Council considers incentives to fill Seaholm plant

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by ASHLEY GOUDEAU / KVUE News and Chief Photojournalist SCOTT GUEST

Bio | Email | Follow: @AshleyG_KVUE

kvue.com

Posted on January 16, 2014 at 7:46 PM

Updated Thursday, Jan 16 at 10:56 PM

AUSTIN -- The Seaholm Power Plant is more than a landmark. It's a piece of Austin history, now being renovated into a home for Austin businesses.

Massachusetts-based AthenaHealth, Inc. wants to fill the space. AthenaHealth, Inc. is a tech company that offers cloud-based services for medical companies. It currently has an office in The Domain with 36 employees. But before company officials make the move to downtown, they want an incentive package from the city.

"The State of Texas is also prepared to offer an incentive package of $5 million, and all of their incentives are contingent upon local investment," said City of Austin global recruitment and business expansion coordinator Natalie Betts. 

The Economic Development Department is proposing the city council approve a $679,500 incentive package. Officials call it a per-job incentive rebate. AthenaHealth, Inc. officials plan to create 607 jobs over the next 10 years to fill the Seaholm Plant. For every job AthenaHealth, Inc. creates, the city will give the company $250 out of the Economic Incentives Reserve fund. That fund is made up of taxpayer dollars and money from Austin Energy and Austin Water.

The city stands to make a net fiscal benefit of $1.67 million dollars over the next 10 years if AthenaHealth, Inc. expands.

Still, many people have asked why Austin, a city that attracts new people and new businesses daily, needs to offer incentives in the first place.

"I want to make the point that we rarely use incentives. [We do a] small percentage of what our peer cities do," said Austin mayor Lee Leffingwell. "We may do one-eighth or one-tenth of what Dallas or Houston does."

Over the last 10 years that the Economic Incentive Program has been in place, Austin has awarded incentives to 16 companies.

Leffingwell said a major requirement for an incentive to be awarded is the city has to make money off the deal.

"If you start from the position that you have zero dollars, if they come here without an incentive, we have two dollars. If they come here with an incentive, we have one dollar. But if they don't have the one dollar incentive, they might not come at all, so we might have zero dollars," Leffingwell said.

Still, some council members say the city has to be cautious with these deals.

"I think each decision needs to be evaluated very carefully. You know, every dollar we spend on incentives to encourage business to locate here is a dollar we can't spend somewhere else in the city budget," said city council member Kathie Tovo. 

The council will have time to think about the proposal. It will hear a presentation at its first council meeting of the year on Jan. 23. The council is set to have a public hearing and vote on the proposal on Jan. 30. That date could be pushed back, and the city could vote to make changes to the package. 

People have also asked why the city is reaching out to more large companies when Austin lacks infrastructure and housing for its growing population.

Leffingwell said it's not a matter of if people will move to Austin, but rather they are moving to the Capitol City, and the council's focus is making sure the people who move here have jobs.

"I'm not going to get into the argument of whether growth is good or bad, because it has its ups and downs, and people have different opinions," Leffingwell said. "What I would say is growth is going to occur anyway. People are going to continue to come here, as they've done since we've doubled in population over 20 to 25 years since 1870. And people were coming here during the Depression. They were coming here during World War II. So, people are going to come. So, what this is all about is really not about creating growth, although that's a byproduct of it. It's about creating jobs so the people here, whether they've been here a long time or are just now coming to Austin, will have the opportunity to have a job. And I've said for many years, a good quality of life begins with a good job, and that's what this is about."

AthenaHealth, Inc. has agreed to pay all of its new employees a minimum of $11 per hour. The average salary wage across all positions over the next 10 years is $132,085 per year.

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