Travis County Commissioners Court
June 7, 2005
Item 39
Item 39 is to consider and take appropriate action on request from free scale semiconductor, inc. For economic incentives, and we have had numerous discussions about this item we have free scale representatives here with us today, one of them, and I see an eager-looking mr. Harris there, may want to just, you or somebody else, summarize the request or proposal.
>> thank you, judge, Commissioners, good morning, my name is jerry harris. I知 here with john holmes from free scale, and other members of the community including the chamber here interested in the free scale matter. Pleased to appear before you this morning and represent free scale in its request for economic incentives based on commitments -- significant commitments that free scale is willing to make. The first commitment is that free scale is willing to commit to have its global headquarters located here for the ten year incentive period that's covered by this particular request. That is a very significant request and lots of the other commitments follow really based on that commitment. That commitment involves the retention of 600 free scale employees, headquarters employees located here. Secondly, free scale is committing to create 500 additional semiconductor-related jobs within the ten year in city period. Those 500 jobs will be net to Travis County. And I want to emphasize that, that those will be net to Travis County. 200 of those 500 --
>> let me stop right there. Hold on one second, those jobs, and I think it's very, very important for some time in some stage, and I hope those jobs are related to, you know, a lot of Travis County residents and stuff like that, but I want to make sure that the employment of these particular persons and I can go into that later, but I want to make sure that we have the opportunities available to -- to the folks in this community and I know you mentioned jobs, but I want to make sure when we come down to those kind of things, that -- that that is actually the case, so i'm-- oh I知 hearing you, but I wanted to stop there and pause for a minute with...
>> sure, Commissioner Davis.
>> I知 very concerned about that.
>> your concern is that all residents of Travis County, what area of the county, have opportunity to compete for the jobs.
>> okay.
>> okay.
>> I知 real -- be pleased to visit with you about that in the future.
>> okay. Thank you.
>> in relation to those 500 net jobs to Travis County over the period, the commitment is also to have 200 of those jobs filled and added by April 7th 2009. Third, free scale is committing to invest an additional $525 million in new equipment and machinery to be located in Travis County. And I want to emphasize again that that expenditure will occur in Travis County. The direct and indirect benefits of free scale's commitment has been highlighted and addressed in a report prepared by the perryman group dated may 5th, which we have delivered to the county and a cope to each of you. It shows that the very significant significant multiplier effects on the economy by these commitments that are being entered into by free scale free scale's request, as an incentive, is for a ten- year tax abatement agreement with a tax abatement level of 80%. This means that free scale will continue paying taxes on its current existing investment and will also pay 20% of the taxes otherwise be due on its new investment. We hope that everyone who has worked on this recognizes the significance as an economic matter of these commitments made on behalf of free scale. Free scale is very appreciative of the work that's been done by everyone on this effort to help it come to the conclusions regarding its commitments, its global headquarters location and these other very significant economic commitments that is being made on its behalf.
>> i'll be glad to answer any questions you might have about the request or about free scale, and we appreciate your time very much this morning.
>> just clarification. You use the word [inaudible] , but what we're talking about is a performance-based contract if free scale followed through on its commitment to Travis County related to investment and the employment goals and everything else that is associated with what you've laid out, there will be a rebate back to the company and the net effect will be that there is a -- an 80% reduction on the taxes that would be owed barring this agreement, is that correct?
>> yes, Commissioner. The term "abatement" and "rebate" have been sort of used interchangeably and we were going to sort of trust you to make your choice.
>> the legal issues associated with that resulting from a decision by one of our district judges here in Travis County, we're sort of wrestling with that issue on another matter so at some point we'll have to wrestle with it I知 sure with free scale also, but any comments, questions, from any other member of the court?
>> I want to thank you for the perryman report, it was very helpful and provided some good information.
>> you're welcome.
>> thank you.
>> good. And I want to publicly thank the free scale folks in terms of dealing with my questions and issues and we're in a great place and I look forward to voting on this.
>> thank you very much.
>> Commissioner Davis? I was about to say where we are today is a little different than where we were several weeks ago, but I think it's a better win-win for all involved, and this is a major job creation effort and job retention for which we cannot overlook, plus the capital investment is enormous and so I think it will be best for all involved for years to come and hopefully at the end of the ten year period, either there will be a -- another project similar to this or even greater that will have an opportunity to consider.
>> we hope so also, judge.
>> judge?
>> yes, sir.
>> we also want to -- I mean for however many folks there are that watch channel 17, I知 always a little amazed --
>> my mother watches it.
>> kurt just raised his hand out there, we do want people to understand --
>> he never came over when he was mayor, by the way so... [laughter]
>> but we do want people to understand that the facilities that are here and they are paying taxes on, those facilities now and what we do as Travis County net with them being here is around, you know, the 2 million -- two and a half million dollars, so just wanted everybody to --
>> plus all of the employees who are here in this community.
>> and the overall big picture of economic development that we are experiencing here and the bottom line is that we're going to have to create some jobs. I mean that is the driving thrust of this economy is job-based, and --
>> could you just tell the folks where free scale is located so folks in the community that do get a chance to view this will actually know where you are?
>> sure, Commissioner t major facilities of free scale are the facility located on-- at oak hill near the y, 290 and 71, and at ed bluesteen in east Austin, those are where the two fabrication plants are located and those are the vast majority of free scale's assets here in Travis County.
>> right. And with that -- with the economic thrust that we are trying to bring these particular opportunities to the employment workforce that we have here in Travis County, applaud free scale for deciding to -- to retain its situation here in Travis County and of course be a part of the economic big picture of where we are trying to go as far as job retention, job creation and all of the other economic development-type of settings that we will have to thrust an move forward in the future for Travis County, so, again, I want to thank y'all very much.
>> thank you, Commissioner.
>> anything else from any free scale representative?
>> I would like to say thank you to all the counties.
>> thank you very much.
>> chamber of commerce? Including former mayor who is now chair.
>> yes, I appreciate the county, appreciate the vote you're getting ready to take.
>> the mayor speaks a whole lot less now that he's out of office.
>> [laughter]
>> not really. [laughter]
>> move approval.
>> second.
>> discussion? All in favor? That passes by unanimous vote, and so should we contact you when we start negotiating specific terms of the contract?
>> if you would, please.
>> okay.
>> just about implicit in the motion is that that basically authorizes us to move toward developing the appropriate contract whether it be performance-based contract or an abatement depending on what the court tells us is the best way to go.
>> talk about the employment opportunities later.
>> thank you.
>> we appreciate your patience also. We had planned to reach y'all about 10:30 this morning.
>> we thank you. No problem.
>> thank you.
>> goodbye.
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Last Modified:
Wednesday, June 8, 2005 7:12 AM