Travis County OKs key terms of HID Global economic development deal

On Oct. 2, the Travis County Commissioners Court approved key terms of a decade-long economic incentive deal with HID Global Corp.

The Irvine, Calif.-based company, perhaps best known for its keycards and card readers, asked for financial incentives to build a new manufacturing and distribution center in Travis County, according to background documents.

HID Global plans to hire 276 people and build a $30 million, 200,000-square-foot facility behind the Shops at Tech Ridge at 601 Center Ridge Drive.

On Sept. 27, Austin City Council approved a deal with HID Global worth $920,576 in tax rebates over 10 years.

The county approved the key terms of its agreement by a 3-1 vote. Commissioner Sarah Eckhardt opposed and Commissioner Margaret Gomez was absent. The vote authorizes county staff to negotiate details and bring back a final draft Oct. 9.

Under the key terms, HID Global would invest $30 million in new construction and build a new facility before June 30, 2014. It will invest $6 million in business personal property value such as equipment.

The company would create and maintain jobs at an average salary of $44,336–$53,163 over the 10-year period. It would also work with nonprofits and make "commercially reasonable efforts" to recruit Austin-area and Travis County residents.

In exchange, the county would offer a base rebate of 40 percent of property taxes. The company could earn another 5 percent if it could certify that county residents made up more than half of the new hires.

HID Global could gain an additional 5 percent rebate if the new facility earned platinum LEED certification. LEED stands for Leadership in Energy and Environmental Design and refers to green building standards.

Discussion

Eckhardt said that the per job cost of the rebate was about $2,500 per position and was roughly equivalent to the economic incentive deal the county struck with Apple Inc. earlier this year. She said that she did not believe that economic incentives create jobs.

Prior to the vote, the county heard from several speakers who addressed workforce training and the salaries of the workers who would build the new facility.

Skillpoint Alliance Executive Director Margo Dover said that while the training organization was neutral on incentives, it supported the creation of new jobs. She said the jobs could help veterans and high school dropouts.

Kathy Walton, an executive director at Austin Community College, said that 80 percent of the college's students come from Travis County and plan to stay there.

Luke McCracken with Manpower Employment Solutions praised HID Global for bringing manufacturing jobs to the area.

Eckhardt asked representatives from HID Global whether the company would establish an $11 wage floor for employees and contract construction labor. The company representatives replied no.

A representative from the local electricians' union, Philip Lawhon, asked the county to request prevailing wages and a wage floor.

Through a translator, a pair of Spanish speakers called for higher wages for construction jobs in order to make ends meet. They suggested that a living wage would be $12 per hour.

Judge Samuel T. Biscoe said typically the county has looked at workforce jobs, not construction jobs, when considering deal terms.

"I'm uncomfortable with trying to impose such a standard sort of at the 11th hour," he said. "It seems to me to be a more appropriate use of our time for us to try to put our heads together and come up with a policy that we use, and to be honest, we ought to work with City of Austin [and other entities who give incentives] to try to come up with the best policy we can for our community."

He added that he would be uncomfortable imposing a $12 minimum wage if Travis County itself does not offer the same.

Eckhardt offered a motion approving the key terms with the inclusion of a $11 minimum wage. The motion died for lack of a second.

She called HID Global a good company that treats its employees well.

"But rather than attract HID or any other company through shifting the tax burden on to others who are less able to pay, I would much rather attract companies with a well-educated, happy, healthy and appropriately compensated workforce, a beautiful safe and healthy environment, and a fair and stable society in which HID or any other company can reliably do business," she said.

By Joe Olivieri
Joe covered Southwest Austin news for Community Impact Newspaper from January 2011 to April 2015. His reporting focused on new businesses, development, transportation, industry and Travis County issues. He was named the paper's managing editor in April 2015. Joe hails from New Jersey.


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