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Negotiations between Travis County and Samsung appear to be on hold over a potential tax incentive deal for a $ 17 billion semiconductor fab that the Austin tech giant is considering building.
Travis County’s employees have not had any dialogue with Samsung executives for about two weeks, said district spokesman Hector Nieto. Samsung and Travis County have been negotiating a potential deal for several months.
“We have provided Samsung with everything they have requested and we are waiting to hear from them,” said Nieto on Thursday.
More:Williamson County officials swing for the fence to land the Samsung Taylor site
The latest materials made available to Samsung included the county’s parameters for a proposed deal that would be processed into a draft proposal and released if Samsung agreed to them, Nieto said.
It’s not clear what the circumstances could mean for Austin’s hopes of landing the project that is expected to be the most advanced facility yet for Samsung, one of the world’s largest manufacturers of memory chips and smartphones. Samsung’s investment in the factory is approximately $ 17 billion, according to the company, and the facility will employ about 1,800 people with an initial annual wage of about $ 66,000.
Samsung has announced plans to build the chip factory in the United States and is considering a location adjacent to its existing Austin facility, a location in Williamson County near Taylor, and locations in Arizona and New York.
Samsung spokesman Michele Glaze said that all of these websites are still under review and the company has not made a final decision.
“Samsung has not yet made a final decision on a location for a possible expansion. All parishes are still being examined. Each community is at a different stage in its due diligence process and is taking steps to put itself in the best possible opportunity, “said Glaze.
Glaze also said Samsung Austin Semiconductors “is in regular contact with business development workers as each municipality does its due diligence.”
More:Would Samsung really choose little Taylor over Austin for a new $ 17 billion factory?
Some industry experts considered the Austin site to be the front runner in landing the project, as Austin already houses Samsung’s only US factory and the company’s largest operations center outside of its South Korean headquarters. The Austin manufacturing facility employs approximately 10,000 people, of whom 3,000 are Samsung employees and the remainder are contractors. The tech giant also has a research and development facility in Austin.
It’s hard to say whether Samsung’s lack of contact with Travis County’s lately means the company has cooled the Austin location idea – and possibly its interest in Taylor, a community of roughly 18,000 residents in east Williamson County , has increased – or whether it’s just part of the negotiation process, said Endpoint Technologies Associates tech industry analyst Roger Kay,
“Samsung has a lot of money to spend and they want to make the right choices because the consequences will be long-lasting,” said Kay. “We can’t look inside the heads of management so we don’t know what they’re thinking, but I can see them continuing to negotiate, looking for last minute concessions that will seal the deal. But this hesitation also shows that no one site is clearly a leader, at least from an outside perspective. Perhaps Samsung is hoping for a better deal from their favorite site known only to them. “
Ed Latson, executive director of the Austin Regional Manufacturers Association, said competition to locate the Samsung plant continues.
“Not much has changed. Samsung still hasn’t officially announced where its new plant will be. Central Texas remains in a multi-state competition,” he said. “ARMA hopes it ends up in Taylor or Austin. And the officials would be insane if they didn’t do everything they can to support an expansion in their city.”
There are significant tax incentives for Samsung if it chooses any of the central Texas locations for its new facility.
For the Austin site, Samsung said earlier this year that it intends to receive tax breaks from the city of Austin of $ 872.5 million over 20 years and tax breaks from Travis County of $ 610.5 million over 20 years and tax breaks from the Manor Independent School District valued at $ 285.5 million over 10 years, according to documents filed with the state. If the incentives were approved, the city, county, and school district tax breaks would total about $ 1.77 billion.
None of these potential tax breaks have been approved by Travis County, the City of Austin, or the Manor School District.
For the Taylor site, Williamson County Commissioners Court and the City of Taylor issued initial approval in September of agreements that, taken together, could bring Samsung more than $ 350 million in tax breaks over 10 years. Samsung is also poised for a Taylor Independent School District Incentive Agreement valued at $ 314 million over 10 years.
It is difficult to estimate the value of these publicly funded incentives beyond 10 years because the future tax rates and taxable value of Samsung’s property are not yet known. But the full value of the Williamson County site incentive agreements could eventually exceed $ 1 billion.
If Taylor is selected, the factory would be built on land with Samsung purchase options that is southwest of downtown the city off US 79 and 401 County Road.
Taylor “is honored to be considered for this critical project and we look forward, if selected, to a long-term relationship that will benefit the company and our community for generations to come,” said Taylor Mayor Brandt Rydell in a written declaration. in February
Samsung has announced that it will also seek incentives from the state to build its factory in one of its two locations in central Texas.
More:Tesla still doesn’t reveal many details about relocating its headquarters to Austin
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If any of the locations are selected, it will add to an impressive streak of success for the Austin area’s technology sector and its broader economic base.
Tesla CEO Elon Musk announced on October 7th that the automaker will be relocating its headquarters from California to Austin. That news came 15 months after Tesla selected a location in the Austin area as the location for its $ 1.1 billion manufacturing facility currently under construction on 2,100 acres in southeast Travis County. The first vehicles are slated to hit the market later this year, and the facility could add more than 10,000 new jobs to central Texas by 2022.
Software giant Oracle announced last December that it would move its headquarters from California to Austin. A number of other technology giants – including Apple, Facebook, Google, and Amazon – have recently expanded their operations in central Texas, expanding the technology sector that has long been anchored by Round Rock-based Dell Technologies.
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https://www.statesman.com/story/business/2021/10/29/tax-break-talks-lag-between-samsung-travis-county/6179544001/
