Agenda - 05-18-2010 - 8b - Laserfiche WebLink

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Home Depot Data Center June 24 2004 100% of Property Tax (10 years) Alternative Technology September 2, 2004 100% of Property Tax (10 Development Center ears 100% of Property Tax (Years Samsung 300 mm August 18, 2005 1 -10) Fabrication Plant 75% of Property Tax (Years 11 -20 Hewlett- Packard Data March 2 2006 40% of Property Tax (Years 1- Center , 10 $40,000 for 1" and 2nd Year All other years 50% of the sum Friday Night Lights March 22, 2007 of a) Sales taxes Paid b) City Fees Paid and c) $95 per employee HelioVolt November 1, 2007 60% of Property Tax (Years 1- 10 Table 1 displays the list of incentives made to companies since 2003. Each company pays their total tax liability in any given year. It then must submit a request for reimbursement at the agreed -upon percentage. The City checks if the company is in compliance with the agreement. The City then reimburses the company in the following year. After the approval of an agreement, an essential step is ensuring that each company holds up its end of the bargain. To that end, the City employs a structured compliance review for each company. City officials review property tax records, payroll reports, financial statements, sales tax returns, invoices, and other records specific to performance requirements. Moreover, in 2007 the City established a requirement that each compliance review be verified by an independent party and for that independent review to be made available to the public. For much of the past decade, Austin has targeted incentives to both large -scale land developments (Domain) and firm -based developments. However, Austin now solely uses a firm -based economic development program. It eliminated incentives for private large scale mixed -use developments by resolution in December, 2007. These incentives were eliminated due to a perceived lack of public participation and questionable practices of estimating costs and benefits of targeted projects. The commentary of economist Michael Oden, a professor in the Community and Regional Planning Department at the University of Texas at Austin, provides insight as to why project -based incentives were eliminated. "To understand the problems inherent in retail incentives, it is important to recognize that retail activity is generally the result, and not the cause, of economic growth in a city or region. Retail activity cannot grow faster than disposable income within a given economy. To the extent that new or expanding retail establishments grow faster than local purchasing power, there will likely be a crowding out of existing retail establishments. In most cases, retail incentives simply shift economic activity from one place to another, rather than generating new products or jobs. This is why it makes little sense to offer public incentives to retail except in special cases such as trying to bring basic retail services to underserved neighborhoods. At one time, these incentives may have been justifiable to introduce the mixed -use concept to the Austin market." A review of the Agreement between HelioVolt and the City of Austin 95IPage