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Council says “yes” to Facebook and Yingli

Friday, March 12, 2010 by Josh Rosenblatt

As expected, the City Council enthusiastically approved two major economic agreements Thursday, paving the way for two 21st Century companies to locate in Austin.

 

The first item concerned an economic development proposal with the social-media giant Facebook. Under the terms of that proposal, Facebook will locate a sales and operations office in Austin, make $2.25 million in leasehold improvements, $900,000 in machinery and equipment purchases, and create at least 200 jobs.

 

According to staff estimates, Facebook will bring in a net benefit of about $312,000 to the city over a 10-year period,

 

Support for the incentives package was overwhelming, with members of several different city chambers of commerce speaking in favor and no one speaking against. Andy Martinez, president of the Greater Austin Hispanic Chamber of Commerce, seemed to sum up the feelings of the business community, calling the proposal “a great fit.”

 

Tim Crowley, chair of 2010 Opportunity Austin agreed, saying, “Continuing to bring companies like (Facebook) to this area will ensure that we are at the very pinnacle of the metropolitan areas of this country as it pertains to economic development.”

 

Mayor Lee Leffingwell, one of the strongest supporters of the plan, was obviously confident that the motion would pass, telling the audience even before Council had voted, “We’re very proud to have Facebook coming to join us here in Austin. Kudos and welcome to you.”

 

Leffingwell has said that one of his aides, Matt Curtis, personally worked on the Facebook deal, taking company representatives around Austin to show them suitable locations. When Council voted 6-0 in favor (with Council Member Spelman off the dais), Leffingwell pumped his fists and said, “Congratulations. Bravo.”

 

Council also voted to approve an incentives package for Chinese solar panel manufacturer Yingli Green Energy Americas, Inc., which is looking to establish a North American headquarters. Yingli has yet to choose between Austin and Phoenix for its operations, but should the company accept the city’s offer, the plan Council approved would provide $354,561 in development grants over 10 years for a project that would include a solar panel assembly plant and create about 300 jobs. The company is expected to invest nearly $20 million in property and improvements.

 

According to staff, Yingli is projected to make the city more than $900,000.

 

Although Council voted unanimously in favor of the plan, 7-0 (with Spelman back on the dais), unlike with the Facebook plan, the Yingli incentives package didn’t come without dissent.

 

That dissent came from the Austin Interfaith Council, which showed up as a bloc to protest Yingli’s proposed wage structure. Yingli has indicated that its average entry-level wage will be $13.25, a number far below Austin Interfaith’s determination of a living wage: $18. 

 

Shrugging off the enthusiasm of the solar and green business community at the meeting, Austin Interfaith’s Pastor Fred Krebs told the Council, “We want companies to come to Austin. … But we cannot support an incentives package to a company that is receiving over six million of our tax dollars in city, state, and federal subsidies and yet will not commit to pay” its employees a living wage. The current deal, he said, “means that employees could be paid subsidized wages by taxpayers while also receiving public assistance from taxpayers.”

 

A family of four, he said, earning $13.25 an hour, or $27,560 a year, would qualify for food stamps.

 

Council Member Laura Morrison said that though she appreciated the group’s fears over the living wage issue, she said her concerns were mitigated by Yingli’s promises of providing opportunities for upward mobility within the company, including tuition-reimbursement plans, which will be available to all employees, and corporate training policies and career-advancement plans. 

 

“There will be opportunities for growth in the company across all skill levels,” Robert Patrina, managing director of Yiingli Green Energy Americas, told the Council.

 

Council Member Randi Shade took issue with what she sees as Austin Interfaith’s “specificity” when it comes to defining what a “living wage” is. She told the group that they shouldn’t let their particular ideas keep the city from engaging in a package that could benefit the city’s workers. “The idea is that this will be a home for the company,” she said, “so that there will be future jobs. The term ‘entry level’ is significant because they’ve talked about the education path, the fact that they will have full health benefits.”

 

Yingli has until March 15 to decide where it will be locating its headquarters.

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