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Samsung has had a presence in Austin for nearly 25 years, purchasing 258 vacant acres adjacent to its corporate campus less than 12 months ago, and received government approval in January to divert a nearby street called Samsung Boulevard, which will enable it to make a major expansion possible the city.
All of this begs the question: If the South Korean computer chip maker decided to build a new $ 17 billion factory in Texas, it would really be in Taylor, a small town 25 miles away, rather than Austin settle?
Addressed this possibility in filings for corporate taxation in both locations demanding hundreds of millions of dollars in tax breaks over the next decade, Samsung stated that being willing to offer publicly funded incentives will be key to its considerations of where the new state should be placed. state-of-the-art chip factory.
But not everyone is convinced that a potential election by Taylor – a community of roughly 18,000 residents in eastern Williamson County – is more than just a bargaining chip by Samsung to try to secure the cheapest incentive deal for a desired expansion in Austin, where the company currently has its largest operation outside of South Korea.
More:Experts say central Texas is still a great option for a potential $ 17 billion Samsung factory
More:Samsung is seeking Austin tax breaks among the greatest of all time
Samsung’s only US manufacturing facility is located in Austin, and the company also has a research and development center in the city. About 10,000 people work at its headquarters in Austin, according to the company, of whom about 3,000 are direct Samsung employees.
The company said locations in Arizona and New York are also being considered for the new factory.
“The idea that Samsung is even raising (Taylor as a possibility), I think, is a little bit more” of incentives from the various tax authorities that the current Austin campus is on, said Roger Kay, president of Endpoint Technologies Associates is based near Boston, with Samsung following suit.
Samsung “is trying to get the last ounce of bargaining leverage by throwing Taylor up like a straw,” said Kay.
Clearly, the new Samsung factory and its estimated 1,800 high-tech jobs would be a change for Taylor – in addition to a big surprise win for her over Austin.
But it could be a mistake to completely neglect Taylor’s chances.
The appeal of the City of Taylor compared to Austin
The community has a number of attributes that may make it ripe for growth, including an address in the trendy metropolitan area of Austin, but with lower land costs and traffic that comes with proximity to Round. goes along with Rock, Pflugerville, and other rapidly growing suburbs.
Taylor – which counts the operations center for the state power grid manager of the Electric Reliability Council of Texas as a top employer – has been growing in population, albeit at a rate well below the boomtown of Austin and several other surrounding communities .
“I’m not surprised (that Samsung named Taylor as a possible location for its factory) because there is very beautiful land to develop,” said Floyd Zuehlke Jr., longtime president of Floyd’s Glass Co. Taylor business. “And I don’t think they’ll find it difficult to get people from Round Rock, Hutto and Pflugerville to work there.”
Zuehlke, who employs around 160 people, says he appreciates Taylor’s relatively central location between Austin, Waco and College Station, where his company operates in the construction sector.
As the Austin metropolitan area continues to expand, it is inevitable that further developments will be on the way for Taylor – although he is one of those who, in the case of Samsung, believes it possible that the city is just a negotiating tool.
“Big companies negotiate and play hard. It could just be (Samsung says that to Austin): ‘Hey, we have options, and if we don’t get what we want, we will come here,'” said Zühlke. “I would think there is a big chance for that.”
Possible tax breaks for Samsung in Texas
Based in the Manor Independent School District, Travis County and the city of Austin, Samsung is looking for tax-funded incentives valued at an estimated $ 1 billion to $ 1.8 billion in its new chip factory nearby, according to documents filed with the Texas Auditors in January of the existing Austin campus.
If it gets those tax breaks, the entire incentive package would be among the 20 most expensive nationwide in at least 45 years, according to Good Jobs First, a Washington-based nonprofit that pursues government incentives for businesses.
The tax breaks have not been approved by any of the local tax authorities. Manor and Travis Counties School District are considering applications from Samsung but have not yet held public hearings about them, while Austin city officials have declined to say whether they received a tax break application from the company.
In Taylor, Samsung is seeking a $ 314 million tax break from the Taylor Independent School District, according to documents submitted to the auditor last month. The company also stated in the filing that it intends to solicit incentives for the project from Williamson County and the City of Taylor, although it did not provide an estimate of its value.
In addition, the company has announced that it will receive incentives from the state should it choose one of the locations in Texas.
“This regional public support will reduce operating and financial costs for a given site and allow Samsung Austin Semiconductor to meet its operational and financial goals for the new facility,” the company said in its submissions to Taylor and school districts Mansion.
A Samsung spokeswoman declined to comment on the chances that Samsung might vote Taylor over Austin. Williamson County and the City of Taylor declined to confirm they received tax relief requests from the company.
Devin Padavil, Superintendent of the Taylor School District, would not specifically discuss the Samsung factory, but did tell the American statesman that he believed Taylor was well equipped to compete for and win major economic development projects in the area.
“I have no concerns” about Taylor’s competitiveness, said Padavil. “I think the Taylor community is a gold mine for potential business – even for residential development in the neighborhood. It is a great church with tradition and for (economic) growth. “
The city is becoming “very desirable to families and businesses” as the Austin metropolitan area continues to expand, he said, so “any economic development that comes out of here” would be a wise decision.
Is Taylor Still a Longshot for the Samsung Factory?
However, if Samsung chooses to build the new factory in Texas but chooses Taylor over Austin, the company would disregard its local infrastructure built in more than two decades and instead start from scratch in a small town. Some observers do not think this is likely.
“My honest opinion is that this is a shameless game of local governments,” said Nathan Jensen, a professor at the University of Texas who studies tax incentives for businesses, to wrest more concessions for Austin expansion.
Kay of Endpoint Technologies said the taxpayer-funded incentives on offer in the Taylor region likely have to be huge – and dwarf those in Austin – to make the new one easy to build and operate with efficiency and convenience To balance the plant on the land Samsung already owns next to its existing campus.
According to its application for tax breaks from the Taylor School District, Samsung had not purchased any land for the Taylor factory until last month.
“Right now, for a variety of reasons, it makes more sense for Samsung to build the new chip factory in Austin,” says Kay, who sees Austin as a front runner for the project, with the Phoenix area as the most likely alternative.
However, only Samsung officials know for sure how the company is set up.
As for Taylor’s chances, Zühlke has reservations about the publicly funded incentives the small town needs to assert itself. But he said they would probably be worth it.
“It’s always a hurtful thing for companies that are already there when they see other companies coming to receive tax breaks – it’s kind of bitter to swallow it,” said Zühlke. “Sometimes it doesn’t seem fair, but it happens all the time”
In the case of Samsung, he said, “I think there will be more benefits than not,” even with the tax breaks.
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