Travis County Commssioners Court
August 12, 2003
The Closed Caption log for this Commissioners Court agenda item is provided by Travis County Internet Services. Since this file is derived from the Closed Captions created during live cablecasts, there are occasional spelling and grammatical errors. This Closed Caption log is not an official record the Commissioners Court Meeting and cannot be relied on for official purposes. For official records please contact the County Clerk at (512) 854-4722.
Item 31
Number 31, consider and take appropriate action on Travis County financial incentives policy to stimulate job creation and economic development. I think the biggest outstanding issue on the policy is whether we leave the minimum capital investment requirement at $100 million or whether we go to a smaller number, and the 12 million that we're looking at now --
>> yes, Commissioner.
>> judge, it's really two things I would like to -- I think the 100 million [inaudible] but I'm just looking at the -- amending this particular policy. And let me just basically go through this real quick. Section 27.004 a 1, and 27.004 a 2 notwithstanding the Commissioners court may designate certain unincorporated areas of Travis County as economically disadvantaged based upon such factors as median family -- median income, unemployment, et cetera. Upon such designation, the minimum [inaudible] investment requires under this policy shall be $12 million. And the -- and the minimum number of jobs created by the project shall be no less than 100. All other requirements of this policy shall remain the same for applications made by companies within an area designated by the court as economically disadvantaged. And judge, the reason for that is because I think we looked at this on the -- in court, we looked at this on the [inaudible] of looking at projects on $100 million basis and 750 employees, but of course [inaudible] hire at least 750 employees or more. But then on the other spectrum, we're looking at a situation where we're looking at economically disadvantaged, persons in unincorporated area of the county. Let me give an example of what's going on in precinct 1. And I think you all may have received some backup from some persons in the area that are doing a lot of development, a lot of home building, but we have about 13 new projects coming out under different subdivisions. Sh 130, which is precinct 1, which is basically has the longest length of that highway through Travis County is through precinct 1. The residents in the area have indicated to me several times that they need to have retail out there. And of course retail meaning that they would like to have a home depot anchor tenant or someone else, and of course then look for that particular anchor. I think currently now if you look at the square footage which is a capital investment thing of this nature, I think you are looking at maybe -- according to sources, $75 per square foot, and I think most of these projects equate to more than 125,000 square foot or greater. So based on those particular situations and based on the unemployment situation in the area and some significant census tracks and based on median family income, we do have economically disadvantaged areas in the unincorporated area of Travis County. And specified in looking at that, I think we ought to be kind of proactive. These are tough economic times. I feel that this in creating job is part of what I think we should be looking at. I think if all the local governments look at it as we are trying to do here by allowing such incentives to companies to locate in an area and also create jobs I think is a great thing. An example if we can get to the next item, which we're not going to deal with that right now, is doing just that. But we're talking about on the higher end of the scale and we're talking about the lower end of the scale for small businesses that would like to invest and hire people out of this community. And of course I think precinct 1 and precinct 4, and I think all the other precincts within Travis County in the unincorporated area may have the same setting as far as economically disadvantaged persons. And not only disadvantaged, but high unemployment. And if you go ahead and look at the unemployment rates here, when Austin and these other areas in the county are enjoying a good employment, of course [inaudible] employment situation over there is still tremendous and we're talking about when it comes to unemployment situations from single digits across maybe the county, but in the census tracks in the area that I'm talking about, we're talking about double digit unemployment. So I just think this would be a great opportunity to amend the existing economic development policy that we have with Travis County, but looking at it from the other end with the $12 million capital investment. And then employ a minimum of at least 100 persons that would or would need some jobs and I think it's going to happen, it's going to come. I'm supportive of it and I think we should [inaudible]. I mentioned a movie theater once before because of tinseltown example out on ih-35, Pflugerville. That's about the closest deal that they have and folks are talking say, hey, why can't we have that. Well, in the complex economic development package, especially when you are dealing with retail, these things kind of congregate together, and of course the square footage could be equated from that end. But I think it's a good move to look at both end of the spectrum because we do have persons here I think that would like to locate over in this part of the community with the growth especially happening over there in precinct -- in this unincorporated part of precinct 1, I think. It's just tremendous. The growth is just there and it's coming. I just want to make sure we address both ends of the spectrum. So this is why this portion should be amended as such. This is why I would like for you guys to support this amendment.
>> so when you say we may designate certain areas of unincorporated Travis County as economically disadvantaged, you have in mind that Commissioners court would in fact do that at some point?
>> yes. Yes. .
>> judge, could I flow out an idea? I've been listening to Commissioner Davis and i've been trying to figure out a way to fold in his suggestion, but in some way that works in terms of it being something that is doable, makes sense. What I'm seeing here is kind of a mixing of some of our terms that makes this overly broad, and I'm trying to figure out way we might be able to narrow it. The way Commissioner Davis has proposed this talks about designating areas, and this policy is really one that is based on a specific project that is p.m. Answer based -- performance based being brought forward. And so if there's a way to talk about the Commissioners court considering projects in unincorporated areas that have been economic disadvantage, and I wouldn't even put that there's a 12 million or a number of jobs. It just says that the court would have discretion to consider other projects with a lower minimum investment and minimum jobs if they meet our requirements related to being economically disadvantaged. I've had some really good talks with the chamber about the kinds of things that they are trying to lure to Austin, and what i've got from them is there are no magic numbers. It's not like 12 is the magic number or 100 is the magic number. There are a lot of things they are trying to lure here. I would call them in the nature of a head quarters, which we would want, but it may not be those jobs, but it's the secondary effect and the tertiary effect and the supply effect. With toyota coming to bexar county, there's a tremendous possibility for us to lure i'll call it an industrial park-like setting because of the kinds of things that people wanting to have access to, sh 130, the airport, interstate 35, just in time delivers. 12 million is not a manualic number nor is 100 a magic number. So to me to try and hear what I'm hearing here, because we do have limits that we can no do things, just broad kinds of stuff because we're not a county of more than 2.4 million people. We are also not a county of less than 400,000. There are also requirements that we can't do things within another incorporated city. So it gets kind of narrow that if we are going to try and do some things, it is out in the unincorporated. So to me I could get comfortable if we had a guideline that says we would consider projects, to be very narrow it is about a parcel, a project, a project that could be performance based, as opposed to just saying it's about designating an area which may or may not be what we had intended and there may be many unintended consequences. Because the bottom line is someone, not a company, but an applicant is going to have to come in and have performance-based measures applied related to measurable accomplishments and public good. And to me an area doesn't get there, but to say consider projects and retaining the discretion to consider a project with a different minimum investment and minimum number of jobs based on our desire to encourage development in the unincorporated part of Travis County with historic median income unemployment, et cetera, et cetera. I guess the message that I got more than anything else from the chamber is for the court to be able to have some flexibility when things are brought to us. That if we go with the 100 million, that's a good thing. But it may not be everything you want to have in terms of that toolbox, as mayor watson used to like to talk about. This is one tool. But there may be other tools that we want to put in there so there are not lost opportunities with these other things that wouldn't meet it. But to me, an area approach is not the way to go. To me, it's one of flexibility.
>> I think -- and we may need language, but the language is a -- where it says that it was intended to be a project would be presented and then the area that the project was in, that the court would look at weather that --
>> and to me that -- [multiple voices]
>> but area is -- area sounds like it's the unincorporated area.
>> well, it was intended to be the area around a presented project within an application.
>> right. But it doesn't -- as we say, that's maybe what we meant, but that's not what it says. I'm just trying to say let's narrow that down if that's the way to go, but I wouldn't even say 12 million or 100 to leave that discretion because there may be some magic project the chamber can bring to us that might be 99 jobs and comes in at 10 million, but boy howdy, we want to be a part of it. And it would be a good thing if we could say there is demonstrable good in terms of triggering economic development.
>> I would be really interested in not mixing the two, and Commissioner Davis I heard you last week and I can understand your frustration. And I think it is something that needs to be addressed. And I'm just glad that members of the court, you know, we're hearing what you are trying to do. And I think we might do that later, but not mix the two projects together. The other thing I was really interested in because I know jobs, I mean we get calls that people are being laid off and they need jobs, whether they are temporary or permanent. And one of the interesting things was that the capital etro line would be closeby. And that gets people back and forth for jobs as well. And so at least that's going to be there to try to address the unemployment problem, which is a big problem and it's immediate and it's right with us today. So I would like to look at some positive bits. Let's not -- possibilities. Let's not drop the issue, Commissioner Davis, but let's be real specific. There are things that we cannot do as a county because of our size. And -- but I think we can find a good fit in the future.
>> okay. And I guess -- let me ask legal this. By define unincorporated area and looking at -- you know, we're looking at things economically disadvantaged, and of course I guess there's pockets of that all throughout the county, but I do know that as far as the stuff i've been able to review that has shown a tremendous need and -- for job creation. And I just think the government ought to be a part of. We're in a tough economic bind here, but I think we can work our way out of it. I think these creative ways of working a bind is one of the ways to go. I wanted to keep them both basically separate because of the fact that when you talk about unincorporated area and we talk about economically disadvantaged, and we still talk about -- and it is performance based, Commissioner, per se, because it's what we're looking at here across the board is the [inaudible] type of incentives. And of course this is. And I like to stick to this and I think it's pretty specific because the specificity in this does talk about the -- an area economically -- and which we define this is an area that's economically disadvantaged, and it does talk about the number of jobs that can be obtained, 100, and it does refer to the capital investment, which is a minimum of $12 million. As the policy that we have in place now does the same thing. It's the same specificity we are looking at today. The existing policy does this. It looks at the amount of the capital investment, which is over $100 million or more. It also looks at the number of jobs created which is a minimum of 750. And so those are specificitys and it's a performance-based type of proposal. So this is basically meeting and saying the similar things as the existing policy is saying right now. It's no -- it's no change. It's just amending to ensure that we encompass or grab ahold of these small businesses that want to locate in an unincorporated area of Travis County to provide jobs. Which I think we need to do -- we need to take care of that business, as far as I'm concerned, as far as providing jobs and creating jobs. This is what it's about, to work our way out of there.
>> let me know if this is legal. Court, let me know what you think about this language. A provision that says the Commissioners court may consider projects with a smaller capital investment and creates less jobs to stimulate economic development in areas that are or have been economically disadvantaged. Now --
>> that's an amendment?
>> unincorporated?
>> just areas that are economically disadvantaged. So this would pick up Travis County basically. Incorporated areas but unincorporated areas. Right now the way the policy is, in my view, if you come in at 99 million, you are short of 100 million.
>> yes, sir.
>> there may well be a project that is $9 million that creates enough jobs that we think is sufficient and that we think we ought to be supportive. In my view, this language would get us there and it forces us to focus on the project and it will stimulate economics development in Travis County and the project be in an area that is or has been or we can say and has been economically disadvantaged. I think this gives a lot more flexibility than a specific smaller amount.
>> and I don't disagree with that, judge. See, last week when I brought this before the Commissioners court, I kind of run into a little problem of not having all the pertinent information that was deemed necessary, I think, that wasn't made available to me. I did indicate specific zone or something like that at one time, which really was kind of out of the realm of things. But the intent of the language is basically still the same. That we are trying to ensure that we address growth. We are also trying to address job creation. We are also trying to address economic development. Now -- because last week I think I had specifically precinct 1 and 4 in this, of course, in the language last week, and of course that was kind of specific. So we just kind of said economic, you know, bypassed that and took out precinct 1 and 4 and said, look, we'll just look at the economic I did disadvantaged -- economically disadvantaged areas as defined by the court. I think that language is something we can -- I would like to support because it does accomplish the same things that I'm trying to get to. And it would be a project as far as cases coming before the Commissioners court, which then of course would encompass all of Travis County. Now, let me ask you again as far as the -- you mentioned one thing about the money aspect. Of course, we're not talking about $12 million anymore, but we are talking about job creation, and are we still talking about the performance-based stuff because I think performance base springfield what's driving me on those other things as far as making sure they happen. We're all talking about performance based.
>> so judge, my understanding by using the language that you have, and I think that's a very good suggestion, that we're not talking about designating areas and therefore we don't trigger any kind of conflict with the commercial industrial development zones which we're not allowed to do, with county zones which we're not allowed to do, knocks out the municipality because that's all things i've heard from other small business folk that if we get around this thing, that would also include projects within the city of Austin if it's something that's in historically underutilized and it would not cut out the small things happening. But like I said, if there was a message I got from the chamber, it's there's nothing magic about these numbers in terms of 100 million or 12 million, 99 jobs or 999 jobs. If it's the right project, we want to have the discretion to participate or not.
>> judge, could you read that language again, please, if you don't mind?
>> okay. The Commissioners court may consider projects -- I say with, but really that has -- the language I had before was with a smaller capitol investment and creates less jobs to stimulate economic development in areas that are or have been economically disadvantaged. This [inaudible] Travis County. We have to determine the project would stimulate economic development in areas that have been economic disadvantage. And I guess my other question is whether we think we can do this legally or do you need a little more time to look at it? .
>> I think the basic premise is as long as it is to stimulate economic activity, the statute itself doesn't give requirements, and it says that the court can create programs. So the content of those programs pretty much is left up to the desires of the Commissioners court. I would like to take another week and be sure on the economic -- the incorporated versus unincorporated areas, be sure we're not stepping on anything in including the entire Travis County. Since the initial proposal was just unincorporated areas and we want to expand that, I want to be sure we're okay on that. I don't think we have a problem.
>> are or have been economically disadvantaged.
>> right. And my other question is do you want to include any criteria on that or is that just something the court is going to determine on a case-by-case basis from the applicant's information? And that might be something we mightment to take a week -- might want to take a week to look at and see if we want specific terms.
>> we do have representatives here from the chamber of commerce. Would you all like to come forward and --
>> and others. Mr. Rogers is here as well.
>> mr. Rogers here on the policy?
>> yes, sir.
>> good morning.
>> good morning.
>> good morning.
>> [inaudible] greater Austin chamber of commerce. Susan davenport is here and i'll let her start.
>> I'm the director of economic development for the greater Austin chamber and I'm here on behalf of mike rollins, our president, who is unable to be here and I want to read to you the letter he has drafted in relation to what you are discussing this morning. Judge Biscoe and Commissioners, the intents of this letter is to share with you brief comments on the proposed economic development policy to be considered August 12th under agenda item 31. While the chamber is pleased that the court is considering an economic development policy, our board has not taken an official position on the details of the proposed policy. We would, however, like to emphasize a few key points that we believe will assist knew developing the most effective policy for state of Texas. First, -- central Texas. First, the chamber believes strongly government at all levels has an important role to play in economic development by encouraging creation of new jobs, wealth and tax base in central Texas. It's important to note that the typical business that will relocate to our area will most likely employ between 50 and 300 individuals. With varying degrees of capital investments. It will be important for any policy to remain flexible in evaluating the potential for incentives for relocating companies. Setting a threshold of 750 employees and $100 million in investments may limit the region's ability to recruit valuable projects that will produce significant spinoff jobs and seed new industry sectors. An example would be a business supporting 200 quality traded sector jobs with a capital investment in the $10 million range or possibly even less than produces significant new regional wealth and creates the need for additional jobs in related industry sectors. Equally important to the tax base of central Texas is the retention of our current industry base. We believe -- we encourage the court to emphasize retention and expansion investments in any policy adopted. The simple truth exists that it's significantly easier to retain jobs in the community than to attract them. For example, encouraging a semiconductor company to reinvest in local aging facilities and retrain its Austin-based workforce would be worth an investment, thus saving valuable jobs and a portion of the current tax base. Finally we encourage the court to emphasize the creation of traded sector jobs. Those jobs that bring new wealth to the economy by selling goods and services outside the region and overall create a need for additional non-traded sector jobs locally. The value of these jobs is significant in helping grow the region's overall wealth and deserve attention in any policy being considered. Overall the chamber believes strongly that any policy adopted should remain flexible in regards to various types and levels of incentives for industry recruitment and retention. We believe there are three criteria that can be helpful to the court in identifying the most advantageous projects for the region. First, wealth creation. Does the business bring new wealth to the community by selling goods and services to customers outside the local market. Basically traded sector businesses. Or does it redistribute local wealth, non-traded sector businesses. The multiplier effect. Will this business infuse additional wealth into the community by increasing the need for local services and increased philanthropy. Example would be a company headwastewaterers. Finally, regional economic diversification, will this spreu spawn new industries and diversification in the economy. We hope the court will not limit itself to the proposed policy as its own economic development tool but look at a myriad of methods and ideas to recruit and retain businesses to this region. In gauging a policy of flexibility when considering the direct and indirect benefits of a project can allow the court to respond effectively to opportunities that produce sound economic growth for central Texas. Thank you for considering these comments. The chamber staff and membership look forward to working with you. Sincerely, mike rollins, president of the greater Austin chamber.
>> thank you.
>> thank you.
>> questions? Comments?
>> two questions. In terms of this kind of new approach that we were talking about here, does this seem consistent with what you guys have put in in letter in terpbls of not having to consider projects of a lesser number if we think it will do good things?
>> Commissioner, as you indicated, there is no magic number. And there is no magic formula. And the key really is flexibility and the ability to consider these projects on a case-by-case basis. Moving forward in that direction is definitely in line with what we've laid out here. As the letter indicates, the chamber doesn't have a specific recommended policy. This is it should be q, y and z. That would take a significant amount of time to develop and bring before you. From what you have discussed, it does sound similar to what we have laid out here in this letter.
>> anybody else? On this item. Last opportunity.
>> thank you.
>> thank you.
>> thank you for the letter. Thank you for your support.
>> good morning, my name is brian rogers. I'm here as a commercial real estate investors, merchant and citizen against public pullly of the -- policy under consideration today. I don't have anything against this particular developer. If it was melvin simon group I would still be here.
>> is this on the economic development policy?
>> well, sir, it is, because I have a petition that I got signed from 43 merchants off south lamar, south congress and over on east seizer chavez. It says we the undersigned merchants of Travis County demand the Commissioners court reject the request for property tax incentives for the domain. Furthermore we respectfully demand the mayor and city council of Austin ... For the demain. So the question -- their project is inexplicably tied to the policy itself. It's hard for me not to talk about one and not the other. They are like the first person in the chute so they are going to get hammered if most. I have a store, my girl friend and I started a store on south lamar last September. I had no idea how hard retailers work every day. So when I heard about the incentives, obviously it starred burning me up and I took it upon me to circulate this petition. And, you know, I spoke with the gentleman who owns the bakery, and he expressed to me what a difficult time he had building his north burnet road location. And that the last thing that -- that he had to spend more money out of his own pocket, all right? He has to make an official decision that if I'm going to build or not to build, I have to put more earnest money down, more downpayment. He feels the developer should also if it's a build, no build decision, they either have to put more money down or wait. It's not fair to subsidize our competition. If a co-ed leaves u.t. And says I'm going to go shopping, does she decide to investigate all the independent stores on south lamar and congress or get on mopac and goes north. If she goes north, we have to spend more advertising dollars to convince her to come back south and see what the local merchants have to offer. Are we going to have to work an extra hour a week in order to overcome just to stay even. There's a sense of justice that is -- that it's not fair that you play favorites in this market. Another people have said we need more shoppers with more money. We don't need more stores. We spend our money locally. For example, if my store needs advertising, i'll stopped at the design shop on south lamar and spend my advertising dollars there. If I needed a sign, i'll call victor at sun signs. A new display case, i'll call j. C. Littledog. Accounting is done locally. Chain stores take profits and put them back in the economy. I spoke with francis of the florist on east seizer chavez. She's been there 40 years. She says we don't need any more jobs for maids and janitors. Entry level janitors and maids earn more than entry level retail. The Texas workforce commission weighs the information network reports for the Austin, san marcos, msa, and I have copies of this i'll give to each one of you, that there's 117,000 people employed in the retail trade with a mean wage, which is the acknowledge of $22,000 a year. A median wage of 18,250. A 75th percentile of 23, 970. What that tells is is of the 11 employees. 825 will make from $13,000 to $23,000 per year. Okay, but the developer stated the average annual compensation is in the neighborhood of 35,000 a year. A value 56% higher than the twc staff. And that 50% or more would receive full medical benefits. Well, the county should insert these developer representations into did guidelines. The county should also consider giving credit only for jobs above poverty line. For a family of four. Not giving credit to developers own employees. And what about new jobs? What if the developer takes banana republic out of high land mall and moves them over to their new center? Are those new jobs or just relocated jobs? So if you are really concerned about jobs, let's have them pay a decent wage before we subsidize taxpayer money and let's make them tr uly new jobs, not relocated from other centers. And I would like to give you this other piece of paper because the profit to the developer -- may I approach and give these --
>> sure. Give all of them to the person on the end down there.
>> and she will pass them down.
>> if you look at the page, it's called domain backup number 5 and it's from the city of Austin website. At first will you see the -- the developer stated that their project value is $158 million. The project cost is also -- is $130 million. So their profit before incentives, and these are their numbers, is $28 million. All right? If you add the city and county profits -- excuse me, incentive package in present dollars at 25 million, so now the developer profit is $52 million. I don't understand it. The county doesn't participate, the developer still makes a whopping $47 million. Now, they've made other -- on the city's website one of the questions asked that daryl slusher had asked, councilman slusher, was the difference in cost between new urbanist development and more standard strip mall or big box retail, and they said, well, it's $50 a square foot as opposed to $20. One of the reasons that they are asking for this incentive is this type of development is more costly. Well, yes, the interior finish may be $50 a square foot, but the rents they get are appreciate actively higher than a strip mall. Instead of being, I don't know, 18, 20, maybe they are 28 and 30. That argument they need extra money in order to over -- overreach some type of barrier, I think it's not really -- it's disingenuous. Now, the developers are rushing in to saturate the market as we speak. On July 10th, I spent 45 minutes in the city with -- in the office of sue edwards. She was the economic development staff person in charge of this project for the city. Trying to understand why the city gave away as much money as they did at the corner of mopac and breaker, already one of the most valuable locations in Austin. I pointed out that the incentives weren't needed since developers are already rushing in. Simon property announced they are 550,000. Gateway center, mark palmer said he was going to add another 300,000 square feet. Round Rock crossing land stage company straddled the county line, but another 300,000 square feet. Then parmer and i-35, david burn interest, another 27 acres of bill seton track. That all happened in June, and I asked her why were they giving incentives and she said the city had no way of knowing. The implications the city had known then they would not have granted the incentives. She also said the domain was a pilot project and experiment and they were not granting additional incentives. But after this project will the county act without the city or will they act alone? Developers i've spoken to said that the simon project will push the domain way back. Simon's property, the largest mall developer in the world, will have all the connections, the gorilla in the market. They will build their project first. They will take the tenants. Only when they are finished and have satisfied their needs do the developers in town feel that this project will then be able to [inaudible]. So you look five years out and that's when you may see this project come on completion. So that's not an economic policy that gives this benefit any time soon. Then you look at the actual 20-year window. See, at five years to be on completion, then another 20 years, you've got a 25-year window that you are looking forward. Look back in 1978. That's 25 years. How many booms and busts have we been through? Well, a good two. The city couldn't project one month ahead as to what's coming online, and I don't see how public policy that you guys have any better kris kal ball than the rest of us. I think the market needs to decide these things and the government entities need to stay out of this business. There's a risk of overbuilding the market. Today's healthy niche is tomorrow's overbuilt market. The developers tend to build until a market collapses. And in this case, the only thing that hasn't collapsed is the retail market. Now they are building into the retail market. It will be oversaturated and the values will drop. And once the values start dropping, then your tax collections from property taxes will also decrease. If gateway center, which is across the street, it's 500,000 square feet. If it's net rents drop five bucks, you've lost probably $31 million in taxable value. It doesn't take much for the -- for what you think you are getting in tax gains to be washed away by a dip in the market. Those are the unintended consequences. Now, you are giving incentives for apartments. Vacancy in the apartment market is very high. I just don't think the city should panic over its budget woes. You can't perceive the future. You have to make credible steps, but this type of incentive package is not needed. At this location.
>> let me ask you this question.
>> yes, sir.
>> let's assume right now we receive in tax revenue about $30,000 annually.
>> yes, sir.
>> from the tract of land that the project would be built on. And let's assume that even after the incentives, tax revenue to the county is 10 or 12 times that. Even after the incentives.
>> correct.
>> I mean do you think it would be a good financial deal for Travis County taxpayers?
>> certainly in a vacuum it would. But if these gentlemen take tenants from other centers, then -- but, you know, you have traded a vacancy in another center. The owner of let's say gateway, for instance, says oh, my gosh, they are coming to steal r.i.e. What do I do? Well, I need to negotiate harder with r.i.e. And so I'm going to have to lower my rents to retain my tenants. They lower the rents and then they come to tcad and say I had to lower my rents. My evaluation has dropped. Now, that happens naturally in the market forces. But when you are playing favorites, now you've trofrped up one project. They can ask to sustain a lower break-even point than people having to spend money out of their own pocket. It sounds like a good deal, but I don't think the county understands what nobody does, the unintended consequences.
>>
>> [one moment, please, for change in captioners]
>>
>> not just in rail, but multi-family, downtown area, the numbers got a little far out there. The correction was made not just in that sector, not just in that road district. It's everywhere. It got out of hand. So it's been corrected downward. But is there still more space? Is there still more opportunity? Not only at this site, but at gateway and the site that -- that the university of Texas is doing and the triangle, hill country galleria, la frontera, there's still a lot of [indiscernible] there.
>> I agree. I think there's -- I think it would make a great project. I hope they build it. I hope everybody makes a lot of money. But don't use tax incentives. I mean, don't ask the taxpayer to participate through, you know, abated property taxes.
>> do you find -- do you make any kind of differentiation between a performance based incentive and just a flat outbreak. On a tax abatement as you just nexted, what we used to have on samsung, but the -- we do have but the policy expired. It didn't matter what happened, they were getting their 40% break. They had to earn a bonus on top of that based on some performance based hiring measures. Of hiring certain folks and going through certain kinds of training to get them into the workforce. But it was like if they exist, they got the 40%. This one is not that. If they don't perform, they get zero. Unlike intel, there is no money up front that is being fronted to this particular applicant, at least from the county's side of things. If they don't deliver, they get nothing.
>> well, if these were manufacturing jobs, I would say, you know, put the incentives out there. This is glorified shopping center. It's nothing more than that, that the jobs are barely poverty wage. I think the county and city are desperate for revenue, this looks like, you know, a source, but -- but it doesn't -- it doesn't -- I think if you were to pick up the phone right now and call any developer in town or banker, I bring this to up to my banker, I started laughing. One word that I hear from the community about what the city did is stupid. I think if you -- if you call the developers and you call bankers and say, what do you think about this incentive -- these incentives to retail centers, I think that I will be vindicate and -- in what I'm saying.
>> this gives me a flung for another one of my favorite Austin newspapers, that is the Austin chronicle. They have been quite insistent about talking about where the city of Austin's situation with the domain fell short in terms of how do you monitor this. How do you know that you have got those performance based things and you fall through on it. We have been quite cautious and talked about it a lot about ours is not the same agreement. We have -- we have start dates that are different, we have other measurements in terms of when are you going to finish. Ours does, we have different kinds of things, we have a form that we have of that we have attached to the end of ours that says this is the information that you must provide to us to avoid a situation that we had on samsung. And should have the form approved up front so we wouldn't have had that difficulty trying to gather the information. We have been very specific about this is the information that we need and therefore they have to put that in their leases that they need to collect that information about the number of employees, each -- it shifts it to the applicant if you want public dollars rebated back, there are some requirements. Those are the kinds of things that have been pointed out as the -- where they fell a little short perhaps or we would have done it differently if it were here. Ours is a much, much lower number. We are trying to license to -- to listen to those kinds of -- of I think -- constructive criticisms of how are you going to monitor this over 20 years, what are the performance measures, what are the beverage benchmarks, no one wants to create an intel there. Was money up front, it never happened, there was no completion date, it never happened. Now it's getting replaced by a non-taxable entity that's not going to put property tax base on that site, although they will tell us it's spinoff because all of those folks have to eat. There's other things that they will do within that area. I guess this is just -- it's a best effort. I will also tell you that it is something that has an expiration date, which I felt very strongly about. This is not an open ended policy. It's for two years. Again it is intended to trigger because I wish it were that these things just instantly popped up and I think that -- that a good amount of attention can be put into how long it takes to get through the city of Austin process. I think that's where a lot of your difficulties are is trying to get permits out of the city, I applaud the city manager for trying to cut the time. But you want to know what could move things along is to get a process where you can move things along. Get permission to do those renovations, do those expansions. But you have got to have things to trigger to get things in the pipeline and this is the time to be triggering. And I'm hopeful that -- that when the two years is up, this is a policy that perhaps is not necessary because we got -- we have gotten through this set of difficulties. I unfortunately don't think two years is going to be enough. I wish it were. But we have all got to do what we have got to do, this is performance based, it is also project by project and I'm pleased that we seem to be landing on projects that -- that are of a lesser amount and a lesser number of jobs that may also get us a good ending result which would not exclude things within the city of Austin, we hope, if marietta does the legal research. So I -- I think that's a good thing that we are not -- we are not eliminating anybody from coming forward with something that might be something good that we want to be a part of.
>> let me say this to you, also. Really, [indiscernible] brought up good points, I thank you for those points. But let me tell you about -- let me just -- you do [indiscernible] already. I'm not saying you don't. But when you are going to -- [indiscernible] been laid off, unemployment double digits, everything else is going great around here, double digits in my precinct a lot of them, that -- that disturns you a lot -- disturbances you a lot, you say what in the heck can I do about it. This in my opinion is one way to address -- sometimes you have to do things out of the box, you have to think out of the box. That's why I brought up to the public economic disadvantage. How can we monitor to make sure those persons with economic disadvantages, the employer hired them based on the economics, job, stuff like that. This is one of the criteria that we are looking at. We do need -- [indiscernible] I do think that sometimes government have to get involved to bring us out of a -- of an economic downturn. We can't all depend on the federal government. Sometimes we have got to do things locally to [indiscernible] I have no problem with looking at this [indiscernible] because of the need, in my opinion, that we need the job. We need to create some jobs in my community. And I'm going to do that because the folks continually said they need work. And if I can do -- do the things by offering some type of incentive, performance based again, that's very critical, performance based. Even -- you don't perform it, you don't get it. That doesn't bother me at all to go in that direction. [multiple voices] my point to you is that I need to relief and bring some relief as much as possible to some folks that desperately have been economically deprived in a lot of areas for a lot of years. Reduce the unemployment situation that's been significantly higher for a lot of years. To talk around the community and see these things on a day-to-day basis is very, very [indiscernible] I -- I intend to try to do something about it on an economic development standpoint as far as what I can do to help alleviate my community as far as some of the problems that they have out there with unemployment in the -- in the median family income situation which is very real. [indiscernible] very critical. Those are the things that I'm trying to do. Again, I appreciate your concern and they are legitimate, mine are, too. The people in my precinct that I represent are legitimate. I think that we need to do it as a government as far as helping the economy if we possibly can, performance based again, performance based, that things -- these things are happening.
>> I think it's also fair to say that I have been here 8 years, the judge has heard this lecture, I'm sorry, judge, I will say it one more time, I think that it is fair to say to a large degree that a county is not a player on economic development. Some of that is because we just didn't go there. Some of it is because we didn't have the tools over at the state legislature for us to be able to get involved in these types of things. I have now made trips with the chamber of commerce to denver and to washington d.c. On a number of years, through my involvement with downtown Austin alliance going to the annual meetings of the international downtown association, we have met now in pittsburgh, new orleans, and memphis. And you begin to see what's happening in other places and I'm amazed that when you go there, it is a natural for the counties working with their chambers and their equivalent to a daa, working with their cities in -- their county is putting forward with -- for example, in terms of stimulating things downtown. Extraordinarily modest in terms of what the private sector is being asked to do, what the equivalent of their capital metro is being asked to do. The equivalent of their downtown alliance is being asked to do. But they are a player. I see this as being a very modest effort that says that when -- when susan and sandy and mike rollins are going to visit with the potential headquarters, that they might have a policy that says, you know what? The county will be flexible. The county is interested in hearing what this project might do, as opposed to right now they can say, well, nothing really happening with the county. Or in the way that we have it right now. The big players, 100 million or more, which could be this particular project or it may be a fab being offered by samsung or one of the other big semiconductor plants. You know, we are trying to basically be flexible here. Again I think this is an extraordinarily modest effort in terms of the kinds of incentives that we are talking about. Again, performance based after the fact. If you don't deliver, there's not one dime that goes out of the county coffers and as the judge said, it is to tenfold or 20 fold the property taxes but right now we are basically getting peanuts out of this property. But if they don't deliver, there's not one dime that leaves Travis County in terms of the --
>> the profit numbers that -- that they put forth -- they're easy to reverse engineer or they really don't need the help. They certainly don't need the county's help. If they are sitting at 47 million at this point. The build decision would probably still be a go. If do you me one favor and put in the jobs, jobs have to be above the poverty line, that's the only decent thing to do, to make them new jobs. They can't be relocated from other parts of the city. If what if a company comes in, says I'm going to buy this company, now look i've just grown. You would laugh. That's ridiculous. Buy into the company, by moving somebody, you are playing a shell game, not a new job. I don't have much else to say.
>> thank you.
>> thank you.
>> thank you for the information that you have. Thanks for the petition. Do you know how many people the businesses on lamar, congress and cesar chavez hired?
>> no, I don't. Are -- and our small store we have three full-time and in the high season we have six, but we are at 2,000 feet.
>> are they all above poverty level?
>> we pay $10 an hour.
>> is that true for everybody?
>> certainly. You know, it goes with each employer. Speaking of -- a high end boutique doesn't necessarily -- that sells, you know, $1,200 dresses may still only pay 7 bucks an hour.
>> so you think the hourly rate ought to be a minimum of how much?
>> well, I think the poverty rate for a family of four is around 18 something. So -- so I think that should be the -- the start -- the starting wage for any job that taxpayers are -- are asked to support.
>> the federal --
>> they are supporting Travis County and the city of Austin government and I can guarantee you the minimum wage for a Travis County government job isn't $18 an hour.
>> now, 18,000 a year.
>> well, it's not -- well, that's different.
>> that's federal. [multiple voices]
>> there's affordability rate for Travis County versus what are the legal requirements and what we have done, what is it $9 an hour judge is our minimum here. Seems like you ought not to require anybody something that you are not willing to pay your own folks.
>> by t.w.c. Entry level retail, especially food services about 650 an hour. These -- 6.50 an hour, these people won't have medical care, you will see them over at brackenridge.
>> I agree with you. I think it ought to be not below poverty level. Please be assured that we ask for that information.
>> thank you very much.
>> anything further on the -- on the policy?
>> [indiscernible]
>> I guess [indiscernible] I would like to see [indiscernible] [papers shuffling - audio interference] [indiscernible]
>> absolutely. It will go out to everybody. Thanks, I appreciate that. Thank you. Thank you.
>> anything else on item no. 31 today?
>> no, judge, that's about it.
Last Modified: Wednesday, August 13, 2003 7:52 AM