Travis Commissioners OK incentive deal for Charles Schwab

Travis County approved the $8.5 million economic incentive agreement with Charles Schwab Tuesday morning, ensuring an Austin expansion of their offices and an estimated 823 new jobs for Austin within the next ten years. Charles Schwab will also get $4.5 million in state investments from the Texas Enterprise Fund, as promised by Governor Rick Perry contingent on the county rebate agreement.

The motion passed 4-1, with Pct. 1 Commissioner Ron Davis voting no.

Under the agreement, the county would give an estimated $3.6 million in tax rebates to Charles Schwab, stretched out over a 10-year contract period. Rebates will be given annually, after the corporation has paid its property taxes and provided proof of good faith efforts to create jobs for minorities and local citizens (see July 30 story).

Other taxing entities in the county, the City of Austin,  Austin Community College, Austin ISD and Central Health will not be doling out rebates and will collect the full benefit of their share of the property taxes. Glenn Cooper with Charles Schwab said the corporation would not challenge their appraisal amount unless the math was drastically wrong.

If Charles Schwab is not able to meet its construction and hiring goals within a 5-year mark, it must pay back its rebates in full. Glenn Cooper with the corporation said its current Austin workforce is 36 percent female and 28 percent minority hires, which includes Asian, hispanic and Black employees. More than 60 percent of the company’s Austin employees live in Travis County, Cooper said.

Davis said he was holding the line for his constituents and reminded the court that if Schwab were to stay in Austin without a rebate incentive, the entirety of the company’s property taxes would come in to the county.

“That’s a big deal here especially when people are struggling with their tax bills and they don’t know where their next meal is coming from,” Davis said. “There is a serious crunch in this community on affordability and that’s across the board.”

Monica Guzman, City Council candidate for District 4, addressed both the lack of transparency about the agreement and the overall incentive deal.

“I have nothing against incentive proposals if they are done correctly, if they are transparent and if they benefit the community at large,” she said. “I don’t think now is the time to approve this proposal. We need to focus on what’s going on, right now. We have, unfortunately, suburbanized poverty. People are being forced out of the urban core, into the suburban areas of Austin. Those who are already in suburbia are being pushed even further out beyond the city. Please take that into consideration.”

Pct. 3 Commissioner Gerald Daugherty approved of the contract agreement, but noted that the short timeframe given to the court to mull it over was insufficient. He asked Dave Porter, Vice President of the Greater Austin Chamber of Commerce, to keep that in mind for any future business.

“There is an image out there that the Chamber is only concerned about one thing and that is putting as many companies here as you can get,” Daugherty said. “Try not to bring us things where in two weeks we got to make something work or else people are going to start jumping off of bridges and mountaintops. That’s not really fair to the community.”

Porter told the Monitor that the Chamber had been discussing the expansion with Charles Schwab for four years, but negotiations had only recently gotten competitive. The Commissioners have been hearing about the agreement for at least a month, he said.

“They’ve been talking about this since June in their executive session under a code name. They did not know who it was, but they’ve known about it,” Porter said. “They knew that there was a financial services company considering an incentive. So it’s been more than two weeks.”