Economic-development professionals across the country are fond of calling what they do “a contact sport” because it pits states, regions and even neighboring cities against one another.
That has been especially true in recent years in cities across Williamson and neighboring counties as they vie to bring new jobs, sales-tax revenue and an increase in property valuations that will fill government coffers in the future.
When location, amenities and talent pool are equal in the competition, the thing that can make or break a win is the use of tax abatements and other incentives to sweeten the deal.
“We are still having to compete with nearby cities,” said Daniel Seguin, director of communications for Taylor. That’s despite the city having plucked the largest foreign investment in the history of the state with the $17 billion Samsung Electronics Co. Ltd. semiconductor factory now nearing completion.
With Samsung “we had to go above and beyond to get the win,” Seguin said. That put Taylor on the map for many suppliers who want to be near the South Korean tech giant’s operations.
When the city, the Taylor Independent School District and Williamson County did the original tax-abatement deal with Samsung, some elected officials thought that would be the end of needing to hand out tax breaks.
It wasn’t.
At the time, then-Mayor Brandt Rydell, who left office this May, told East Wilco Insider that “Samsung being here is the incentive” for Samsung materials and service companies to come.
The tax-abatement agreement between Samsung and the city is contingent on job creation; the discount on the property tax goes down every decade until it goes away after 30 years. Taxes paid by Samsung during those three decades are expected to total about $52 million.
Under the agreement with Williamson County, Samsung would pay its property taxes in full each year and then receive a refund for 90% of it the first 10 years and 85% the second decade.
However, while proximity to Samsung is a plus for many of the companies eyeing Taylor, competition and a wrinkle caused by federal legislation means tax abatements are still very much a part of the economic development playbook.
Ben White, CEO of the Taylor Economic Development Corp., said most of the suppliers could locate in any nearby city with access to transportation routes such as Interstate 35 and Texas Toll Road 130 and easy paths to Samsung’s campus in southwest Taylor.
“They can go to any community,” White said, naming Manor and Elgin as a few of the cities that have gained semiconductor manufacturing supply companies.
Another reason for still using tax breaks is that companies applying for grants or loans from a $53 billion pot of federal money for semiconductor business development in the U.S. require a buy-in from the local community.
The fund created as part of the CHIPS and Science Act wants a company seeking federal dollars to have a city or county incentive of some sort to qualify.
White said these are all performancebased incentives that include improvement to the property to increase its taxable value over time and often include job creation.
The most recent company to lay claim to a tax deal is phosphoric acid manufacturer Soulbrain, a Samsung supplier planning to build a $575 million plant at the RCR Taylor Rail Logistics Park near the 1,200-acre Samsung property.
The company will receive a 25% abatement on property taxes at each of its phases of construction over the next 10 years — the first planned for 2029 and the second in 2033.
Because none of the money is handed out up front, the city has much to gain and little to lose.
White said the city and Taylor EDC will get sales-and-use taxes on construction materials purchased during the project and will receive ad valorem, or property taxes, on 75% of the improved value.
The increase in sales-and-use taxes related to Samsung construction was the primary reason EDC revenues for the fiscal year ending Sept. 30, 2023, nearly tripled to $6.2 million compared to 2022, according to its latest audit. That means more money for additional economic development activity.
The city’s cut of these deals can go for things like more routine road maintenance, infrastructure and controlling residential property taxes.
Tax abatements and other tools also are useful in drawing other firms to the area to diversify Taylor’s economy and job market beyond semiconductor infrastructure.
“We’re juggling a lot of projects to try and make Taylor a more wellrounded economic engine,” White said.
In early August, the city finalized an agreement with Blueprint Projects, a $90 million data-processing center slated for Taylor. While it’s not many jobs, the increase in the taxable value of the property will go up substantially. The company will receive 50% of sales-and-use taxes related to the project over a 10-year period, up to $1.5 million.
In Hutto, one of the biggest tax deals is for Es Vedra Cinemas Hutto LLC. The combination of performance-based grants and sales-tax incentives are worth up to $4 million and attracted a major movie theater and entertainment venue from Austin-based Evo Entertainment, according to data from the Texas Comptroller’s Office.
AEND Industries Inc., a 20-yearold skateboard wheel manufacturer in Hutto, is halfway into a 10-year tax deal worth up to $175,000.
New development, including big corporations moving building-out facilities, small business openings, more retail development and a plethora of new housing projects have all contributed to a rising tax base across the county.
The taxable property base in Williamson County grew to about $25 billion last year, up $5 million from 2022, said Dave Porter, CEO of the Williamson County Economic Development Partnership.
We’re juggling a lot of projects to try and make Taylor a more well-rounded economic engine.”
— BEN WHITE, CEO OF TAYLOR ECONOMIC DEVELOPMENT CORP.
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