Travis County Commissioners To Discuss Potential Tesla Deal

AUSTIN, TX — Travis County Commissioners Court members at their meeting next week are scheduled to discuss a proposal from electric carmaker Tesla Inc. to build a manufacturing plant in the region's Eastern Crescent.

Details emerged this week of Tesla's interest to build the plant — a "Gigafactory" in its corporate nomenclature — on 2,100 acres straddling the State Highway 130 toll road. The plant would encompass between 4 million and 5 million square feet of space, according to an application submitted to the Texas Comptroller of Public Accounts — a copy of which was obtained by Patch.

The company is seeking financial inducements such as tax abatement from county officials to build the plant in the focused area, which is within the Del Valle ISD taxing jurisdiction. Company officials have conveyed the plant's construction would create some 5,000 jobs with an average salary of $47,147.

Del Valle ISD on May 26 approved accepting a Chapter 313 application for certain property tax incentives, accepting a $150,000 application fee from the carmaker as outlined in the comtroller's office filing.

As shown on the Travis County Commissioners Court website, discussion on the project dubbed the "Colorado River Project, LLC" is the 18th agenda item for the upcoming meeting scheduled Tuesday, June 23. Residents wishing to watch the discussion remotely can click here.

Screenshot of Travis County Commissioners Court agenda showing an entry for discussion on the Tesla plant scheduled on June 23.

The deal in the making has generated much buzz across the Austin area given Tesla's high profile. The upcoming commissioner's meeting will mark the first time the matter is formally discussed by a government body after the emergence of the Tesla-filed application at the state comptroller's office.

And yet, the matter is already generating controversy even in those nascent stages of development. Texas AFL-CIO President Rick Levy joined others in penning a strongly worded letter to the commissioners on Friday morning ahead of their meeting, essentially calling for them to "...slow down and review the ramifications of public subsidies for a new Tesla plant," official wrote in the correspondence, a copy of which was provided to Patch.

Labor union officials framed their letter against the backdrop of the coronavirus pandemic to buttress their urging of caution. A pair of representatives provided statements apart from the correspondence to commissioners:

• "You have to look strongly at the track record of a company and their commitment not just to public dollars, but to the community investment and actual return on jobs created,” United Auto Workers Vice President Cindy Estrada said in a prepared statement. “Tesla has a track record of collecting public subsidies from several states but not delivering on their promises. That is why it is important this time for Tesla to commit to community assurances for Travis County before getting subsidies. Things like paid sick leave are important not just to workers but the community as COVID-19 has shown.”
• Added United Auto Workers Region 8 Director Mitchell Smith: “It’s a buyer beware situation. If you look at the track record you have to wonder if this taxpayer money will result in the promised jobs. It is important to slow down at a time when governments are struggling with the budget effects of COVID-19 and make sure we have strong assurances to the community that these jobs will be good paying quality jobs, that there will be safety in the plant, and that there is a guaranteed community benefit.”

The letter from union representatives reads:

"This week you have the difficult decision of discussing public monies in support of promised jobs. The UAW and organized labor have a long proud history in Texas working in tandem with employers where solid jobs are created and families and communities are supported through government investment and loans.

"But in the case of Elon Musk opening a new Tesla “Cybertruck Gigafactory” in Travis County it is important to look at the track record of the company involved. As such we have attached two documents for your review:

• A Fact Sheet on Tesla Inc.’s history with other government entities on public subsidies and deliverables in exchange for the subsidies.
• A Community Assurance proposal that we believe will best protect and guide the citizens of Travis County should this investment be made.

"We believe in jobs and job development. But we also believe in the protection of taxpayer investment in those quality good-paying jobs. We appreciate your attention to this matter."

The letter is signed by Estrada and Smith along with Rick Levy, president of the Texas AFL-CIO; Jason Lopez, president of the Austin Central Labor Council; and Carol Guthrie, business manager, AFSCME Local 1624.

Labor union officials provided Patch with their "Tesla Fact Sheet" on Tesla, ticking off a list of perceived inequities between what the company has offered in other locations versus the benefits to the various municipalities.

"Tesla has relied heavily on taxpayer subsidies while falling short on delivering on its commitments," officials wrote. "The company has repeatedly benefited from generous taxpayer support; Nevada, New York, California and the federal government have supported Tesla with billions in financial incentives. Yet states have paid a price for their generosity."

The officials also decry the use of financial inducements to lure business construction, citing a recent Bloomberg Businessweek analysis by economists questioning the notion of municipalities reaping broad economic growth as a result of granting tax breaks to prospecting firms.

For added measure, labor union officials categorized such tax inducements as nothing more than a "handout," in this case to billionaire Tesla CEO Elon Musk, reported to have a personal net worth of $36 billion.

"We all welcome the creation of safe, well-paying jobs in our communities," officials wrote. "But there is no need for a billionaire entrepreneur to reach into the pockets of taxpayers. This is especially critical right now as state and local government treasuries have been devastated by the coronavirus pandemic."

They called for Travis County Commissioners to be transparent in their dealings with the company: "Public officials’ discussions with Tesla should be open and transparent, and not shrouded in secrecy. It’s taxpayer dollars — and the health of our state — that are at stake."