Travis County commissioners to consider $14.7 million economic incentives deal for $1 billion Tesla factory
Travis County commissioners will hear from county staff, Tesla representatives and residents on Tuesday about whether they should approve an economic incentive deal that would save the electric carmaker $14.7 million in property taxes over 10 years and generate 5,000 jobs.
Tesla has proposed a $1 billion "Gigafactory" to be built on a 2,100-acre site in Southeast Travis County. Founder Elon Musk tweeted Thursday that the company has an option to purchase the site from its current owner, construction supplier Martin Marietta, but has not yet done so.
Staff will give a presentation—which was made public earlier today—to commissioners on the proposed agreement. Tesla representatives will also present to the court.
If approved, the factory would employ 5,000 middle-skill workers with an average annual salary of $47,147 and "full benefits," including health insurance and paid parental leave, according to the staff presentation.
These middle-skill jobs are particularly needed in Travis County, where most job creation, pre-pandemic, served highly educated workers who moved to Austin from other places—and not low- and middle-skill residents looking for work.
In addition to job creation, staff estimates the new factory will generate more than $600 million in sales activity annually and spur new jobs, firms and economic activity "from the ripple effects of Tesla," per the presentation.
In exchange, commissioners would approve a deal that would see Tesla rebated 80% of its property taxes to the county for a period of 10 years.
The total property tax that Tesla would pay Travis County is estimated to be $21.7 million over 10 years, of which $14.7 million would be returned if the company passes an annual compliance review conducted by a third party.
This equation "results in a substantial benefit to the community and a net fiscal benefit to the County," staff wrote.
Travis County hired Jon Hockenyos, president of the local economic analysis firm TXP, to conduct a financial impact analysis on the proposed deal.
In his review, Hockenyos concluded: "There is a highly competitive global environment for projects of this scale and scope that typically requires incentives from state and local governments to secure relocation," he wrote.
Travis County Public Information Officer Hector Nieto said commissioners do not intend to take any action on the proposed agreement on Tuesday.
Earlier this week, union representatives called into a Commissioners Court meeting to raise concerns about Tesla's "troubled history with taxpayer subsidies."
In addition to applying for incentives through Travis County, the company is seeking nearly $70 million in subsidies from Del Valle ISD over the same 10-year period.
The proposed factory site is also within Austin's taxing jurisdiction, but the company reportedly will not be seeking economic incentives from the city.
In an email to Austonia, a spokesperson said that the city does not comment on economic development prospects.
"However, we are not surprised that an innovative technology company like Tesla is interested in opening a facility in Austin," he wrote. "Austinites win when our area features many major employers offering stable, mid-level, and strong paying jobs – as well as procurement opportunities for local businesses."
- Elon Musk threatens to move Tesla operations to Texas and Nevada ... ›
- Travis County considers bringing Tesla to Austin area - austonia ›
- Tesla may get $60 million in tax breaks to bring factory to Austin ... ›
- Tesla seeks fast-track approval of $1.1 billion plant in Austin - austonia ›
- Tesla seeks fast-track approval of $1.1 billion plant in Austin - austonia ›
- Elon Musk seeks to fast-track $1.1 billion Tesla factory in Austin - austonia ›
- Tesla asks Travis County for 20-year property tax rebate deal - austonia ›
Designs for stations along Project Connect’s Blue Line were presented this week, giving a detailed look at what part of the rail system extending from downtown to the airport could look like.
The planned stations that have gotten the latest focus include Waterfront, Travis Heights and Lakeshore stations past Lady Bird Lake.
At the Waterfront station, the preliminary design aims to prevent visual obstructions and save on costs. This is accomplished by a transit guideway that will lower from the bridge to a level station.
Heading onto East Riverside Drive, the light rail faces a curve requiring a slow down to about 10 miles per hour.
The Travis Heights station could involve relocating a pedestrian crosswalk zone at Alameda Drive to Blunn Creek. Since light rails can't effectively operate on a steep grade, this allows the transit guideway to avoid that.
From there, the rail will extend to the Norwood Park area, and though it will reach along the right-of-way zone, the park will be able to remain open.
A view of the Blue Line by Lady Bird Lake. (Project Connect)
The line involves some coordination with the Texas Department of Transportation. That's because the department is working on an intersection that will have to be built before the phasing of the section of the Blue Line involving an I-35 crossing.
When it comes to the safety of cyclists and walkers, design ideas include a pedestrian hybrid beacon by East Bouldin Creek that would provide a protected signal to cross. And for the intersection TxDOT is carrying out, Project Connect is working with them on pedestrian access across the intersection. It could involve shared use paths along the street and crossings beneath it.
This summer, the public can expect 30% of design and cost estimates to be released. Though the project was $7.1 billion when voters approved it in November 2020, the latest estimates factoring in inflation and supply chain constraints show it could ultimately be upwards of $10 billion.
- Austin faces rocky road in hiking taxes for Project Connect - austonia ›
- City launches $65M in Project Connect anti-displacement plan ... ›
- CapMetro CEO switches to role in D.C. as Project Connect moves ... ›
- Project Connect doubles cost of Orange, Blue lines - austonia ›
- With Project Connect in the works, what place do EVs serve ... ›
- 5 ways Project Connect is moving forward in Austin - austonia ›
- Federal Transit Administration awards $750K for Project Connect ... ›
- Project Connect begins scoping phase, officially hitting the road ... ›
- Austonia answers: How feasible is the $7.1B Project Connect price ... ›
- The pros and cons of Austin's $7.1B transit plan Project Connect ›
Plans for an Amazon warehouse in Round Rock—a $250 million project slated to be a large distribution center—are on hold.
This comes just after the tech giant had its worst financial quarter in seven years.
- Late last year, it announced an expansion at the Domain adding 2,000 more corporate and tech jobs.
- Amazon still owns the site in Round Rock. Plans for it are unclear.
- Early this week, the Wall Street Journal reported that Amazon is aiming to scrap warehouse space as it faces a slowdown in its e-commerce operations.
Part of that effort involves exploring the possibility of ending or renegotiating leases with outside warehouse owners. Another aspect is a plan to sublease warehouse space.
“It allows us to relieve the financial obligations associated with an existing building that no longer meets our needs,” an Amazon spokeswoman told the Wall Street Journal. “Subleasing is something many established corporations do to help manage their real estate portfolio.”
- Amazon bringing 2000 jobs to Domain as part of latest expansion ›
- Amazon plans to build distribution center in San Marcos - austonia ›
- 7 tech companies with big Austin ties make LinkedIn's 50 Top ... ›
- How 6 Austin big tech companies are returning to the office - austonia ›
- The typical compensation for a Big Tech worker in Austin - austonia ›
- 9 Prime Day deals for those living in Austin, TX - austonia ›
- Living on $15/hour in Austin: Here's how it can be done ›