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Officials tout benefits of offering incentives for Visa computer center

Thursday, November 29, 2012 by Michael Kanin

A proposed new computer center for global credit card purveyor Visa may cost the City of Austin as much as $15 million, counting a $1.56 million grant and the estimated costs for a range of city infrastructure and services.

 

But on the other side of the ledger, city officials say Visa’s proposed operation could generate as much as $21.8 million in city taxes and other revenues during the proposed 10-year life of an economic incentive agreement. All told, the Visa deal would net Austin roughly $6.8 million over 10 years, according to city projections.

 

A deal with the Foster City, Calif.-based firm would bring nearly 800 jobs with an average salary of more than $100,000 a year, according to company figures. At an Austin City Council briefing on Wednesday, Greater Austin Chamber of Commerce Senior Vice President Dave Porter noted that the salaries of the lowest 10 percent of the employees, about 80 jobs, would come with wages averaging $61,020 a year, a figure used to determine the livability of wages associated with a development project.

 

“This is a great project. It would be a great win for Austin,” Porter said.

 

Porter also noted that Austin hasn’t yet landed the project, as Visa is still considering sites in Virginia and Colorado for the computer hub, according to documents filed with the city. It is “still a very competitive situation,” he said. However, after Wednesday’s briefing, Kevin Johns, the director of Austin’s Economic Growth and Redevelopment Services Office, told In Fact Daily that Austin City Council’s approval of the economic incentive package would solidify Visa’s move into an office building it has selected at 12301 Research Drive in Northwest Austin.

 

If Visa locates the operation here, the company said it would ramp up its employment starting in 2013 with 160 workers in a temporary space. In 2017, it expects to occupy 175,000 square feet and have spent $27 million to equip the facility.

 

Council members remained mostly quiet about the proposal on Wednesday. The bulk of the questioning from the dais came from Council Member Laura Morrison, who previously expressed her concern about whether Visa would take tech workers away from established Austin companies.

 

Morrison returned to those concerns. “Visa is estimating that about 70 percent of the jobs that are created would go to local hires, which is great,” she said. “(But) the other side of the coin that comes up in the high tech realm is a little bit interesting, and that is that we really don’t have an over-abundance of high tech people that aren’t currently employed in the City of Austin.”

 

“We want to be careful that we’re not necessarily promoting competition for the high-tech people in the city of Austin,” Morrison continued.

 

Jeremy Martin, the chamber’s senior vice president of Governmental Relations, offered a stab at mitigating her concerns. “We’ve identified that we do have a very skilled labor force, meaning that they can be trained up for the specific jobs that are necessary for high tech,” Martin said.

 

Morrison summed Martin’s answer. “So the bottom line is to do some rapid training for folks that are really going to step up and into those jobs, if only they had those specific skills,” she offered.

 

Mayor Lee Leffingwell suggested that the potential labor shortage wasn’t all bad. “I think it’s really nice to have employers competing for employee services instead of the other way around,” he said.

 

Also present Wednesday were labor representatives fresh off two key Tuesday victories (see In Fact Daily, Nov. 27), in which a City Council subcommittee recommended an $11 wage floor for employees and construction workers as part of the city’s economic development criteria. Travis County commissioners on Tuesday approved such a measure. The labor advocates are urging City Council finalize the wage floor by the end of 2012, before they approve the Visa deal.

 

Council members voted 6-0 to set a public hearing Dec. 6 concerning the proposed Visa deal. Council Member Bill Spelman, who is in Boston at the National League of Cities’ Congress of Cities and Exposition, was absent.

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