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Council contemplates incentive deals for Facebook and Yingli
Thursday, March 4, 2010 by Austin Monitor
Two companies that exemplify the kind of industries the city wants to attract are eyeing Austin for large expansions that would bring about 500 jobs and millions of investment dollars to the city.
On Wednesday, city staff briefed Council members on potential economic development packages to entice Facebook Inc., the behemoth social networking site, and Yingli Green Energy Americas Inc., a China-based solar panel manufacturer.
Yingli, one of the largest solar panel manufacturers in the world, is looking to establish a North American headquarters and has its eye on Austin and Phoenix. The company, which has already received a $4.5 million tax credit from the U.S. Department of Energy, is requesting $354,561 in city incentives over 10 years for a project that would include a solar panel assembly plant and employ about 300 people. The company is expected to invest nearly $20 million in property and improvements.
While the Facebook office seems almost inevitable at this point, the same canot be said for Yingli.
According to Brian Gildea, the city’s economic development manager, Yingli has until March 15 to decide where it will locate its U.S. operation. City Council plans to vote on incentive packages for both Yingli and Facebook at its March 11 meeting.
“I’m really excited to be in competition with Phoenix and I really hope we get this passed and beat Phoenix,” Council Member Randi Shade said. “We really want to be a leader in this industry and not be reliant on foreign fuel.”
Facebook has received a $1.4 million incentive from the Texas Enterprise Fund, but that is dependent on a corresponding $200,000 in incentives from the city over 10 years. The company’s expansion to Austin would be its first outside of Palo Alto, Calif., and would bring about 200 jobs to Austin within four years.
Council members could hardly contain their excitement, saying the projects will build on Austin’s reputation as a leader in alternative energy and online tech industries. “This is a great opportunity. We have been trying for years to lure this kind of thing to Austin,” said Mayor Lee Leffingwell. Council Member Laura Morrison echoed the sentiment: “It’s a terrific marriage with the vision that we have for our city.”
According to staff’s presentation on the incentive packages, the city will come out ahead on its investment if the companies come to Austin. Facebook will bring in a net benefit of about $312,000 over a 10-year period, and Yingli is projected to make the city more than $900,000.
Of the dozen or so public comments at Wednesday’s meeting, only one group had any criticism. The Austin Interfaith Council raised concerns over Yingli’s wages, saying the company had indicated its average entry-level wage would be $13.50 an hour — an amount the group deemed unacceptable. But this is an argument the group has been making since Hanger Orthopedic Group got the first incentive package under Austin’s new rules in January, and the complaint is expected to continue as other companies seek incentives to make Austin their home.
The city will be accepting written comments on the incentive packages through Sunday.
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