Travis County Commssioners Court
June 29, 2004
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 A2
...Thank you all for seeing us today. Here to talk to you about I think an incredibly exciting project for Travis County. My name is gary farmer. I知 president of the greater Austin economic development corporation and the chamber volunteer. As you said, judge, we are here to talk about a home depot project. Not a typical project, a very exciting project for this county and for the people that reside here. I want to thank you all on behalf of the chamber and on behalf of home depot for your consideration today. As I think you are away, we need to take this up in an expedited manner. We appreciate your willingness to consider that. I would like to talk a little bit about the project to make sure that we all are on the same page. Home depot is proposing to locate a data center in Austin and Travis County. This is the project that would invest over $400 million into our local economy. As background, home depot is the second largest retailer in the country. 13th largest company and the third largest retailer globally. In 2003 record sales totaled $64.8 billion. We believe the project home depot is proposing for our area is one of the more exciting opportunities we've seen in any number of years. Last week as you are probably away the city of Austin passed an incentive package for home depot that included the city's nomination of this project as an enterprise zone project allowing for some financial benefits from the state of Texas also. From our perspective, this designation is significant because home depot will agree to hire at least 35% of the jobs proposed for the project from the pool of economically disadvantaged residents. I think that's very significant. This provides opportunities for those most in need in our community. Home depot plans includes purchasing an unutilized industrial building east of i-35. That would be the site of their operation. To understand the benefit of this company to our region, you must understand their community commitment. A wonderful community citizen. They have an outstanding reputation as a model corporate citizen investing in a myriad of programs in the communities where they locate facilities. I would like to share some of those with you. Some great examples would include team depot, which represents 7 million volunteer hours each year by home depot employees. Kaboom, which built more than 150 employ grounds around the world. Habitat for humanity where they built more than 160 affordable homes. They have a program with the aarp. Partners in national hiring initiatives aimed at folks age 50 and greater. Project homefront, supporting our deployed troops and families while they are away serving this country. Olympics sponsorship. They hire, as I understand, over 200 of our olympic athletes in stores around the country, other programs, and they focus particularly on at-risk youth to make sure they have a safe place to learn life skills. They are on the president's council. Have been named a leader in civic participation by the president. And they are very involved in hands on atlanta where volunteers donate time to help rebuild local communities. So they have a tremendous commitment to civic and cultural activity. One of home depot's major criteria in making this site selection decision was our talented workforce. As we all know, we have far too many talented folks that are unemployed or underemployed. I think this represents a significant opportunity for them. And so with all of that, judge and Commissioners, I would like to say thank you for this consideration. We believe it's a very valuable project for this community to provide jobs and resources for the people that need it the most. So with that, we would entertain any questions that you might have.
>> I got a call from the hispanic chamber of commerce, you all have been visiting with them as well.
>> yes, ma'am.
>> okay.
>> we ought to have the two gentlemen introduced from home depot.
>> I知 jim fisher, vice president of operations for home depot and this is my project if we go forward wit and this is john trigi our counsel out of houston.
>> former Austinite.
>> you are never former. You are just relocated for the moment.
>> temporarily.
>> there you go.
>> I have a couple of questions. And I would like to direct it to the home depot representatives. I知 really excited about this project. I think it's -- local government's got to do what we got to do to help stimulate the economy. Number one, if the Commissioners court decides to approve the incentives for you to carry on, approximately how long would we know that you will come with the final decision as far as ballpark time frame?
>> understanding we're talking ballpark?
>> yeah, ballpark.
>> within a couple weeks.
>> within a couple weeks of today's decision.
>> yes.
>> number two is I represent precinct one as Commissioner, but of course we have pockets of economically disadvantaged residents here who reside in Travis County, but a lot of census tracts I know in precinct 1 have experienced double-digit unemployment for a long while and we do have significant number of economically disadvantaged persons that reside in my particular precinct. You mentioned that I guess of the 500 jobs I guess that you have available, made available, 35% of those particular jobs will be set aside for economically disadvantaged persons to be employed. I知 hearing this, but I guess if the court decides to go forward with this, I guess there will have to be some kind of contractual arrangements to make sure that's something that could be written in the type of language that we both can be satisfied with to make sure these things happen. And again, how would that outreach take place through the residents of Travis County to let the folks know that, listen, were willing to sit here, work with you and also employ you? So I知 kind of concerned about outreach especially to those folks that may be otherwise left out of the picture as I知 speaking basically for the economically disadvantaged residents of Travis County.
>> I don't think we have a firm answer today on -- how we'll do each bit and piece of that, but once we make a decision, then our human resources department will engage very quickly with the right people and they will put together a program to begin doing that. The state has offered us some assistance in helping to identify those people, pre-screen them, set up job fairs, things like that, so we're going to lean very heavily on that. The program escapes my mind that it was called but we would use that as well.
>> okay, so you use different venues I guess to --
>> yeah, the Texas workforce commission has proposed a package to us where they would set up job fairs, they would recruit people, pre-screen them to make sure they are qualified for the jobs we have and they would target these groups to hit our 35%.
>> you mentioned basically what we have is about 500 new employment opportunities here in Austin within Travis County. Can you basically tell me, will any of these particular jobs ever be exported to foreign interests? In other words, if you know there's been a trend of persons that corporations have kind of allowed jobs to leave the country, and of course with the hot market out there, will that be something that you may be venturing into in the future is that is something out of the realm of possibility or is this something that we need to consider? Outsourcing, in other words.
>> ever and never are a long time so I will tell you we have not done that to this point.
>> okay.
>> last year we actually looked at an outsourcing exercise. Not with an off-shore company, but with i.b.m. And in the end we opted not thaod even. Home depot is a do-it-yourself company so I can only tell you what we've done in the past and tell you there's not a plan to do that. But economics and things change so I can't guarantee you that, no.
>> that's something I really would like to watch because of the trend of outsourcing from our major employers, a lot of them are outsourcing a lot of things now and of course it is hurting the persons here that are looking and seeking for employment opportunities and want to continue to work.
>> certainly.
>> and I think that's a big concern for a lot of us.
>> yeah, again, forever is a long time so I can't tell what you the future will bring, but I can tell you we wouldn't -- if it was imminent, we wouldn't be looking at an investment with this kind of commitment. We just wouldn't do that.
>> my last question and I know my colleagues are just burning to ask some questions, but is there any possibility that there will be room for growth potential as far as your projected -- looking into the future, your projection as far as expanded growth in the area? We want companies of course to grow and expand and of course to continue to hire folks in the community, but also continue to provide a service as you do. Is there any forecast as far as growth? Right now we're talking about 500 employees [indiscernible] and also the equipment and things of that nature, but the overall expansion and growth potential, is something there that indicated that would let me know there is good possibility for you to expand other than the facility you are at now or either add on to the facilities to continue to hire persons out of this community?
>> I think the plan is always to grow and do better and historicry home depot has done that over the years. Our i.t. Department has grown commensurately with the home depot business growth and I hope that continues. Not long ago we announced another new presence in new braunfels for a call center so growth is on our behind. We have growth built into the footprint we're building, I can't tell you off the top of my head, but we want to add more people and as time goes on we assume that will happen and the facility will handle it.
>> and I would like to just say this and conclude my particular comments, I知 excited for you to be here. I would like to maybe get later with p.b.o. To find out what would the dollar amount as far as the 50% of real property taxes, how we maybe forego that for 10 years, what kind of impact that would be on us, but also the real property tax, 100% of that, how would that pan out financially. But I知 really looking forward if you decide to locate here in Austin, Texas, I really would like to let you know that as far as the outreach possibilities are there for the persons in this community, I would like to also be a part of that outreach because, again, we are trying our best to build up the economic basis to where persons can be not only from here but also create jobs for this community, and I think that's a big bottom line [indiscernible] and I know precinct 1 as far as hiring employment so I would like to let you know if you do decide to work here, you mentioned the state, I want you also to mention Travis County because I know precinct 1 is pushing for a economic development strategy to make sure we do bring the jobs to this precinct and also this county I think we justly deserve. Thank you for your attention and your answers.
>> thank you.
>> I have a few questions myself.
>> [inaudible].
>> first thing, could you please tell the folks at corporate that we haven't had this much rain in the month of June in 23 years and they should not be held against it because it is really out of the ordinary.
>> I知 from georgia and this isn't bad, so ... --
>> okay. I wanted to make sure they knew that. Since we have a contract in front of us, we wouldn't have to be asking some of these questions, but we want to make sure everybody has the same comfort level we have in terms of out there. Could you clarify in terms of the number of new hires versus how many folks might get transferred from your facility in atlanta? I think that would be good information for people to have.
>> the numbers we've been quoting, of 500 jobs, approximately 480 would be new.
>> so these truly are new hires within Travis County. Great. And it would be your understanding that this package from the city-county, school district, is non-transferable to any other corporate entity. This is the deal we have crafted four and you can't pass this on to anybody else.
>> yes.
>> this is your gig.
>> subject to your approval.
>> absolutely. And you know and understand that we are going to have to have a contract to basically validate everything that we're talking about here and that would include a process on how we process any kind of refunds. And the good thing is that with samsung, that was an abatement, not a refund, and what we did on domain, we've already got a lot of that stuff worked out related to what a form might look like and how to do the process so that we don't have to reinvent anything here so that will have to be laid down to validate any kind of numbers. And I want to make it real clear that my vote today, we don't have a contract in front of us, but I have every intention of voting for the contract so, you know, whatever kind of help that gives you related to that we do have to technically go through a vote on the contract, but I知 not changing my vote.
>> okay.
>> so whatever that does in terms of being helpful. And also, this is for a 10-year period. I think the city of Austin used 10 years commencing January 1st, 2006. Is that consistent with what you are asking the county as well?
>> > [inaudible].
>> I guess it's either 2005 or 6 to be negotiated into the contract.
>> not a problem. Whatever that is, it's a 10-year contract for whatever it is.
>> we understand that, yes.
>> well, please come. I look forward to you being here and this is a real positive proposal being placed before us. And I always like to say too that when I evaluate these things, I handle each particular case brought before me on an individual basis so this is not to say if it's somebody else coming before me it would be the same kind of deal. These are very specific deals for very specific reasons and it doesn't create any skaoeupbd of precedents in terms of any kind of votes. But i've been happy with every vote i've cast in 10 years that i've been here related to two tax abatements and one of these similar types of agreement and i've not been disappointed yet. Thanks.
>> thank you.
>> Commissioner Daugherty.
>> judge, I was reading the letter that you had written to mike rollings back June 17th, and I was interested in a comment, in addition, I知 elated to learn the workforce will grow to approximately 500 employees within 10 years. Do we start with 500 or do we grow to 500?
>> we anticipate being at 500 by the end of '05.
>> I think it's real important for people -- not that I知 convince add whole lot of people in this community watch channel 17 although I am always amazed at the number of people who do and I said you need to get a life. If you are watch -pg channel 17, I知 encouraged. But I do think that we need to make sure that everybody understands exactly what we have before us and we haven't done that here. With regards to the fact that we have a building that is vacated right now, the fact that that building is on the tax rolls presently for 12 million, that you all are apparently buying the building that will be taxed on a $29 million building, and that what you are asking is a 50% of the differential between what we presently are taxed or what we have out the tax rolls in and out for 12 million and 29, so for simple math, I mean you are 17 and a half million and you would like to have 50% of that 17 million, which is, you know, eight and a half million dollars, so we would immediately start with being able to tax this building if you all -- if we cut this deal with you all where we would take a $12 million up to a $20.5 million -- let me stop there because I can see eyes. Is that -- am I on the right --
>> we're with you so far.
>> and then in addition to that, we're also being asked to I guess rebate the amount of tkopls which will be -- dollars which will be somewhere in the range of $100 million of equipment.
>> no, it's in excess of that.
>> so it's in excess of $100 million. But all of that will be tax free for 10 years.
>> yes.
>> now, somebody may say, well, why would we do that. Given we don't have anything in there now so it's not like we're getting taxes on anything that's there, I just want people to clearly understand because I will tell you, folks, this kind of a deal is one of those things that people in the community no just enough to be dangerous and they take something and they extrapolate and they go in a direction and before you know it they are so far down the road telling six neighborhoods about guess what they did. So we really want people to understand that we are not giving anything away because, quite frankly, I mean I知 probably sure there will be some people a little amazed at this, but I think this sounds like a pretty good deal to me. I知 generally a hard sell on this kind of thing. But given that it's all new, that we are really, you know, encouraging something in a part of town where, you know, they are desperately, you know, wanting, you know, these kind of jobs, using a vacated building that we're getting only what we're getting off of a $12 million appraisal now, I understand that the average pay with home depot, if these folks -- if we do set this thing up will be somewhere in the neighborhood of 55,000 plus, plus benefits for the employee base which I think comes to around a $30 million employee, you know, base, which is great, you know, for this community. The thing that I particularly like about it is, if I知 not misunderstanding something, there is no business in town that does this so it's not like this business is competing with somebody that's already doing this. I mean which I think is a real plus. And the fact that it's performance based, the fact that it's a 10-year commitment only, I -- you know, I think that it -- you know, it looks to me like it's something we ought to take advantage of in the community. Hopefully we're not getting played against georgia, but, you know, I知 sure that we are. I mean gary and I had lunch and if I were home depoerbgs I would be playing georgia against Texas. As a matter of fact, I think we play georgia and we won. [laughter] so anyway, are there any of those statistical numbers that I was off on or that you think that we need to clarify for people that really want to know what this bill is? Always makes me nervous when the city attorney leaning over to talk to -- [inaudible] and I知 going tom, get over there and listen or --
>> he is just reassuring me, you are correct.
>> great. Well, thank you.
>> are we to make a decision today or are we waiting for the contract to come back?
>> I was hoping we would go ahead and get the green light to get the contract together and that would give us time to work together. But I think they want a green light. The other thing that I think it will take some time to do the contract, to the extent we can, we will probably follow the city's contract, but we govern by different laws and we have a different way of doing business so there will be some differences. Rather than a whole lot of did you happen phreu indication we should probably -- duplication, we should try to track their contract and use our own provisions to supplement theirs. But that way it would give us a little time to work it out. The other thing is they were looking at another location, in fact where they are right now already and what I put in my letter was basically real competitive with the situation there. But in order for you all to go ahead and make the final decision, you need for us to let you know it's green light from us except for the specific terms and conditions of the right. Right?
>> yes, your honor. Actually just to clarify things, we are asking you to vote the specific abatements that Commissioner Daugherty mentioned, and for the time period that Commissioner Daugherty and Commissioner Sonleitner mentioned. And subject to the county attorney working out the nuts and bolts of the contract with me, that was it. That's all we're asking for you all to do.
>> that would be performance measures in the contract.
>> that's our understanding. It's performance based. And because there's a interplay of different programs, including the enterprise program from the state of Texas to confirm the 35% disadvantaged employees, that's going to be part of our contract with the state of Texas as well. So we want to harm nice all the terms so they are consistent so we don't have different definitions for each one, including with the city.
>> so hoping we approve the project today conditioned upon a contract as soon as we can --
>> were they going to come meet with me?
>> I知 sorry, ma'am.
>> are you going to come meet with me about the project?
>> sure. Sure.
>> and I guess the performance measures then show the economic level of the people that we're targeting?
>> it should.
>> and where will that information come from?
>> Commissioner Gomez, if you went to the enterprise project website that the state maintains, there's a definition of economically disadvantaged that we're going to follow. So it's that definition that is consistently going to be followed with all of our contracts.
>> what is the website?
>> it's the Texas enterprise project. I believe it's under Texas economic development. And there's a -- there are various definitions that are there. It's in the statute as well. It's by statute what is an an economically disadvantaged person and that's what we're going to follow.
>> okay. And these employees will come from both the city of Austin and Travis County?
>> yes. There's a -- there's two different elements of being economically disadvantaged. There's whether you are located in, as Commissioner Davis was saying, an area of high unemployment that may qualify, and then alternatively if your financial situation is -- meets the certain criteria that the federal government sets out that the state has adopted as well. It's a little bit of a complicated formula, but basically it's meant to mean if you are economically disadvantaged, that's what qualifies under the statute.
>> but you can either be a city of Austin resident or a Travis County, outside of the city.
>> outside of the city as well. And there's a preference towards high unemployment census tracts.
>> right, exactly.
>> okay.
>> because when the state --
>> I understand, Commissioner.
>> established the enterprise zone concept, some of the things that they did look at and which we kind of looked at back then [indiscernible] especially [indiscernible] contracts, we looked at and wanted to make sure that the focus were in areas that did have high unemployment for unemployment possibilities to relieve the economically disadvantaged conditions of the residents whereby the enterprise zone would be located. And of course this is in an area that [indiscernible] census tract that do house a lot of economically disadvantaged. But guess all over Travis County, just not here, but the numbers just suggest a higher rate in certain census tracts- opposed to Travis County.
>> so we'll be identifying those census tracts.
>> I believe the site does that as well. It's part of the program. And so it's a great resource. I've done a number of enterprise project designations over the years and it's a great resource for that kind of information.
>> then i'll wait and look at all the information as it's being put together.
>> but it would be important for us to get the approval today for --
>> do you have a contract with the state of Texas?
>> well, the formal process that we have to go through first required the city of Austin to designate us as an enterprise project, and they not did that, they designated us as a triple jumbo. That requires that we make a guaranteed investment of at least $250 million. In addition to that, we're going to stro submit an application that will be vetted by the state and that will happen by superintendent 1 assuming we get the green light. But you all's decision today is critical for us to get that green light.
>> what kind of economic [indiscernible] is the state of Texas considering?
>> it's in the statute. The enterprise project, if you become a triple jumbo, there's a refund of state sales tax paid, just the state's portion, not the city or the county's portion, not the m.t.a.s portion, but the state's portion an incentive for you to hire economically disadvantaged folks. And if we reach the numbers that you've seen here, the most we could get back would be $3.75 million.
>> is the specific geographic area for the enterprise project designed by the state or city of Austin?
>> actually this is -- there's no zone. Ordinarily you needed to be located in an enterprise zone, but this project is going to be one of the first that's not located -- the law was changed last year to permit locations outside of an enterprise zone. So we won't be in the zone. The city of Austin has designated the site.
>> a specific geographic area?
>> yes, sir.
>> city of Austin has.
>> yes, sir.
>> that was in the ordinance that they adopted last week. And we're just asking the court to mirror that ordinance as best as it can.
>> move approval subject to an appropriate contract.
>> second that, judge.
>> and in my view, two members of the court ought to serve on the subcommittee to work with legal counsel to work with the -- look at the state and county contracts in putting ours together and to get those to home depot and the chamber expeditiously, which probably means 10 days to two weeks. What timetable is the city on?
>> I believe we said two to three weeks with them is what I remember.
>> I wouldn't mind looking at that.
>> change that to 17 days to three weeks. [laughter] seconded by Commissioner Davis. And with the terms and conditions that we discussed today. That are in the backup.
>> if I could get copies.
>> and judge, let me say this before we vote, and thank you for the comment that you brought, but when we get an opportunity as far as those census tracts that have high pockets of unemployment, double-digit unemployment, a lot of economically disadvantaged persons in those areas, they are not that far from where this particular site is located. So there is -- in fact, some are relatively very close. It's almost like maybe not in the zone, but they are still close to those pockets of high unemployment and economically disadvantaged persons throughout that precinct. So I just -- I just want to bring that to your attention.
>> any more discussion?
>> yes, I知 going to vote for this because I think it's a good investment for all of the taxpayers and the people in Travis County, but I would appreciate being kept in the loop in the future on any of these discussions.
>> speaking of being kept in the loop, would you like to work with me on the --
>> I would like that. Yes.
>> motion. Commissioner Gomez will serve on the subcommittee --
>> and have me as an interim when I can fill in because I definitely would like the make sure that the economic development scheme that we're proposing for precinct 1 continues in that direction as far as relieving and reducing high unemployment in those census tracts. I want to be kept in the know.
>> if it's all the same to you all, i'll stay clear of this thing and stay on top of that toll road plan. [laughter] which is going to help you all. Gary will probably second that.
>> stop conversation now and just lower our head.
>> be a part of that also, judge.
>> all in favor? That passes by unanimous vote. Thank you all very much.
>> thank you all.
>> thank you very much.
Last Modified: Thursday, July 1, 2004 11:47 AM