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."
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Nicklaus Pereksta says he loves photographing enthusiastic people, and it’s why his latest gig offering pictures to people out on Lady Bird Lake’s hike and bike trail is going smoothly. He sets up his gear on the Pfluger pedestrian bridge and puts out a sign: Photos, $10.
“Overwhelmingly, this has been a really positive experience,” Pereksta said. “I get excited when I wake up in the morning and I can't wait to go to work.”
Bikers and joggers are excited about it too. On the pedestrian bridge leading to downtown Thursday morning, a man on an e-bike rode up and posed, wanting more photos.
“I posted the last pictures on Instagram and people loved it. They asked, ‘where is this guy?’” the biker told Pereksta. Bashfully, Pereksta, who also photographs landscapes and at weddings and other events, said he was happy to hear that.
Pereksta started these photos about a month ago, after the strenuous runs required in his valet job started causing pain in his legs. And though he has a passion for photography, he wasn’t so sure when he started working independently if it would work out.
He felt uncertain about the demand for it and was also worried about having lots of expensive equipment out in the open.
“Then like the first day was nothing but high praise and people are like, this is so awesome. This is great. I've never seen anything like this before. I was like, Wow, this was really good, like positive turnout. So I got encouraged.”
Now, he wants to expand and is thinking of contacting the Mueller Farmers Market about how to become a vendor. Still, he'll carry a connection to photographing on the bridge since the word bridge is related to his last name.
“It's a name my great, great, great grandfather came up with when he was marrying somebody. It's actually quite a romantic name. It means a joining of two bridges," Pereksta said. "So, I thought it was ironic that I'm set up on a bridge. I'm kind of representing my last name right now.”
Austonia talked to Pereksta about life in Austin, where he’s lived for eight years after living in Boston doing band photography.
What was your first experience with Austin?
I came here to visit some friends and they took me to Barbarella. So we went to Barbarella and I was like, ‘wow, this place is great.’ And then the restaurants and the food and going to Barton Springs. I was like, ‘this is amazing.’ Because there's nothing like that in Boston. If you want to go to a natural spring, you got to go to New Hampshire. There's no pools in the city at all. So there's lots of swimming out here.
What do you like best about Austin?
You go to any little quiet bar and there's a band playing that should be like onstage for a sold out show. Yeah, they're playing to 10 people, right? Like, one of the best bands ever and they're playing for 10 people, right? And just little magic moments like that are pretty fun. You just run into little random weird things.
What do you think makes Austin different from other places?
There’s no fall.
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