Visa OK with more pay for builders
Travis County commissioners last week approved new rules for incentive deals that require any company looking to move to the county and asking for a tax break to pay all employees at least $11 an hour, including construction workers. Also last week, a City Council committee recommended making $11 an hour Austin’s standard for incentive packages in all but exceptional circumstances. The council hasn’t taken action yet on that proposal.
Brad Byers, head of Visa’s real estate facilities for the Americas region, told the council that the company had determined that the relatively limited construction involved at the proposed Austin site — Visa would invest at least $27.4 million to retrofit and equip an office building at 12301 Research Blvd. — meant that agreeing to a minimum construction worker wage wouldn’t affect the project.
If the project were being built from the ground up, Byers said, “It would be very impactful on the project in terms of the budget.” In that case, Byers said, Visa wouldn’t agree to a minimum construction wage.
City officials say their fiscal impact model indicates the Visa project would create a total revenue benefit for the city of $6.8 million over 10 years. Their model estimates that Visa and its employees would generate $21.8 million in taxes, fees and utility payments over 10 years, while requiring $15 million in costs, which includes the proposed local incentives.
Gov. Rick Perry already has offered $7.9 million in incentives to Visa from the Texas Enterprise Fund. The state incentives offer depends on the approval of city incentives for the project.
At least 70 percent of the 794 new jobs would be filled with local hires, according to the company’s contract with the city.
The global IT center is expected to be primarily a software development center to help the payments giant expand and strengthen its already extensive array of financial products and services.
Visa, which has about 8,500 workers worldwide, saw its global network process more than 77 billion transactions last year worth nearly $3.8 trillion.
Visa hasn’t spelled out just what role the new IT center would play, but an industry official said that companies must continually develop software to handle new services and payment methods, such as payments made with mobile devices. The IT project appears to be similar to a 500-person IT center announced for Austin by General Motors Corp. in September. GM officials said at that time that they considered advanced software development to be a critical asset for their company.
The automaker considered seeking state and local incentives for its project but decided to forgo the process in order to get started sooner.
Austin Chamber of Commerce officials said the Visa deal fits with Austin’s recent pattern of limiting incentives deals to those involving companies proposing a significant number of jobs and considering other sites.
“We have had 28 companies move here this year, and only three have required local and state incentives,” said Dave Porter, senior vice president for economic development at the chamber. “The bigger deals are requiring incentives because they can. Other cities are offering them.”