Council approves deals with Websense, Dropbox

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by ASHLEY GOUDEAU / KVUE News and Photojournalist J.P. HARRINGTON

Bio | Email | Follow: @AshleyG_KVUE

kvue.com

Posted on February 20, 2014 at 6:39 PM

AUSTIN -- Since opening a restaurant in City Hall back in 2005, Ron Barton, general manager of Austin Java, has seen steady growth downtown. That's something that's very good for his business.

"Our goal is to have everyone come here," said  Barton.

And it seems coming to Austin is a lot of people's goal. With about 100 people moving to the metro every day, Mayor Lee Leffingwell says there's pressure to make sure jobs are waiting for them.

"Population growth is going to be there no matter what we do. So I've always said, a good quality of life depends on a good job," said Leffingwell.

One tool to create jobs is to offer economic incentives. The council called a special meeting Thursday to vote on two such deals.

Cyber Security firm Websense wants to relocate, adding 470 jobs over 10 years with an average pay of $82,000 a year.

Dropbox, an online file sharing company, wants to expand its Austin office downtown, adding 170 jobs over 10 years with an average pay of $59,000.

The city's economic development department suggests 10-year performance based grants of $438,000 for Websense and $244,500 for Dropbox to ensure the companies move to Austin. Each company would get a check at the end of each year, for 10 years, if it meets hiring criteria. Both companies will spend $15 million in capital investments and the city stands to make a net fiscal profit of $2.35 million from the deals.

But taxpayers and council members are split on the idea.

During the meeting, Council Members Laura Morrison and Kathie Tovo questioned whether the deals are necessary with Austin's current economic growth and high ratings.

"Every public dollar we spend on this kind of investment is a dollar we can't spend on another kind of investment." said Tovo.

Council member Bill Spelman asked questions to determine if the companies would come to Austin without deals.

The chief financial officer of Websense, Jim Hagen, said company executives are in talks with other cities and could decide to expand to one of them if a deal isn't approved in Austin.

"We believe we will hire up to 90 percent locally. The economic incentives here in our grading of cities, Austin's not the most low cost city, so these incentives are important in us making a final decision," Hagen said.

"If we were not to give an incentive, then Websense would feel a need to stay where they were and perhaps make a better deal with someplace else. So I think we are in a competitive situation," Spelman said during the meeting.

The deals were approved  by the council with five council members voting for the deals and Morrison and Tovo voting against the deals.

"In an ideal world, you know, we could just compete on the fact that we have a great city and a great swimming pool and a great natural environment and lots of things going on. But the fact is that's not the real world. We need all of those things plus we need to show that we're in the game with these kinds of incentives," said Leffingwell.

Though Barton isn't a fan of having his tax dollars go to incentives, he admits the end result is good.
 
"I would say I'm more of a firm believer of businesses, you know, bring more people in here, helping us out as well as a company," Barton said.

Executives with Websense and Dropbox will now vote on whether to accept these deals.

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