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Visa Council Debate Begins

City Council sets public hearing for incentives package

By Michael King, 2:21PM, Wed. Nov. 28, 2012

Visa Council Debate Begins

Wednesday afternoon, City Council held its first formal consideration of the proposed economic development grant of $1.56 million for Visa Inc.'s "Global IT Center" and nearly 800 jobs. The special called meeting was only to set the public hearing (done, for Dec. 6), but brief public comment tossed a few early salvos, pro and con.

The summary staff briefing by Brad Byers of the Economic Growth and Redevelopment Office reprised the overall deal and the WEBLoci matrix of direct benefits and costs over the 10-year period of the grant: at an annual grant cost of $250/yr per job, 794 jobs with an average salary of $113,000. EGRSO calculates direct costs to the city (including the grant) of $15 million, direct benefits of $21.8 million, for a net direct benefit of $6.8 million.

Curiously (unless NewsDesk missed it), there was no reference at all to the already pledged $7.9 million from the Texas Enterprise Fund, contingent on the local incentives – yet that pledge puts serious pressure on the city to concur rather than be accused of scuttling the deal. Craig McDonald of Texans for Public Justice has called the process "economic extortion."

The meeting itself was brief, about half an hour, enough for a taste of public testimony that may be echoed at next week's formal hearing. There was a bit of support for the proposal – most notably from folks speaking on behalf of the "living wage" incentive provisions (on construction jobs) voted Tuesday by Travis County and the Council's own special committee on economic incentives, encouraging the Council to approve those provisions prior to the Visa decision (not likely, as the Visa/staff negotiations preceded those committee recommendations). Folks from the Workers Defense Project and local unions supported that position.

The stronger (or at least louder) testimony opposed the incentives, most coherently by Paul Robbins, who pointed out that the office site Visa plans to renovate is in the Round Rock Independent School District (therefore, not to the benefit of Austin ISD) and that the proposal in effect supports "unsustainable growth" for a town already burdened with high housing and utility costs. Robbins said he had supported incentives for the solar industry, because the industry currently requires government support and "makes Austin better" and a model for other cities. However, he argued, "Credit transactions and race cars [Formula One] are not at the top of this pyramid." (In a partial rejoinder, Mayor Lee Leffingwell pointed out that a large part of the RRISD is within Austin city limits.)

The rest of the opposition was mostly incoherent ranting, featuring "former candidate for mayor and investigative journalist" Clay Dafoe loudly denouncing this "criminal theft" and ordering the Council to vote against it*[see note below], and a bit later former Council candidate Laura Pressley questioning the deal's math and its apparent "subsidy" of relatively high-wage jobs. (So if the jobs paid less, that would be better?) Pressley concluded, "That's insanity, it doesn't work."

Prior to the vote, there followed a brief colloquy between Council Member Laura Morrison and Chamber of Commerce spokesman Jeremy Martin on mutual efforts to recruit (or help educate) more high-tech employees for these kinds of jobs. Morrison noted that the Visa proposal called for 70% local hires, and said she hoped that would not indirectly create unfair competition for other local businesses. The mayor commented wryly that he would be pleased to see "employers competing for employee services, instead of the other way around."

The motion to set the public hearing for Thursday, Dec. 6, passed 6-0. (Bill Spelman was absent.)

For more on the Visa proposal and TEF, see "Visa Wants a Chargeback" NewsDesk, Nov. 26), and the next print edition, on the street Nov. 29.

*Note: Dafoe called NewsDesk to object to this summation, insisting that he had not "ordered" council members to vote against the proposal. As recorded by Channel 6, and featuring Dafoe's grandiose hat-throwing opening, his exact words were, "As your constituent, I instruct each and every one of you to vote no!" Readers are welcome to consult (at their own risk) the recording to determine whether Dafoe's quibble has any merit.

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