Stop taxing growth, start selling it: La Grange, Texas
A small river city between Austin and Houston uses sales tax and utility transfers to fund services, recruit business, and keep costs low.
“Sell certainty, not sizzle. Predictable taxes, published code, and city-run utilities turn a small town into an operator’s first choice.”
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Last week’s EDO clips…
Vistra plans new gas units in the Permian (Sept 29, 2025)
Big power boost coming: Vistra’s adding ~860 MW of dispatchable gas to keep up with West Texas load. If you’re pitching energy-hungry projects, this helps your “reliable power” slide.
Lefko USA picks New Braunfels for its U.S. HQ & plant (Oct 1, 2025)
Advanced plastics manufacturer coming in with ~150 jobs and room to scale past 70,000 sq ft, nice win for the I-35 corridor. Think supplier outreach to medical/transport components off the back of this.
Entergy Texas’ SETEX transmission line gets the green light (Oct 2, 2025) Regulators okayed the Lake Livingston route; more backbone power for fast-growing Southeast Texas. Line timing now matters for your industrial timelines.
San Antonio gears up PFZ funding for convention center + Spurs arena (Oct 2–3, 2025)
City is leaning on the state Project Financing Zone to capture hotel-tax growth for the district, no new local tax needed. Clock’s ticking: construction needs to start within five years.
Port of Houston upgrades could lift ag exports (Oct 3, 2025)
Soybean folks are eyeing capacity gains and easier Gulf access, useful talking point for any ag or bulk exporter you’re courting.
Urban Alchemy lays off ~109 Austin shelter workers (Oct 3, 2025)
Contract change triggers layoffs downtown; good moment to loop workforce partners on rapid-response and re-placement.
Appeals court rebukes Port Freeport eminent-domain takings (Oct 5, 2025)
Ruling says the port needed more than assurances of public use worth a read if your projects involve site assembly near ports.
Barron’s tours the Abilene “Stargate” data center (Oct 5, 2025)
One building live, seven more planned; thousands of construction jobs and big permanent headcount coming as sites scale. Texas also lands more Stargate complexes; queue the housing, power, and training convo.
Stop taxing growth, start selling it.
Issue 12
B.L.U.F. La Grange is a county-seat city on the Colorado River with a lean tax structure and a preserved historic core that attracts small business investment. The city collects a standard 8.25% sales tax and levies a modest city property tax rate while running city utilities that support local service delivery.
Its location puts it about 60 miles from Austin and 100 miles from Houston, giving operators access to two large markets without big-city costs. Population sits around 4,400, and the county’s employed base grew 1.77% year over year, led by manufacturing, retail, and health care.
City Financial Profile
La Grange operates the most business-friendly municipal finance structure in Texas, with complete reliance on consumption-based revenue rather than property taxation.
FY2024 revenue base: $37.5M projected; represents 5.1% growth over previous year, driven primarily by sales tax collections that jumped 7.7% year-over-year
Revenue model: 46.8% from LOST/SPLOST sales taxes, 43.4% from utility transfers, 9.8% other fees; property owners pay no municipal ad valorem taxes levied by the city.
Tax structure: City sales tax totals 1.5% inside the 8.25% combined rate. The adopted city property tax rate was $0.18022 per $100 valuation in 2024 and a proposed $0.18194 in 2025.
Debt management: Minimal municipal debt service at 2.6% of total expenditures, allowing operational flexibility while neighboring jurisdictions carry substantial bond obligations
Capital allocation: 56.7% of budget directed to public safety, 15.8% general government, 14.4% public works; reflects priority on core services over speculative projects
Utility enterprise: City-owned electric, gas, water, sanitation systems generate significant transfers to general fund while maintaining competitive rates for businesses and residents
Fiscal sustainability: Working capital sits at approximately 41% of operating expenses, providing 5-month operational cushion that exceeds industry benchmarks
Takeaway: The city’s business climate benefits from a predictable 8.25% sales tax and a comparatively low city property tax rate, with utility operations helping sustain services.
Economic Drivers
La Grange’s economy reflects strategic diversification between traditional sectors and emerging opportunities, with government, tourism, and retail forming the foundation for private sector growth.
Sector mix, countywide: Manufacturing is the largest employer (≈1,724 jobs), then retail trade (≈1,552) and health care and social assistance (≈1,004). County employment grew 1.77% year over year.
Population anchor: The city’s 2020 headcount is 4,391, with ACS 2023 showing ~4,448. As county seat, La Grange concentrates public-sector functions that stabilize local demand.
Location value: Approximate driving distances are ~101 miles to Houston, ~111 miles to San Antonio, and about an hour to Austin metro edges via SH-71 and US-77.
Heritage-driven visitor draw: The Fayette County Courthouse Square Historic District is listed on the National Register, and La Grange is an active Texas Main Street community with façade, sign, and paint grants that have leveraged private reinvestment downtown.
Takeaway: Sector diversity and a protected, program-supported downtown give La Grange a foundation for small-to-midsize firms serving the Texas Triangle. Keep the narrative on verified sector counts and certified historic assets
Business Climate and Growth Indicators
La Grange presents a streamlined regulatory environment with clear development processes, though infrastructure constraints require strategic navigation for larger-scale projects.
Permitting and fees: The city’s eCode lays out building permit fees, including a $25 base for some accessory work and per-square-foot fees commonly in the $0.30–$0.40 range depending on project type.
Zoning and districts: The courthouse square is both a local and National Register historic district, enabling use of state and federal historic tax credits for eligible rehab projects.
Downtown tools: Main Street La Grange operates façade, sign, and paint grants to support private rehabilitation, with documented private investment tied to the program.
EDC programs: The community is listed in the Texas Downtown database with references to property tax abatements and a revolving loan program; confirm the current program guidelines and administrator before quoting details.
Takeaway: The city publishes core rules, and the historic toolkit lowers after-tax costs for rehab. For larger industrial users, verify current utility capacities and any planned upgrades before positioning scale projects.
Opportunity Gaps
Three practical moves that fit La Grange’s data and place.
Boutique Lodging and Small Events
Market opportunity: Historic district status and Main Street grants, plus weekend travel along SH-71, create demand for walkable lodging near the square.
Need/gap: A limited inventory of downtown-adjacent rooms pushes visitors to out-of-town stays, reducing downtown capture. Use historic tax credits and local façade programs to underwrite rehab math.
Small-Format Distribution, Service Depots
Market opportunity: ~100 miles to Houston and ~110 to San Antonio make La Grange attractive for small warehouse, fleet, or field-service nodes that need quick highway access without metro friction.
Need/gap: Identify light-industrial parcels with existing utility capacity and clarify any system expansions up front in RFIs.
Specialty Food and Light Manufacturing
Market opportunity: Manufacturing is already the county’s largest employer.
Need/gap: Downtown code clarity and utility specs help artisan and small-batch operators scale inside city limits while leveraging the town’s heritage brand.
Takeaway: Projects that are small to midsize, capital efficient, and downtown-compatible are the quickest wins. Tie each to existing tools and verified distances, then sequence infrastructure asks.
Closing Insight
La Grange’s edge is practical: a protected, marketable downtown, clean rules in code, and access to two major markets on day one. Keep the pitch precise, not grand. Lead with parcels, utilities, and incentives that already exist, then build momentum with visible rehabs and steady small-format wins
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Next Town: Bowie, Texas
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