Tesla eyes eastern Travis County spot for new factory with possible tax incentives for the company

Tesla is considering this site along SH-130 as the future location of its next gigafactory. (Nicholas Cicale/Community Impact Newspaper)
Tesla is considering this site along SH-130 as the future location of its next gigafactory. (Nicholas Cicale/Community Impact Newspaper)

Tesla is considering this site along SH-130 as the future location of its next gigafactory. (Nicholas Cicale/Community Impact Newspaper)

Electric automaker Tesla is considering 2,100 acres near Del Valle in Travis County for the site of its next factory—for which Del Valle ISD is considering a tax incentive deal to draw Tesla to the area.

Travis County is also considering economic development incentives for the project, which is located outside the Austin’s city limits. Travis County commissioners took an item regarding tax incentives of an unnamed project into executive session June 16, while members of the public and local auto unions discussed the potential project during public comment, and has posted an item naming Tesla as the subject of the project in question on their June 23 agenda.

“[The Commissioners Court] is in deliberations with Tesla for an Economic Development Performance Agreement that would bring a 'gigafactory' to the eastern crescent of Travis County," Travis County Public Information Officer Hector Nieto said in a June 18 statement. "For that item, the Travis County Commissioners Court will receive presentations from Travis County staff and Tesla representatives. The Court encourages the public to provide input on Tuesday when it takes up the item. It is the Court’s intention to not take any action on the item.”

In documents released by the Texas Comptroller June 18, Del Valle ISD outlined plans for a possible reinvestment zone designed to incentivize Tesla’s development on a site located at the intersection of Hwy. 130 and Harold Green Road, approximately three miles northeast of Austin-Bergstrom International Airport.

Tesla's new “gigafactory,” as the company terms it, would be a 4 million-5 million-square-foot manufacturing plant that produces vehicles for distribution in the eastern half of the U.S. and would create an estimated 5,000 jobs, according to comptroller documents.

Construction on the potential site is anticipated to last two to three years and, if approved, would begin in the third quarter of 2020. Commercial operations could begin as soon as the fourth quarter of 2021, according to the documents.

At more than 2,100 acres, the site would be almost twice the size of Austin’s 1,100-acre central downtown business district and about seven times the size of The Domain in Northwest Austin, which is approximately 300 acres.

The reinvestment zone would fall under Chapter 313 of the Texas Tax Code, which allows school districts to offer a 10-year limitation on the taxable value of property to incentivize a development that promises significant job creation. Del Valle ISD’s proposal for the “Tesla Reinvestment Zone” is listed with an anticipated Sept. 15 signing date.

"On behalf of our students and teachers, we are excited by the prospect of a company of this magnitude coming to our district," DVISD Superintendent Annette Tielle said in a statement given to Community Impact Newspaper. "This type of partnership could provide our students authentic, rigorous, and practical internship, apprenticeship, and work study programs in the areas of robotics, engineering, manufacturing, and STEM. Our focus has always been ensuring that our children have robust and successful futures. The addition of a company who has the ability to support our community both economically and academically would be advantageous for our students and accelerate our efforts to mentor and develop the workforce of the next generation.”

Tesla acknowledged in documents released by the comptroller that the automaker is still considering a site in Oklahoma for its next gigafactory as well. The determining factor between the two sites could come down to local and state tax incentives, according to Tesla.

“For a project to succeed, it must also have an acceptable rate of return to secure the necessary capital and compete in the automobile industry against some very capable competitors that have been longstanding industry players,” Testa states in the documents. “Therefore, local and state tax incentives serve a critical role in getting the project approved and operating successfully. This is especially critical in Texas due to the high level of real and personal property taxes relative to other states. Since school taxes are the largest component of local property taxes, the Section 313 tax limitation is especially critical to create a level playing field between Texas and other states vying for this project.”

Charisse Bodisch, senior vice president of economic development for the Austin Chamber of Commerce, confirmed these ongoing considerations in a statement.

“While we have engaged in multiple discussions with Tesla, the company has not made a final decision regarding its next gigafactory,” Bodisch said. “The potential location being explored is an underutilized site that is in clear need of revitalization, and it would be a perfect fit for an environmentally focused organization like Tesla. We are home to a talented and diverse workforce, and we are grateful that Austin is being considered. We will continue to make the case for why this would be a win for Tesla and for our community when it comes to job creation, economic impact and workforce development.”

Additional growth is already planned for the area around the Tesla site. Velocity—a more than 315-acre, mixed-use project that will begin construction in early 2021—is set for construction a little over 2 miles south of Tesla, just west of SH-130. According to a June 15 news release by the Velocity team, the project will include 2,638 multifamily units, an H-E-B supermarket, 310,000 square feet of retail space, 2.9 million square feet of office space and almost 600,000 square feet of industrial space.

Capital Metro on June 10 approved Project Connect, a transit plan that includes adding light-rail lines and expanding the local bus network in Austin and Travis County. Although funding has not been secured, the Project Connect plan would bring light-rail service to the airport, offering transportation solutions to connect the eastern part of the county to downtown.

The site is currently made up of 50 individual parcels of land. Much of the land in question is currently owned and operated by Martin Marietta and provides the site a sand and gravel mining site and concrete batch plant. This business, along with others, would have to be relocated for Tesla to develop the area.

This is a developing story. Updates will be added as more information comes to light.
By Nicholas Cicale
Nick has been with Community Impact Newspaper since 2016, working with the Lake Travis-Westlake and Southwest Austin-Dripping Springs editions. He previously worked as a reporter in Minnesota and earned a degree from Florida State University.
By Olivia Aldridge
Olivia is the reporter for Community Impact's Central Austin edition. A graduate of Presbyterian College in upstate South Carolina, Olivia was a reporter and producer at South Carolina Public Radio before joining Community Impact in Austin.


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