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Tesla picks Austin for its next US factory to build Cybertruck, Semi truck, Model Y:
Tesla has picked a site near Austin for its next U.S. factory, a 4- to 5-million square foot $1.1 billion plant that will assemble the automaker's futuristic Cybertruck, the Tesla Semi and the Model Y and Model 3 for sales to customers on the East Coast.
[...] Tesla CEO Elon Musk described the future factory as an "ecological paradise," with a boardwalk and bike lanes and where the public will be welcome. While tours have been offered at Tesla's Fremont, Calif., the campus is not open for the public to wander its grounds.
[...] Tesla has promised Texas officials it will employ at least 5,000 people. About 25 of those workers are categorized as "qualifying" jobs and would be paid a minimum of $74,050, while the remaining would be middle income jobs with an annual salary of $47,147.
[...] Under terms of the agreement with Travis County, Tesla must invest $1.1 billion in the new factory within the first five years. In exchange, Travis County will rebate 70% of the property taxes Tesla will pay. Once Tesla's investment in the factory eclipses that $1.1 billion mark, the property taxes rebates will increase to 75%. Any investments in the factory beyond $2 billion, will give Tesla 80% in property tax rebates.
[...] If Tesla fails to hit the investment goal or if its falls 75% short of its jobs requirement in any year, the company won't receive any property tax relief. The county will also have the ability to recoup tax rebates if Tesla breaches its contract.
Together, Tesla will receive at least $61 million in property tax abatement. It's possible that Tesla could receive more from the state.
(Score: 5, Insightful) by istartedi on Friday July 24 2020, @03:43AM (6 children)
Yeah, cool new tech and all, but I hate these deals. What could we do at the Federal level, if anything, to prevent local governments from competing over corporate interests? All the companies know they can do it, so we get a race to the bottom that erodes local tax bases nationwide and magnifies the big vs. little problem. Why does Tesla pay a lower tax rate than some small software company working out of a loft space in the same city? Because they're big enough to dangle carrots in front of the whole city. It's patently unfair.
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(Score: 4, Informative) by Muad'Dave on Friday July 24 2020, @11:30AM (3 children)
It may be unfair in your (liberal) mind, but it makes economic sense for the citizens of Austin.
Does you loft dweller dump a minimum of 236.4 million dollars a year into the local economy via employee salaries? Does your loft dweller pay millions for power, water, etc?
I didn't think so.
Plus, if Tesla's goals aren't reached, Austin can collect the back taxes.
(Score: 2, Informative) by istartedi on Friday July 24 2020, @03:47PM (1 child)
I'm not particularly liberal (that's leftist for the rest of the world); you'd have to really know me to understand my PoV. I don't like corruption, regardless of the color of the party.
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(Score: 0) by Anonymous Coward on Friday July 24 2020, @04:14PM
Most of tesla is built upon that sort of deal. I think he went hunting for a new deal when the existing deal holder decided to be a jerk.
(Score: 0) by Anonymous Coward on Friday July 24 2020, @10:12PM
Does it? If that's genuinely the case, then Tesla fucked up pretty badly. These deals virtually always wind up with the local taxpayers being screwed to pay for the corporations that then leave the moment there's a better deal someplace else.
Really, cities need to stop competing to host these kinds of enterprises. It's one thing to give them things that you should already be doing for the local taxpayers, but they tend to want various subsidies and the like that fuck over the local taxpayers. Just look at what Foxconn got from Wisconsin and they got virtually none of the promised jobs.
(Score: 3, Interesting) by Phoenix666 on Friday July 24 2020, @02:57PM (1 child)
Large companies like Tesla bring a lot of positive externalities to a city, so it makes economic sense for municipalities to entice them. Tesla, in particular, is a unicorn in America these days, a manufacturing company that is growing and making money and which enjoys cachet. Austin, for its part, probably feels a keen need at the moment to diversify its economy away from total dependence on SXSW, suppressed because of concerns about the Chinese virus.
You are quite correct that economic policy and incentives are skewed. Heaping benefits on large players does not help startups and entrepreneurs innovate and develop a dynamic company. That hurts everyone and has produced a sort of neo-feudalism.
Washington DC delenda est.
(Score: 0) by Anonymous Coward on Friday July 24 2020, @10:14PM
Do they? How is this any different from having Amazon? Sure, there's cachet, but they do their best to suck the locality dry at every turn.