Websense, Dropbox incentive deals pass at Austin City Council

Economic Incentive agreements for technology companies Websense Inc. and Dropbox Inc. gained Austin City Council approval at a special-called meeting Feb. 20. Both agreements passed on 5-2 votes, with Councilwomen Kathie Tovo and Laura Morrison voting against the measure.

Councilman Mike Martinez said after working to improve the city's development policy during the past two years, he is happy to see companies adopting those provisions voluntarily.

"I believe in our economic development polices, and I believe that creating good jobs is incredibly important for our community," Martinez said.

Websense is expected to bring 470 new jobs to the city in the next 10 years at an annual wage of about $82,000. In exchange, Websense will gain about $438,000 in incentives. Dropbox is expected to bring 170 new jobs to the city in the next decade, with new employees earning about $59,000 per year. The deal grants Dropbox about $244,000 in incentives the next 10 years.

Mike Rollins, Greater Austin Chamber of Commerce president, said both businesses help diversify Austin's economy, with Websense possibly bringing its company headquarters to the city while Dropbox focuses on cloud computing.

"[Dropbox] is in an area that we are trying to create a critical mass, and it's is cloud computing," Rollins said. "I think that is a growing end of technology that Austin can benefit from."

Morrison spoke against the agreements, questioning whether the city needs to continue giving out incentives as the economy strengthens. Morrison pointed out that in 2010, the city did five incentive deals with an unemployment rate for the Austin Metropolitan Statistical Area of about 7.1 percent. In 2014, with a 4.5 percent area unemployment rate, council could pass as many as seven incentive deals.

"I especially disagree that now is the time that we multiply the number of deals and we do more than ever," Morrison said. "For me, it's very important, and I have to ask this council and community what's going to happen next month and the following months when staff brings to us No. 4, No. 5, No. 6 and No. 7, are we going to really continue to be doing all these deals."

Austin resident Paul Robbins also spoke against the agreements to council, said economic incentives do not always have positive results, suggesting they have cause increased living costs.

"Many of the financial problems Austinites are experiencing are related to uncontrolled growth that [City Council] is fueling even more with the incentives [council] is voting on today," Robbins said.

In response to some of the controversy surrounding the Websense deal—including complaints insinuating the company already plans to locate to Austin, with or without incentives—Councilman Bill Spelman asked Websense officials if the incentive made any difference.

Jim Hagan, Websense chief financial officer, said his company is looking at other cities and has the option to stay in San Diego.

"I think we are in a competitive situation," Spelman said. "I think the incentive has an important bearing on the likelihood that Websense will actually show up in Austin."

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