Tesla to Travis County: Austin is at the top of our list, but we need a 20-year tax rebate deal

Travis County is at the top of Tesla's list of possible locations for a new "Gigafactory," a representative for the electric carmaker told Travis County commissioners yesterday—it also wants a 20-year break on property taxes.

The meeting marked the first time a proposed $14 million economic incentives deal—which would see Tesla build a $1.1 billion factory in Southeast Travis County, hire 5,000 workers and receive a significant county property tax rebate for 20 years—was discussed publicly.

Rohan Patel, Tesla's senior global director for public policy and business development, told commissioners that Travis County stands out among other contenders, such as Tulsa, despite Texas' burdensome property taxes.

This is a particular concern for Tesla, Patel explained, because the company relies on "some of the most expensive equipment on the planet," which contributes to its state property tax bill.

"The incentives here in Texas and Travis County would not be a reason for us to choose this location … but they are a prerequisite to make the economics of a factory work," he said.

Tesla looks to fast-track approval of an Austin 'Gigafactory' (Video by Ethan Hunt) www.youtube.com

A long-term deal

Documents published in advance of the meeting provided tax estimates for only 10 years, but at the meeting Diana Ramirez, director of economic development and strategic investments for the county, and Patel confirmed that the company has requested a 20-year rebate term, the same as an earlier agreement between the county and Samsung.

Competitors have offered Tesla better terms, Patel said, but Travis County stands apart because of its diverse workforce, a potential partnership with Del Valle ISD and the opportunity to transform a mining site into a sustainable factory.

Travis County staff have negotiated a proposed deal that would see Tesla pay its full property tax bill to the county each year and, if it complies with the agreed-upon terms, received an 80% rebate for 10 years and then a 60% rebate for another 10 years following.

Tesla is also negotiating a separate $68 million economic incentive agreement with DVISD.

For and against

More than 40 people signed up to speak on the proposal during the public comment portion of the meeting.

Ed Latson, executive director of the Austin Regional Manufacturers Association, said large manufacturers such as Tesla are most able to move the needle on job creation. "I think what's before us and what's before you, is an opportunity to change generations," he told commissioners.

But many also spoke in opposition to the proposal, raising concerns about Tesla's troubled history with public subsidies, barring entry of state safety inspectors into its factories and flouting of shelter-in-place rules.

Jordan McCray, a resident, asked, "How can we provide public subsidies to a company that has demonstrated such disregard for the rule of law and the safety of its workers?"

The Commissioners Court will take up the deal again next week and may vote on it, County Judge Sam Biscoe said.