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Austin, Travis County weigh merits of incentives for HID hiring ‘locally’

Wednesday, September 26, 2012 by Michael Kanin

A spokesperson with the City of Austin’s Economic Growth and Redevelopment Services Office has confirmed a report that a pending economic development agreement with HID Global Corp. would allow the firm to hire residents from surrounding counties to fulfill a goal of hiring 90 percent of its employees locally.


Thus, the company would receive the economic incentives by hiring “local” employees from the five-county Austin region, despite the fact that the City of Austin and Travis County would be the only governmental entities to contribute the tax rebates that would bring the company to the region. Irvine, Calif.-based HID is considering a site in Northeast Austin, as well as a location in Memphis, Tenn., for a 200,000-square-foot operations plant that would generate 276 jobs.


On Tuesday, the Austin American-Statesman reported in an editorial that the hiring goals attached to the economic development agreement would apply to the “Austin Metropolitan Statistical Area (MSA), a five-county region made up of Travis, Williamson, Bastrop, Hays and Caldwell counties.”


This news came as members of both the Austin City Council and the Travis County Commissioners Court addressed the HID deal in separate meetings on Tuesday. County Commissioner Sarah Eckhardt continued to push for a minimum goal that HID hire 50 percent Travis County residents – among other concerns – while her peers at City Hall hinted that future Austin deliberations over economic incentives would not extend, as Council Member Mike Martinez put it, into the 11th hour.


HID Global is a manufacturer of secure identity products. Should all go according to plan, the company would construct a manufacturing and distribution center at 601 Center Ridge Drive in Austin that could supply a host of entry level positions targeted for hard-to-employ residents of the area. In addition to what would be a $920,000 “performance-based grant” from the City of Austin, and a $745,000 “economic development grant” from Travis County, the state government has agreed to provide $1.9 million in incentives.


At the Commissioners Court, Eckhardt tried to use a reported competing development agreement with the City of Pflugerville to illustrate that HID wants to move to Austin – a fact that she believes should negate the need for an incentives package to draw it here. She also continued her call for an at least half-Travis workforce – and one that would support low-income labor. Just before she headed to an executive session with her colleagues, Eckhardt sent a Twitter message: “Yes to HID only IF it hires 50% #TravCo and substantially from economically disadvantaged zips,” she wrote.


Just before commissioners broke for lunch, Eckhardt told In Fact Daily that she was still trying to get the details of the Pflugerville deal. “If – and I don’t know that this is the case – if Pflugerville offered a sweeter deal five miles to the north and HID rejected it because they want to be in Austin that bad, then it’s at least some evidence that there really isn’t competition for the site.”


HID officials did not divulge anything from the Pflugerville pitch during the open portion of the commissioners’ meeting.


Meanwhile, a few blocks away at Austin City Hall, Council Member Laura Morrison asked officials with the city’s Economic Growth office about the Statesman editorial. Economic Development Manager Brian Gildea told Morrison that the 90 percent regional workforce could indeed come from the MSA. Morrison asked Gildea about how HID might respond to the county’s 50 percent local demand. Gildea said that he wasn’t sure where company officials would stand.


The discussion prompted Martinez to chime in about the efforts of a subcommittee tasked with firming up a city economic development policy. “It’s at worst frustrating, and at best laborious to sit here and go until the 11th hour to determine what exactly this agreement is going to look like,” he said. “My goal in the subcommittee is to try to avoid that. We call these economic incentives. I really want us to create a policy out of this subcommittee that is truly an incentive to achieving (economic development) goals.”


Travis County is working on a similar document.


Council members are scheduled to conduct a public hearing and vote on the HID deal on Thursday. Commissioners are set to discuss it again next week.

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