Apple’s giant Austin expansion doesn’t top Texas’ biggest incentive deals of 2018
Apple’s big expansion in Austin might have generated the most buzz in 2018, but it doesn’t win the contest for being the state’s largest incentives deal of the year.
Two other projects ranked ahead of state and local inducements offered to Apple, according to Incentives Monitor, a service of London-based research firm Wavteq. The company tracks tax incentives awarded across the globe.
Texas Instruments is expected to decide this year on whether it will proceed with a $3.2 billion investment in a new chip plant in Richardson. The Dallas-based company earlier said it was considering Richardson and several other locations.
TI applied for property tax credits from Plano ISD, the school district where the plant would be located, that total $100 million over 10 years, according to Incentives Monitor. Plano ISD’s board hasn’t acted yet on the application. The company also plans to ask for $8.9 million in property tax breaks from Richardson and Collin County.
Last year’s second-largest incentives package — $59 million — went to German chemical manufacturer Covestro. It plans to invest $1.72 billion in its Baytown plant to boost production of a chemical for polyurethane foams that increase energy efficiency in appliances, buildings and vehicles, the Houston Chronicle reported in October.
The plant employs about 1,000 people now and expects to add another 25 to support the expansion, which is expected to be completed in 2024.
The firm’s list doesn’t include the $160 million incentives package put together by Frisco and state officials to lure the PGA of America’s headquarters to a 600-acre development that will feature championship golf courses, a resort hotel, conference center space and the association’s headquarters. A significant portion of that package is in the form of long-term performance payments and hotel and sales tax rebates.
Incentives Monitor tracks subsidies awarded by states from business attraction tools such as Texas’ deal-closing Enterprise Fund, as well as tax credits and abatements granted by local governments. For example, Apple’s highly publicized expansion will be aided by $25 million from the state and $16 million in property tax rebates from Williamson County over 15 years.
2018 went down as the fourthhighest year for incentives since 2010, according to Incentives Monitor. State and local governments do led out $1.377 billion in incentives in 2017, tops for this decade.
New research by the Federal Reserve Bank of Dallas documents that Texas is the top destination for businesses looking to relocate from other states. Senior economist Anil Kumar and economic programmer Alexander Abraham tracked company moves from 2000 to 2013.
Texas netted roughly 7,000 firms and 100,000 jobs, according to their analysis. California accounted for about 1 in 3 jobs relocating to the Lone Star State.
“A variety of factors makes Texas a favored destination for businesses looking to relocate. Some relate simply to the state’s traditional advantages — favorable business climate, central location, large size, accessibility to ports, diverse industrial structure and abundant energy resources,” Kumar and Abraham wrote in their report. “Other characteristics also work to Texas’ advantage: an ample supply of educated workers relative to many other states, a lower cost of living, less union activity and adherence to the federal minimum wage of $7.25 an hour.”
While big corporate headquarters moves attract more attention, 90 percent of businesses moving into or out of Texas were stand-alone, single establishment firms.
“Not surprisingly, small businesses tend to be more mobile,” their report said. “Establishments with fewer than five workers constitute about 80 percent of all businesses moving to Texas but account for less than 12 percent of all jobs.”