Updated June 10 at 4:47 p.m.

A total of three companies—National Instruments, Dropbox and US Farathane—have canceled their economic development agreements with the city of Austin since February, city staff confirmed June 10.

In a statement, Mayor Lee Leffingwell said the news is disappointing. The city had not made any incentive payments to the three companies.

"The Dropbox, National Instruments and US Farathane agreements represented close to 1,400 quality jobs, potentially for Austin residents some of which would have paid an average annual wage of up to $72,000 a year, just about what I make as mayor of this great city," he said. "I have long championed the benefits of economic incentives and strongly believe they have contributed to our city's economic success."

Of the 21 original incentive deals approved by council since the incentive program's inception in 2003, a total of nine companies have dropped out of the program for various reasons. Nine company-based agreements are still active plus the agreement with The Domain.

"I maintain that these incentives have played an important part in Austin setting the pace in regard to our unemployment rate and well-respected national economic standing," Leffingwell said. "We must remember that past and present success is no guarantee of future success."

City Council approved the agreement with Dropbox on Feb. 20. The company would have received $244,000 in incentives for creating 170 jobs. US Farathane's deal for $212,696 in exchange for creating 228 new jobs was approved in 2011.

On Oct. 24, City Council approved a new matrix of requirements that companies must fulfill to be eligible for an incentive. However, the matrix changes only applied to companies that filed applications for an incentive after that date, according to city staff.

"It concerns me that we have greatly diminished the effectiveness of our incentive program by placing burdensome conditions into the agreements," Leffingwell said. "These obligations range from exceedingly difficult reporting requirements to new provisions regarding prevailing wage and minimum living wage and other requirements."

Originally posted June 9 at 5:24 p.m.

North Austin–based National Instruments has opted to cancel its economic development agreements with the city of Austin, Travis County and the state of Texas.

In a letter to City Manager Marc Ott dated May 22, the company announced that difficult conditions in the test and measurement industry and global economy as reasons for pulling the plug on the incentive deals.

"As we have reported to our investors, our goals for 2014 are to continue leveraging the investments we have already made in order to drive sustained revenue growth and improve our operating margins," said David Hugley, vice president and general counsel, in the letter. "To that end, we have elected not to proceed with the economic development agreements reached with the city of Austin, Travis County and the state of Texas in 2013."

City Council approved a $1.7 million agreement with National Instruments on March 7, 2013. Per the agreement, NI had planned to build a 300,000-square-foot research and development facility on the campus of its headquarters at 11500 N. MoPac. NI also planned to create about 1,000 jobs, and the city would have garnered about $7.6 million in net benefits from the 10-year agreement.

Melissa Alvarado, senior public information officer for the city's Economic Development Department, confirmed that the city had not made any incentive payments to National Instruments.

"We've had a great relationship working with National Instruments," she said. "We are grateful for their strong presence in Austin. While their agreement with the city of Austin is no longer active, they are still committed to maintaining a strong business and community presence in Austin."

The state would have contributed about $4.4 million from its Texas Enterprise Fund while Travis County had agreed to a grant for about 43 percent of the company's property taxes.

National Instruments has not indicated if it will still pursue any expansion or new job creation plans as indicated in the agreement. A company spokesperson sent out a statement indicating NI is "optimistic about the remainder of 2014 and [remains] committed [to its] long-term growth strategy, sustained investment in research and development, and continued engagement with our Central Texas community."

The city still has 11 company-based economic development agreements with companies in Austin.