Austin City Council approves economic incentive deal with HID Global

Austin City Council approved an economic incentive agreement with Irvine, Calif.–based HID Global Corp. worth approximately $920,576 in tax rebates over 10 years at its Sept. 27 meeting. The secure identity solutions company plans to construct a $30 million, 200,000-square-foot manufacturing and distribution center behind the Shops at Tech Ridge at 601 Center Ridge Drive.

HID Global announced plans to build the facility and to hire 276 people Sept. 12 after three years of talks with both the city and the Greater Austin Chamber of Commerce, said Dave Porter, the chamber's vice president of Economic Development.

"Since 2000, our corridor between San Antonio and Austin has lost 66,000 manufacturing jobs. You talk about the disappearing class, much of that has to do with the disappearance of our manufacturing," Porter said.

Margo Dover of Skillpoint Alliance—an organization which works as an intermediary between employers and the community and facilitates workforce training—said she strongly supported the deal, as it would provide jobs with benefits for individuals who have not graduated from high school.

Several speakers expressed concern regarding safety and wages for construction workers. Though the incentive deal does not include the hiring of construction workers, several speakers urged the council to include language in the agreement requiring a living wage, as well as safety training and the hiring of disadvantaged workers.

Gregorio Casar of the Workers Defense Project said he understands a paying job is better than no pay, but said he sees incentive deals as an opportunity to "turn the tide," for workers.

"If we are going to be investing in companies, we can ask for something extra," Casar said.

Mayor Pro Tem Sheryl Cole proposed two amendments to the agreement. One requires the applicant to make "commercially reasonable efforts" to hire disadvantaged workers who have graduated from construction training programs in the construction of the new facility. The disadvantaged workers would make up 20 percent of the construction crews. The other amendment requires the applicant to make "commercially reasonable efforts" to use contractors and subcontractors for the construction of the HID Global facility who provide 10 hours of Occupational Safety and Health Administration training for workers, with supervisors and superintendents receiving 30 hours of such training. It also asks for the contractors and subcontractors to cover all workers with workers' compensation insurance.

Cole spoke of two Austins divided by privilege.

"Today we have a company coming to us where we have an opportunity to do something about that and merge the two Austins, where one has the opportunity to help," she said.

Councilwoman Laura Morrison introduced an amendment that would have required any workers involved in the construction of the facility to receive the prevailing wage, as is required of all city-hired contractors. Austin Economic Development Manager Brian Gildea said HID Global had not been asked to consider that in the negotiations for the agreement, and Kevin Teehan, vice president of Supply Chain for HID Global, said the company's site selection timeline was tight and that if there was a postponement, the site selection committee would likely recommend the company "move forward with other alternatives if the council does not vote favorably."

The motion to require the prevailing wage for construction workers failed, with only Councilwoman Kathie Tovo voting in favor.

"I am very reluctant to put at risk an economic development agreement that offers very significant benefits for the very workers that we're all concerned about," Councilman Chris Riley said. "We are talking about 276 new full-time jobs by the end of 2015 that have an average compensation of $53,000, most of which do not even require a high school diploma."

The council then passed the economic incentive agreement with Cole's amendments 7-0.

Additional reporting by Amy Denney



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