Southwest Austin - Dripping Springs Edition | July 2020

identied as a competing nalist. With gigafactories past—such as those now located near Reno, Nevada and Bualo, New York— local entities oered hefty economic incentives to woo Tesla. Travis County did the

its end of the bargain, according to the agreement. The company also would be required to hire county residents for at least 50%of its workforce andwould have to pay all employees a minimum wage of at least $15 per hour. However, a coalition of labor and environmental groups have criticized Travis County’s lack of contingen- cies to hold Tesla accountable. They took particular issue with the lack of a requirement for Tesla to follow Tra- vis County’s Better Builder Standards, which oblige development projects to accept independent oversight for con- struction and contract work. “Unfortunately, it appears that the judge and county commissioners are allowing Tesla to write its own ticket and exempt itself from county policy applicable to everyone else,” Jeremy Hendricks, a regional director for the Laborers’ International Union of North America, wrote to the county. Many residents of Del Valle, where the factory will make its home, were happy to allow special circumstances for a company with the potential to revitalize a low-income area, as was Commissioner Je Travillion, who represents the area. “We are talking about a transforma- tional process that will address pov- erty and opportunity in that area for generations,” Travillion said. A vehicle for education Del Valle ISD, the school district that will receive tax revenue from the giga- factory, also approved an agreement that gives Tesla an estimated $46.4 million tax break over 10 years. According to state regulations, DVISD’s deal with Tesla allows the district to cap the taxable value of the project as long as it preserves a net nancial gain for the district. While Tesla is estimated to bring at least $773.4 million in additional tax- able value to the property with the



WHY TEXAS? • Tesla representatives say a site in the central United States will oer broader U.S. distribution access, including to the East Coast. • Musk has expressed desire to move operations to more “pro-business” states due to California COVID-19 restrictions, among other concerns. • Tesla is a Palo Alto, California-based electric car and clean energy company headed by CEO Elon Musk. • It is currently the world’s most valuable auto company. • The company has gigafactory manufacturing plants in Nevada, New York and abroad. A potential gigafactory in Travis County would manufacture the Tesla Cybertruck.

same, oering the carmaker at least $13.9 million in tax breaks to attract Tesla’s jobs and tax revenue.

Travis County revs up for Tesla The county’s dealings with Tesla began in May, when it lifted a morato- rium on development incentives. The goal of an incentive agreement is to promote business and commer- cial activity. In Tesla’s case, the county itself is projected to bring inmillions of dollars in new tax revenue, thousands of jobs directly from Tesla and pos- sibly many more through the ripple eects of other companies following to be near the gigafactory. Due in part to Texas's high prop- erty taxes, Rohan Patel, Tesla senior global director of public policy and business development, said eco- nomic incentives were a necessity for Tesla to build in the state. County incentives involve incre- mental rebates on the Tesla’s property taxes paid to the county, with a 70% rebate for maintenance and operations property taxes once the company invests its rst $1.1 billion in the area, with increased incentives for subse- quent billions invested. Travis County will still see an inux of tax revenue, around $8.8 million over its rst 10 years of partnership with Tesla, according to county docu- ments. Additionally, Tesla pledges to donate 10% of its preincentive tax lia- bility to local nonprot, education and transportation causes. Because the county’s deal withTesla is performance-based, Tesla could lose out on tax breaks if it fails to hold up




begin in the third quarter of 2020, with initial operations at the “gigafac- tory” beginning as soon as the fourth quarter of 2021. Already, Tesla has taken steps to charge forward with the site, seeking its rst development variances in July for the property along SH 130 just north of W. Hwy. 71. “We’re going to make it a factory that is going to be stunning," Musk said. "It's right on the Colorado River, so we're actually going to have a boardwalk where there will be a hik- ing/biking trail. It's going to basically be an ecological paradise. (...) It will be open to the public as well." Texas Gov. Greg Abbott—who tweeted May 13 Texas was a “per- fect t” for Tesla—welcomed Musk's announcement two months later." "Tesla's Gigafactory Texaswill keep the Texas economy the strongest in

the nation and will create thousands of jobs for hard working Texans," Abbott said. Tesla's venture into the Austin area began earlier this year, when Musk indicated that it was seeking a site located centrally in the United States for its next gigafactory, one of the com- pany’s massive manufacturing plants, as it prepared for production of the new Cybertruck. In June, news broke that Tesla was considering a 2,100-acre site in South- eastern Travis County northeast of Austin-Bergstrom International Air- port. A site near Tulsa, Oklahoma was


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