Council considers tech company incentives


by ASHLEY GOUDEAU / KVUE News and Photojournalist ERIN COKER

Bio | Email | Follow: @AshleyG_KVUE

Posted on February 14, 2014 at 6:12 PM

Updated Friday, Feb 14 at 9:46 PM

AUSTIN -- With hundreds of people deciding to move to Austin every week, the race is on to bring more businesses to the Capital City. The industry of choice for business recruiters seems to be everything tech.

"I work for one," said Shannon Willis, referring to her tech job. "I'm looking forward to more growth in that direction."

Austin's Economic Development Department is working to bring more tech companies to the city. The staff is asking the council to approve two incentive deals to bring in 640 new tech jobs over the next 10 years.

The first is a $438,000 performance-based grant for Websense, a privately owned security firm based in San Diego. The company would relocate its headquarters to Northwest Austin, adding 470 jobs that pay an average of $82,000 a year.

The other deal is with Dropbox, an online file sharing company. Dropbox opened a small office on Congress Avenue downtown in August and is in the process of hiring 30 people. It wants to expand into a larger office downtown, adding 170 jobs that pay an average wage of $59,000 a year. In return, the city would give Dropbox a $244,500 grant.

"It is a jobs-based grant. So, they have to pay their employees what they say they're going to," said Natalie Betts, who is in charge of Global Business Recruitment and Expansion for the City of Austin. "And if they do, we so provide them with the incentive payment at the end of the year."

"I think it's great. It's great for the city. It's a nice injection of new talent to the city. It helps the unemployment rate," said Austin resident Casey Hogan.

"We've got to do what we've got to do to keep the town growing and to keep money coming in," Willis said.

Not everyone sees it that way.

"These companies are coming in, and they're promising to bring in a lot of jobs in to Austin, but they're also bringing their own people in,  and we're not hiring a lot of local Austin people," said Austin resident  Denny Thomas. 

While the deals don't require a quota for how many Austinites the companies have to hire, Betts said the companies plan to put locals to work.

"A lot of what they chose Austin for is the talent pool, so they want to recruit Austinites," said Betts. "Websense and Dropbox both plan to hire the vast majority of their workers here locally."

Betts also pointed out that the market to recruit businesses is competitive. Together, the companies capital investment would be more than $15 million, with a net fiscal benefit to the City of Austin of $2.35 million. That makes a combined economic incentive proposal of $682,500 seem like a small price to pay.

"We're in a very competitive environment where a corporate headquarters relocation or an expansion of a high growth company like Dropbox [is] a project that a lot of communities are interested in and are offering incentives for," Betts said.

To help prepare unemployed Austinites acquire the skills for one of those tech jobs, the Texas Workforce Commission offers training, for free in most cases. Click here for information on the program and for a schedule of orientation classes

The Council will hold a special meeting Thursday, Feb. 20 at 1:30 p.m. to vote on the deals. Click here to tell them what you think about it.