Skip to main content

Tesla wants a $68M property tax break to locate its Cybertruck gigafactory near Austin

Tesla is seeking up to $68 million in property tax abatement from a Texas school district to build a factory that will be used to produce Model Y crossovers for the East Coast market as well as its upcoming Cybertruck pickup.

The application to the Del Valle School District located in Travis County southeast of Austin was made public by the Texas comptroller’s office Thursday and first reported by the Austin Statesman. The property tax abatement proposal, which the school district has agreed to consider, is one of several potential incentives deals aimed at attracting the automaker to the state. Travis County commissioners are also weighing a possible incentives package, which has yet to be made public. And if the process to approve Tesla’s factories in Nevada and New York are any guide, state incentives are also likely. There are other beneficial rewards Texas could offer Tesla such as allowing the automaker to sell directly to consumers, a method that is prohibited in the state. 

For now, the Chapter 313 application is the only public document that provides some details about Tesla’s plans. (Under the Texas Tax Code, Chapter 313 permits a school district to give property tax breaks for economic development projects.)

Here are the important nuggets of the Chapter 313 application that the school district has agreed to consider. 

  • The application is filed by Colorado River Project LLC, a new subsidiary of Tesla that was likely created to help keep its activity under wraps.
  • Tesla would receive up to $68 million property tax abatement over a 10-year period
  • In return, Tesla would agree to building a 4 to 5 million-square-foot factory that would employ more than 5,000 workers
  • About 25 of those workers are categorized as “qualifying” jobs and would be paid a minimum of $74,050, while the remaining would below that figure
  • The location southeast of Austin off of Texas 130 is a collection of parcels that equals 2,100 acres in the Austin Green development.

Tesla does not yet own the land, according to the application. The company does have an option to buy the land, CEO Elon Musk wrote Thursday in a tweet correcting a report that the company had already acquired the property.

The purchase of the land is very much dependent on those incentives, according to language in the application. Here’s a key nugget.

“For a project to succeed, it must also have an acceptable rate of return to secure the necessary capital and compete in the automobile industry against some very capable competitors that have been longstanding industry players. Therefore, local and state tax incentives serve a critical role in getting the project approved and operating successfully. This is especially critical in Texas due to the high level of real and personal property taxes relative to other states. Since school taxes are the largest component of property taxes, the Section 313 tax limitation is especially critical to create a level playing field between Texas and other states vying for this project. Therefore, obtaining the 313 limitation is a determining factor in the decision whether to locate the project in Texas.”

The timing of the application, which comes just a few months since Musk tweeted that Tesla was scouting locations for a so-called “Cybertruck Gigafactory,” illustrates the pressure the company is exerting and the speed at which the deal is coming together. If approved, Tesla said it will begin construction in the third quarter of 2020.

It also suggests that all gigafactory roads are pointing to Austin. However, the local business community steered clear of celebrating.

“While we have engaged in multiple discussions with Tesla, the company has not made a final decision regarding its next Gigafactory,” Charisse Bodisch, senior vice president, of economic development at the Austin Chamber of Commerce. “The potential location being explored is an underutilized site that is in clear need of revitalization, and it would be a perfect fit for an environmentally focused organization like Tesla. We are home to a talented and diverse workforce, and we are grateful that Austin is being considered. We will continue to make the case for why this would be a win for Tesla and for our community when it comes to job creation, economic impact and workforce development.”

. Tesla was eyeing Nashville and had been in talks with officials there. Tesla informed Nashville officials in May that the city is out of the running for its gigafactory location.

That leaves Tulsa, Oklahoma as the remaining dark horse in the race to lock in a factory that could employ thousands of workers. And while many believe that Texas is the sure winner, Oklahoma is still pushing forward.

“Tulsa is in the final running to attract Tesla’s giga-factory. We’ve pulled together a compelling, well-balanced and, more importantly, a responsible performance-based incentives package to attract Tesla to Oklahoma,” Sean Kouplen, Oklahoma’s Secretary of Commerce and Workforce Development said in an emailed statement. “Our offer not only includes the standard incentives package presented to companies interested in locating to Oklahoma, but also  financial commitments to improve local infrastructure and invest in our workforce, expanding educational programs within our academic institutions to ensure Tesla has a pipeline of qualified workers to recruit.”

Kouplen argued in his statement that Oklahoma’s central location, pro-business stance and Automotive Engineer Workforce Tax Credit would make the state the right choice for Tesla. 

“We know we can attract engineers to Tulsa. In fact we’ve already shared with Tesla thousands of resumes from qualified candidates who’d move to Oklahoma for a Tesla job,” Kouplen said. “The State, Tulsa and our community partners have rallied to demonstrate that Tesla would be a most welcome addition to our state. Tulsa Mayor GT Bynum expressed it best when he said, “Tulsa is a city that doesn’t stifle entrepreneurs – we revere them!”



Source: https://ift.tt/3hHnpmT

Popular posts from this blog

The hidden cost of food delivery

Noah Lichtenstein Contributor Share on Twitter Noah Lichtenstein is the founder and managing partner of Crossover , a diversified private technology fund backed by institutional investors, technology execs and professional athletes and entertainers. More posts by this contributor What Studying Students Teaches Us About Great Apps I’ll admit it: When it comes to food, I’m lazy. There are dozens of great dining options within a few blocks of my home, yet I still end up ordering food through delivery apps four or five times per week. With the growing coronavirus pandemic closing restaurants and consumers self-isolating, it is likely we will see a spike in food delivery much like the 20% jump China reported during the peak of its crisis. With the food delivery sector rocketing toward a projected $365 billion by the end of the decade, I’m clearly not the only one turning to delivery apps even before the pandemic hit. Thanks to technology (and VC funding) we can get a ri

Cyber Monday Canada: Last-minute deals for everyone on your list

Best Cyber Monday Canada deals: Smart Home Audio Phones, Tablets & Accessories Wearables Laptops & PC Components Amazon products Gaming Televisions Cameras Lifestyle & Kitchen Toys & Kids Cyber Monday Canada is here, and retailers are rolling out the red carpet for customers who want to shop for everything from tech to kitchenware to games and everything in between. Unlike years past, Cyber Monday Canada deals look a bit different than normal. Instead of retailers trying to pack their stores with as many shoppers as possible, we're seeing tons of online deals that you can take advantage of from the comfort of your home. We've rounded up our favorites below, so feel free to browse through the best of what Canada Cyber Monday has to offer! This list is being updated with new Cyber Monday deals all the time, so check back often. Spotlight deals It's a Switch Nintendo Switch Fortnite Edition bundle $399.95 at Amazon It's a Switch.

Slack’s new integration deal with AWS could also be about tweaking Microsoft

Slack and Amazon announced a big integration late yesterday afternoon. As part of the deal, Slack will use Amazon Chime for its call feature, while reiterating its commitment to use AWS as its preferred cloud provider to run its infrastructure. At the same time, AWS has agreed to use Slack for internal communications. Make no mistake, this is a big deal as the SaaS communications tool increases its ties with AWS, but this agreement could also be about slighting Microsoft and its rival Teams product by making a deal with a cloud rival. In the past Slack CEO Stewart Butterfield has had choice words for Microsoft saying the Redmond technology giant sees his company as an “existential threat.” Whether that’s true or not — Teams is but one piece of a huge technology company — it’s impossible not to look at the deal in this context. Aligning more deeply with AWS sends a message to Microsoft, whose Azure infrastructure services compete with AWS. Butterfield didn’t say that of course

iPhone 13 Pro vs. iPhone 15 Pro Buyer's Guide: 50+ Differences Compared

The iPhone 15 Pro brings over 50 new features and improvements to Apple's high-end smartphones compared to the iPhone 13 Pro, which was released two years prior. This buyer's guide breaks down every major difference you should be aware of between the two generations and helps you to decide whether it's worth upgrading. The ‌iPhone 13‌ Pro debuted in 2021, introducing a brighter display with ProMotion technology for refresh rates up to 120Hz, the A15 Bionic chip, a telephoto camera with 3x optical zoom, Macro photography and photographic styles, Cinematic mode for recording videos with shallow depth of field, ProRes video recording, a 1TB storage option, and five hours of additional battery life. The ‌iPhone 13‌ Pro was discontinued upon the announcement of the iPhone 14 Pro in 2022, but it is still possible to get hold of it second-hand. Our guide helps to answer the question of how to decide which of these two iPhone models is best for you and serves as a way to c