Fab Foray
A good many years have passed since the Greater Austin Chamber of Commerce had its high tech recruitment heyday in the early Nineties, when the city doled out tax abatements like lemon drops to the microchip industry that made Austin a boomtown. The Chamber’s last big fling with a major employer was in 1995, when it cajoled city leaders to make the deal that landed Korea’s Samsung Electronics here. Now the Chamber wants to return to its former glory as supermarketer to the world by persuading Advanced Micro Devices to build a proposed $3.5 billion semiconductor chip factory in the Austin area.
But what a difference a little bust can make: These days, high tech companies are about as popular as Tamagotchi keychain pets. That’s hardly stopping the Chamber from sounding its familiar pitch at City Hall — “Jobs! Jobs!” — but after banking far too much political capital in quixotic efforts to draw Intel and Vignette downtown, the City Council isn’t enthusiastic about another public courtship.
That’s not to say council members don’t care whether AMD expands here, though — in fact, they badly want the new plant. The mayor and City Council members may have been conspicuously absent at the Chamber’s soiree with AMD executives in March, but there’s been plenty of private talk over beer.
AMD moved its chipmaking facilities to Austin more than 20 years ago, and has treated the town like a real home, investing millions in local schools, workforce development, and charities. It’s not likely that the next-generation plant the company proposes would create as many new jobs as advertised (1,500) because the factory AMD built here in 1995 is expected to be phased out, so employees would undoubtedly be transferred from the old to the new. But the eventual loss of AMD’s current Austin work force of 4,000, which includes engineers with six-figure salaries along with blue-collar technical workers, is not an attractive prospect.
The key question, of course, is how much those jobs are going to cost. AMD has reportedly been propositioned by at least 20 other cities, including Dresden, Germany, where the company last year completed its most modern fab with the help of hundreds of millions in subsidies. Last month, the city of Austin made its offer — a menu of services and incentives with a potential market value of $100 million, according to the rumor mill — and now waits for AMD to name a potential site. Chamber president Mark Hazelwood says the city made a “very solid overture” to AMD, and now the Chamber’s role will be to highlight the economic benefits AMD brings Austin. “If we do that, the deal will sell itself,” says Hazelwood.
Led by board chair Susan Dawson, president of Athens Group, the Chamber plans to press a behind-the-scenes campaign to remind public officials and influential business leaders that Austin’s reputation as a home to cutting-edge technology is at risk if AMD goes elsewhere. They’ll draw parallels between our loss of AMD and Boeing Corporation’s departure from Seattle.
But again, how much is that prestige worth?
We can expect the “How much better off are you than you were four years ago?” refrain to be picked up by groups opposing city subsidies, challenging whether high tech companies have blessed us with anything more than clogged roads and outlandish housing costs. The SOS Alliance, for one, isn’t going to fuss about the differences between a company that’s contributed to Austin’s economy for two decades and the fly-by-night software companies and dot-coms that have arguably caused most of the ills people associate with tech. SOS board chair Mark Tschurr says he categorically rejects paying incentives to corporations, even if they have been good neighbors. “Most people I know in this town are good citizens … but at the end of the year, they don’t get a rebate on their property taxes,” says Tschurr. Tschurr says that SOS will mount an ad campaign against a subsidy package for AMD, just as it did against the city’s offer to Vignette. “Fab 25 is not going anywhere for 10 years,” says Tschurr, referring to AMD’s current chip factory in Southeast Austin. “If AMD doesn’t build here [this time], that doesn’t mean they won’t build the next generation plant here, or that someone else won’t.”
This Week in Council
The final hearing on amendments to the Austin Metropolitan Area Transportation Plan is scheduled for 6pm this Thursday, May 24. The plan includes an extension of MoPac south to SH 45, which could spur further development in the Barton Springs watershed. Council is scheduled to vote on the AMATP following the hearing.
The zoning plan the council passed on first reading two weeks ago for the Bennett tract, aka the Robertson Hill development, will probably get a second, but not final, approval Thursday. The bad news for neighbors opposing the high-density project is that efforts to shrink the size of the buildings have come to an end; for the past two weeks, Council Member Raul Alvarez and Riata Development have mostly fiddled with the details of the city’s proposed $23 million incentive package. Alvarez reports that he’s doubled the size of Riata’s affordable housing commitment, and gotten further assurances that any primary employer would train and hire local residents. The good news for neighbors is that at last count, Riata was still one vote short of the six it needs to overturn their valid petition and win final approval. It’s not yet known whether Council Member Daryl Slusher, who would have to cast that sixth vote, feels that the developer has done enough to provide neighbors with view corridors to the west. A public hearing on the matter is scheduled for 4pm.
This article appears in May 25 • 2001.