Samsung factory surprise winner
Genesee County was far from landing the coveted plant. Austin was the frontrunner, but a nearby city on the outskirts of the metro area trapped the plant in a move announced Monday.
Earlier this year, it looked like Austin, Texas was the favorite to land a $ 17 billion Samsung chip factory that officials in western New York state were hoping to bring to the county. rural area of Genesee.
These last months, a new leader has emerged – the town of Taylor, just outside of Austin – which accepted numerous city, county and school district incentives that would reduce Samsung’s tax burden by 90% in the first 10 years of operation From the factory.
“I thought it was Austin to lose,” said Nate Jensen, professor at the University of Texas-Austin who studies grant programs.
“I am more shocked that they are choosing a location just outside of Austin as opposed to their existing location in North Austin,” he said. “I didn’t think New York, given the site’s limitations, was a serious competitor. But again, I was surprised by Taylor.
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The The Wall Street Journal first reported Samsung officials picked Taylor on Tuesday morning after considering another location in Austin, near Phoenix, and the 1,250-acre Science, Technology, and Advanced Manufacturing Park, or STAMP, in Alabama, county. from Genesee.
Texas Gov. Greg Abbott made it official at a Tuesday night press conference in which he said that in addition to local grant agreements, the state would provide a $ 27 million grant for the project.
Abbott, who was joined at the announcement by key Samsung executives including company vice president Kinam Kim, described the project as “the largest foreign direct investment ever in the state of Texas”.
Analysts expected Austin to be selected for the project, in part because Samsung already has a factory there. Company officials said on Tuesday that Taylor’s proximity to the existing Samsung plant in Austin was one of the reasons the city was chosen. Kim also cited government support and the “readiness and stability” of local infrastructure as factors.
According to Jensen, the professor, the incentive agreements approved by Taylor City Council, surrounding Williamson County and the Taylor Independent School District have also helped.
The Austin American-Statemen reported Last week, the Taylor Independent School District approved an incentive deal that would see Samsung in tax savings of $ 300 million. The deal followed prior approvals of incentive programs by the City of Taylor and Williamson County, which would provide Samsung with an additional $ 350 million in tax savings over 10 years.
Jensen said the timing of the Taylor deal allows Samsung to take advantage of a controversial incentive package called Chapter 313, which provides for school tax cuts for companies that increase based on the level of investment involved.
Although the program was not reauthorized by the state legislature earlier this year, Jensen said it could still be applied to Project Taylor, saving the company up to $ 300 million. dollars on that incentive alone.
“It’s a huge incentive through 313, mainly because it’s a huge investment,” Jensen said.
Jensen said it was too early to say how much the incentives would add up, but described them as “very generous” and “out of the norm” given that they provide tax breaks for 20 years.
“Most cities offer 10-year incentives and some of them are reduced to more than 50 percent,” he said. “It’s a big dollar deal, but Samsung has also really pushed Taylor to his limits.”
Samsung is reportedly investing a total of $ 17 billion, including $ 6 million in buildings and $ 11 billion in equipment, on the Taylor site. The project is expected to create approximately 10,000 construction jobs and 18,000 full-time positions once the plant opens. Samsung expects construction to begin next year, with the plant opening in 2024.
US Senator Chuck Schumer, D-New York, and officials from the Genesee County Economic Development Center had hoped to attract Samsung’s chip factory on a 1,260-acre industrial site known as the Science and Technology Advanced Manufacturing Park in the city of Alabama.
“Senator Schumer believes that STAMP remains a top location for companies looking to locate or expand in New York City, as recently demonstrated by Plug Power’s decision to build its new production facility there. ‘green hydrogen. Senator Schumer’s primary focus remains to work closely with officials in Genesee County and New York State to push companies that are actively considering STAMP to locate here, ”said the spokesperson for Schumer, Allison Biasotti.
The county economic development agency has so far invested more than $ 26 million mainly public funds from the Buffalo Billion program to develop the site. For years, the site remained vacant before finally finding its first industrial tenant – a producer of hydrogen fuel called Plug Power.
Last month, Power plug broke the earth on a $ 290 million hydrogen production facility at STAMP. As part of a development agreement with the Genesee County IDA, Plug Power has agreed to build a substation that officials say will help attract additional tenants to the property.
A spokesperson for the Genesee County Economic Development Center declined to comment when asked about the Wall Street Journal report on Samsung’s decision, saying the agency “does not comment on the status or details of the due diligence reasonable of a business “.