Northwest Arkansas Democrat-Gazette
Texas county pursues Tesla plant
Tax incentives approved in bid to attract electric-truck site
Texas is moving forward with efforts to woo Tesla Inc. and lure its next electric-vehicle factory after commissioners in Travis County voted Tuesday to approve a 70% property-tax rebate on the first $1.1 billion the company invests in a site near Austin. The abatement is worth at least $13.9 million.
The areas of Austin and Tulsa are the finalists for landing the facility where Tesla plans to build the Cybertruck pickup that Chief Executive Officer Elon Musk first unveiled late last year. He has said on Twitter that the site also will supplement production of Model Y crossovers already being made at the company’s lone U.S. carassembly plant in Fremont, Calif.
Tesla has told Travis County that its planned factory will eventually employ 5,000 full-time workers with an average salary of roughly $47,000 a year. At least half of those will be county residents.
The weekslong effort to secure the abatement from the Austin area has played out as Musk, 49, has openly tweeted about the level of support that Tulsa and Oklahoma have offered. He visited the area on July 3, and Gov. Kevin Stitt posted photos the next day of the small contingent who welcomed the billionaire to town.
Nate Jensen, a government professor at the University of Texas-Austin, said securing county-level abatements could be a step toward Tesla eventually accessing bigger forms of support from the state, including from Texas Enterprise Fund, one of the largest payers of economicdevelopment incentives in
the nation.
“They’ll promise the world to the county — high environmental and wage standards, yearly audits — and then as soon as they get other, larger incentives, they’ll back out of city incentives,” Jensen said.
Tesla hasn’t said when it plans to make a decision on where to build the plant.
The other incentives the county is offering Tesla include a $46.4 million property-tax break from the local school district over ten years and an $80 million cap on the taxable value of the plant. If Tesla follows through with the project, it will be one of the largest economic-development agreements in Austin’s history.
Just before the vote, Commissioner Margaret Gomez pushed for a week’s delay to allow for more time to review the agreement, but other commissioners voiced concern that doing so might prompt Tesla to instead build the factory elsewhere.
Rohan Patel, a Tesla executive who participated in the commission’s virtual meeting, was noncommittal on that question when commissioners asked him about it. However, he told them that the company had just had a call “with a governor of another state and mayor of another town to go through a whole bunch of things similar to what we have gone through now.”
That prompted Commissioner Jeff Travillion, whose district includes the potential site for the factory, to say the risk of losing the project was too great.
Landing the factory would be a major boost to an area that saw its unemployment rate surge to 11.6% in May from 2.6% in February, with more than 81,000 losing their jobs in the midst of coronavirus-related shutdowns across the country. Half of those were earning less than $30,000 a year before being laid off from leisure and hospitality jobs, according to the Texas Workforce Commission.
Thousands of jobs would quickly open up for the start of construction, which Tesla wants to initiate this quarter.
Local proponents of the Tesla project who spoke at Tuesday’s meeting before the vote called it a potential boon for the economy and fountain of new jobs well worth the price of taxpayer subsidies.
But others criticized Tesla’s corporate record on workplace safety and labor relations and pushed for more to be done to ensure employees of the factory are treated and paid well.
Labor leaders and progressive groups had urged the fivemember board of commissioners to take their time and negotiate the best deal possible, calling for elected officials to ask for in-writing worker protections and a guarantee of a $15-an-hour wage for all employees. Information for this article was contributed by Sophia Cai and Paul Stinson of Bloomberg News and by Bob Sechler of the Austin American-Statesman.