Travis County approves 20-year incentives deal with Tesla for potential gigafactory

A photo of the property Tesla is considering
Tesla is eyeing a 2,100-acre site in Southeasten Travis County for its next gigafactory. (Olivia Aldridge/Community Impact Newspaper)

Tesla is eyeing a 2,100-acre site in Southeasten Travis County for its next gigafactory. (Olivia Aldridge/Community Impact Newspaper)

Travis County approved an economic incentive agreement offering electric automaker Tesla millions in property tax rebates on a potential 4-5 million square-foot gigafactory in the Del Valle area along SH-130.

Travis County Commissioners Court voted at a July 14 meeting to enter a 20-year performance-based deal with Tesla, incentivizing the company to build its next factory in Texas over Oklahoma.

Based on the approved deal, Tesla would receive a 70% rebate for maintenance and operations property taxes on the first $1.1 billion it invests in Travis County. The company would receive a 75% rebate for taxes associated with the second “incremental billion,” and 80% once $2 billion of investment is exceeded, according to the deal.

The county vote came after several weeks of deliberation by the court in executive session, and after receiving diverse public comment on the decision. According to Travis County Judge Sam Biscoe, another wave of emailed community feedback came in following the county's release of update incentive structures for the Tesla deal last Friday, July 10.

“We did take those matters to heart, and as a result have made some changes,” Biscoe said ahead of the commissioners' vote.

Those alterations, as presented by county Director of Economic Development & Strategic Investments Diana Ramirez, include expressed requirements to provide rest breaks for construction workers; required insurer-provided oversight of construction activities; required Occupational Safety and Health Administration Trainer for construction activities; and the specific inclusion of food service and janitorial workers under Tesla's $15 an hour minimum wage requirement.

The changes brought the county closer to meeting the requests of local labor union representatives from United Auto Workers, Workers' Defense and other groups to hold Tesla to Travis County's Better Builder Program standards. Many of those representatives said during public comment that the changes fell short of their hopes, and urged commissioners to hold off on voting to give the public time to review the deal's details. Commissioner Gomez made a similar request, and ultimately abstained for voting.

Other callers, however, pushed the court not to delay.

"We have to vote today," caller Todd Wallace said. "Time kills deals."

Tesla representative Rohan Patel also urged the vote to move forward, noting that the company was currently in talks with another state's governor and a mayor as well.

"We have to make a decision," Patel said.

Last week, Del Valle ISD has also approved economic incentives for Tesla totaling about $46.4 million through a Chapter 313 agreement that caps the taxable value of Tesla’s project at a lower rate than its appraisal. The city of Austin will also hear a presentation regarding Tesla on July 16.

Travis County and DVISD's votes do not guarantee that Tesla will choose to build its next "gigafactory" locally, although representatives from the company have said tax incentives were a prerequisite for choosing the Austin area. Officials in Oklahoma are also dangling incentives to woo the carmaker, although specifics have not been made public.

Tesla may announce its choice for the gigafactory site during its quarterly earnings call July 22. If the company chooses Travis County, the 4-5 million-square-foot plant would locate on a 2,100-acre site near Austin-Bergstrom International Airport. The factory is expected to bring more than 5,000 new jobs, 50% of which will be guaranteed for Travis County residents.

This is a developing story. Updates will be added as new information becomes available.
By Olivia Aldridge

Reporter, Central Austin

Olivia joined Community Impact Newspaper as a reporter in March 2019. She covers public health, business, development and Travis County government. A graduate of Presbyterian College in South Carolina, Olivia worked as a reporter and producer for South Carolina Public Radio before moving to Texas. Her work has appeared on NPR and in the New York Times.


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