A FORMULA OF ATTRACTION
Samsung’s proposal exponentially exceeds any others that have approached Austin in the past. The following table is organized by the total investment for each project.
Samsung (2006-26)
Apple † (2012-22)
Samsung 2021*
The Domain Development (2003-23) $ 130M 1,100 25% property tax 80% sales tax years 1-5 over
HID Global (2012-22)
Visa (2012-22)
*PROPOSED
$ 17B
$ 4B
$ 282M
$ 36M
$ 27.3M
Investment
1,993
700
3,635
276
794
Jobs
100%
100% years 1-6 over
over
years 1-10
60% 10 years over
60% 10 years over
100% 25 years over
Tax rebate agreement
75%
80%
50% property tax years 6-20 over
over
over
years 11-20
years 7-10
$ 650M 10 years** over
Total estimated city incentive package offered
$ 62.9M
$ 8.6M
$ 37.5M
$ 921K
$ 1.6M
$ 92.4M
$ 7.2M
$ 16.7M
$ 454K
$ 1M
N/A
Actual total city has paid so far
**SAMSUNG TURNED DOWN THIS OFFER FROM THE CITY. † APPLE ENTERED ONE AGREEMENT WITH AUSTIN IN 2012 AND ANOTHER WITH WILLIAMSON COUNTY IN 2018 ED
SOURCE: CITY OF AUSTIN/COMMUNITY IMPACT NEWSPAPER
A Dec. 9 analysis project from Impact Data Source estimated a 20-year, 100% Travis County property tax reimbursement would be worth about $718.3 million. The analysis used the existing Travis County property tax rate of $0.374 per $100 in valuation. Austin’s current property tax is on the
economy. The project also runs counter to the city’s own commitment to focus its incentive program away on assisting small businesses. “Trying to get the big company to relocate in your community is actually kind of the opposite of what most of these programs shouldbe,” saidNathan Jensen, a government professor at the University of Texas whose research focuses on economic incentive policy. Adelicate approach Chapter 380 of the Texas Local Government Code allows communities to offer public money grants “to promote local economic development and to stimulate business and commercial activity in the municipality.” Five of Austin’s eight active Chapter 380 agreements arewith corporations, such as Samsung, Apple, Visa and the property manager of The Domain development. The investment on behalf of the five corporations totals roughly $4.5 billion. Although the region has recently attracted several major investments, from Tesla and Apple to the relocation
HISTORIC POTENTIAL Samsung’s proposal would bring an unprecedented investment to the city of Austin.
Investment
Total $ 17B
$ 11.4B
$ 5.6B
Machinery and equipment
Construction cost
Jobs
Promising at least
Targeting up to 193 additional
1,800
$ 100,000 Average salary about /year
$ 50,000 /year Average salary about
SAMSUNG BLVD.
N
Tesla’s Gigafactory in 2020 and the Apple campus, announced in 2018. A 100% property tax reimbursement over 25 years would mark the most aggressive corporate tax break inAustin history. What it equals in actual dollars is unclear. According to the documents, Samsung already rejected a 10-year agreement offered by the city that includednearly$650millioninproperty tax and other incentives. The offer by the city is nearly six times greater than all five of its active economic incentive packages combined.
$0.535 per $100 in valuation. Spokespeople from the city and Samsung have declined to confirm any information regarding the deal as of press time. Incentive deals such as this are often negotiated in secret to protect the sides’ negotiating positions. The public is only brought in after an agreement is reached and brought to City Council for approval. Some experts andmembers of the public havequestionedofferinga large taxbreak to a corporation bringing only 1,800 high-skilled jobs to an already humming
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reviewed by Community Impact Newspaper . According to the documents, the plant’s construction would cost $5.6 billion and would house $11.4 billion worth of machinery and equipment. Samsung promises to create up to 1,993 jobs, of which 1,800 carry an average salary of about $100,000. The plant would be the largest single investment in the Austin region and easily surpass recent billion-dollar projects such as
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COMMUNITY IMPACT NEWSPAPER • COMMUNITYIMPACT.COM
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