aug. 22.
Should the companies move forward with their plans, they could bring about 250 jobs to Cedar Park, which is about 20 miles northwest of Austin and had a population of 77,642 in 2022, according to the U.S. Census Bureau estimates. The city is home to several fast-growing companies, including rocket maker Firefly Aerospace Inc. and electric-vehicle trucking company Hyliion Holdings Corp. (Nasdaq: HYLN).
Tracking down the big fish
The biggest win, in terms of potential job numbers, is Compedia, which plans to put a facility at 202 Walton Way. The company was founded in 1988 and develops immersive educational tech platforms that gamify learning with virtual and augmented reality, according to its website. Past customers include Sony Group Corp. (Nasdaq: SONY), Samsung Electronics Co. Ltd. and Intel Corp. (Nasdaq: INTC).
The 10-year performance agreement with Compedia USA Inc. — codenamed “Project Learn” in economic development discussions — provides Compedia with $150,000 if it occupies the facility no later than Dec. 1; up to $450,000 based on employee and salary requirements that max out at 228 employees earning at least $22.8 million combined no later than Dec. 1, 2033, or an average salary of $100,000; employee relocation bonuses that equate to $10,000 per home purchased, for a maximum of $250,000; and a $5,000 membership to the Cedar Park Chamber of Commerce, according to city documents.
City officials estimated that the rate of return on the public dollars being invested in the project would be nearly 13%, according to the documents, and that the EDC would recoup the value of the investment in roughly eight years via taxes and other sources of revenue.
Compedia Vice President Asi Meskin previously said the plan is to move into the 3,000-square-foot facility over the next two months and ramp up operations by January. Compedia, which has 100 employees in Israel, will start with a small team in the Austin area. Eventually, if the company follows projected growth trajectories, it would need to lease or build a bigger space.
Meskin said Compedia has already launched partnerships with the University of Texas, Austin Community College and Sylvia Earle, a well-known marine biologist, who plans to work on a project with National Geographic in Cedar Park.
“For us, it’s a big strategic move,” Meskin said, adding that additional funding for the project comes from private investors and the Israeli government. “We’re super excited about this.”
Accelerating innovation
Another company that is scouring Cedar Park for office space is Plug and Play Tech Center. The company runs a corporate innovation platform that big companies can use to tap into new ideas, while also connecting, mentoring and investing in startups.
Plug and Play employs around 700 people total, has more than 50 locations around the globe and has deployed at least $110 million into 1,000-plus startups since its founding in 2008, according to its website and city documents. Past clients include Walmart Inc. (Nasdaq: WMT), The Procter and Gamble Co. (Nasdaq: PG), Microsoft Corp. (Nasdaq: MSFT) and PepsiCo Inc. (Nasdaq: PEP)
Plug and Play Ventures partner Kevin Parakkattu, who is based in Austin, is overseeing the push into the suburb. He previously told the ABJ the company is still looking for office space in the Williamson County suburb but that Plug and Play leaders are interested in the region because of a “strong cohort” of corporations.
He noted during the meeting that, while they have never had a Texas office space, they have had 94 companies from the Lone Star State go through their program and are investors in 24 of them. That includes Austin-based startup Jasper AI Inc., which reached unicorn status after raising $125 million in series A funding at a $1.5 billion valuation last year.
The incentives agreement — codenamed “Project Accelerate” — is a bit different. The Cedar Park Economic Development Corp. would invest an initial $1 million into Plug and Play, and in return the EDC would serve on its advisory board and help select startups for an advanced manufacturing accelerator program that the firm would create as part of the agreement. The program would include mentorship, workshops, connections to corporate partners and access to funding. The deal is for three years with an option to renew for two more.
The company is required to occupy a facility in Cedar Park during the term of the agreement and employ at least four people full-time. Plug and Play would also host mentorship events, work with the school district and other kinds of programming, which could result in additional investments or credits returned back to the EDC. It also disallows them from opening another location within 60 miles and requires that each group of startups have a minimum of 10% from companies based in Cedar Park, 15% from Williamson County and 25% from the Austin MSA.
The quest to bring the company to Cedar Park started after officials met them at an event in Washington D.C. Cedar Park officials then visited and toured their facility in Calgary in Canada and one of their expo events in Silicon Valley.
“It’s really proof that our high quality of life and our opening and welcoming culture here in Cedar Park is bringing the smartest people from all around the world, not just to live but to build their businesses and innovate tomorrow’s solutions for today’s problems,” Cedar Park Mayor Jim Penniman-Morin said during the meeting. “We all should be very proud of this big step.”
Homegrown expansion
Lastly, PD Labs was approved for $105,000 to help construct a $4.3 million office and headquarters at 1513 W. New Hope Drive. The company is a nationally licensed, research-based specialty pharmacy as well as a compounding pharmacy, meaning it prepares customized drugs that can be used to treat ailments such as Lyme disease, autism and pain. It currently operates at 101 Commercial Parkway, about 3 miles away from the new facility.
Scott Smith, Cedar Park’s assistant director of economic development, said during the Aug. 22 meeting that the need for expansion arose as part of the city’s business retention program, where they met with Cedar Park companies to address their needs. The company said it needed to grow to support research and development needs.
“We’re happy to be able to support a local growing business that’s doing really well at this point,” Smith said.
Company President Ray Solano previously told the ABJ they needed more space with its national reach and desire to add a lifestyle medicine clinic and host seminars and other programming. The new HQ will be about 7,500 square feet, versus the roughly 2,000 square feet it has currently.
The performance-based economic development agreement stipulates that, to receive $50,000, PD Labs would need to retain its 26 current employees and construct an office headquarters with a capital investment of at least $4.3 million by Jan. 1, according to Council documents. It’s eligible for an additional $50,000 if it adds 16 employees and has a total payroll of no less than $2.3 million by Jan. 1, 2030. The city will also provide a $5,000 membership to the Cedar Park Chamber of Commerce.
City officials estimated that the rate of return on the public dollars being invested in the project would be nearly 27%, according to the documents, and that the EDC would recoup the value of the investment in roughly three years via taxes and other sources of revenue.
“We took this opportunity to move to a world-class facility,” Solano said. “Needless to say, we are bulging at the seams.”
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