{"id":411709,"date":"2026-08-20T08:58:28","date_gmt":"2026-08-20T08:58:28","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-tx\/411709\/"},"modified":"2026-08-20T08:58:28","modified_gmt":"2026-08-20T08:58:28","slug":"incentives-city-of-austin-revisits-development-policies-that-subsidize-worlds-richest-companies","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-tx\/411709\/","title":{"rendered":"Incentives: City of Austin revisits development policies that subsidize world\u2019s richest companies"},"content":{"rendered":"

The City of Austin has paid out $29 million in economic development funds to a dozen recipients since October 2023. Almost 85 percent of that went to Samsung and Apple \u2013 among the top 30 global companies<\/a> in revenues. The city also paid almost $300,000 to HID Global Corp<\/a>., whose products secure access to buildings and computers.<\/p>\n

Local property taxpayers primarily finance these initiatives through the city\u2019s General Fund, records show.<\/p>\n

The Austin Free Press obtained this data<\/a> through a Texas Public Information Act request for records of money flowing in and out of the city\u2019s Economic Development Fund and its funding arm, the Economic Incentive Reserve Fund. The city is currently revising its controversial economic development policies.<\/p>\n

\"Source:Source: City of Austin<\/a><\/p>\n

The city\u2019s only other seven-figure economic development outlay was $2.6 million paid to the Mueller redevelopment project<\/a>. A Tax Increment Reinvestment Zone<\/a> created by the city in 2004 allows Mueller\u2019s<\/a> developer, Catellus Development Corp.<\/a>, to reinvest Mueller\u2019s increasing property taxes onsite.<\/p>\n

\"CarlosCarlos Soto<\/p>\n

City \u201cpayments associated with the Mueller redevelopment are tied to the City\u2019s contractual obligations\u201d as part of that deal, city spokesperson Carlos Soto<\/a> wrote in response to Austin Free Press questions about the payment.<\/p>\n

Smaller investments<\/p>\n

Apart from those expenditures, the city\u2019s development payouts are something of a grab bag, records show.<\/p>\n

The city paid almost $500,000 to three entertainment entities. More than half of that went to California-based Eye Productions<\/a>, which produced<\/a> the now-canceled TV show \u201cWalker<\/a>\u201d around Austin. The city also paid $150,000 to the Austin Film Society<\/a> and almost $50,000 to the Greater Austin Performing Arts Center<\/a>.<\/p>\n

\"Source:Source: City of Austin<\/a><\/p>\n

Two education institutions, the\u00a0University of Texas Rio Grande Valley<\/a>\u00a0and the local nonprofit\u00a0Skillpoint Alliance<\/a>, received a modest total of $185,000. The UT Rio Grande Valley payments supported programs for \u201cemployee-owned businesses\u201d or cooperatives, as well as \u201ccooperative community land trusts,\u201d a city statement said.<\/p>\n

Some development deals are ending as others are starting. The city\u2019s\u00a0FY2025-26 Budget<\/a> states that its Economic Incentive Reserve Fund is \u201cservicing agreements with the Domain, Samsung, HID Global, Apple and L\u2019Oca d\u2019Oro,\u201d an Italian restaurant in the Mueller neighborhood.<\/p>\n

In February, the city\u00a0announced<\/a>\u00a0that South Korea-based\u00a03billion US Inc.<\/a>\u00a0would open a northeast Austin AI genetic testing center for rare diseases.\u00a0The company has pledged to hire up to 200 people over 10 years. The city agreed to pay the company $1,000 per eligible job through its Business Expansion Program<\/a>.<\/p>\n

Who pays?<\/p>\n

Records from the city track $29 million in funding to the Economic Expansion Program and Economic Incentive Reserve Fund from October 2023 through April 20, 2026. The property-tax reliant General Fund that the city uses for most city services supplies 69% of that development money, records show.<\/p>\n

\"Source:Source: City of Austin<\/a><\/p>\n

Another $2.7 million in economic development funding (11%) came from Project Connect, which is partially funded by local property taxes. Contractually, Project Connect pays part of the property-tax rebates the city has awarded to incentivize companies to hire in Austin, a city statement to the Austin Free Press stated.<\/p>\n

The city\u2019s economic development fund also raked in $1.5 million in interest income, as the Economic Incentive Reserve Fund sat on<\/a> annual reserves ranging from $6 million to $13 million in recent years.<\/p>\n

\"KirkKirk Watson<\/p>\n

Against that backdrop, Austin Mayor Kirk Watson<\/a> is urging a major shift in the city\u2019s economic development strategy, warning that Austin risks falling behind as growth increasingly occurs outside its borders and competing cities strengthen their competitive edge.<\/p>\n

Writing in his April 30 \u201cThe Watson Wire\u201d newsletter, the mayor proposed a \u201cprogressive economic development policy\u201d that \u201cdefines explicitly\u201d what kind of companies Austin will recruit. \u201cThey pay living wages and invest in Austin\u2019s workforce,\u201d he wrote. \u201cThey bring career pathways, not just jobs. They operate as stewards of Austin\u2019s public resources \u2014 its water, its energy, its land.\u201d<\/p>\n

Watson did not explicitly say how he would change Austin\u2019s development recruiting. The current top recipient of Austin economic development funds, for example, is Samsung Austin Semiconductor. It\u2019s also the Austin Water utility\u2019s largest customer, consuming 2.2 million gallons<\/a> in 2025, according to city documents.<\/p>\n

A development resolution<\/a> that the Austin City Council passed a week following the mayor\u2019s April endorsement of a new development approach directs City Manager T.C. Broadnax<\/a> to draft new development policies within six months.<\/p>\n

A resolution attachment<\/a> states this strategy should focus \u201con high growth industry clusters\u2026 where Austin has a comparative advantage<\/a>\u201d and \u201cwith a nexus to Austin\u2019s research institutions.\u201d It adds that the city will recruit \u201csupply chain companies \u2014 the vendors, component manufacturers, and service providers\u201d that add depth to \u201cAustin\u2019s industrial clusters.\u201d It also calls for a \u201cpermitting concierge service\u201d to fast-track development permits.<\/p>\n

Policy critiques<\/p>\n

City incentive deals have long focused on attracting high-tech big fish such as Intel, Computer Sciences Corp., Samsung and Apple. Critics say this creates higher-paying jobs for some while making the city less affordable for others.<\/p>\n

\"RichRich Heyman<\/p>\n

Rich Heyman<\/a>, who\u2019s challenging District 9 City Council Member Zo Qadri<\/a> in November, says that Austin\u2019s wooing of high-wage tech companies boosts<\/a> those kinds of jobs while indirectly increasing lower-wage jobs that service high-income people. Meanwhile, middle-income Austin jobs have decreased, he told the Austin Free Press.\u00a0\u201cWhat we need to do is flip that model on its head, make the local and small business the bulk of what we do.\u201d<\/p>\n

Heyman pointed to New York City initiatives that \u201chelp create worker-owned and employee-owned businesses.\u201d He said that such businesses invest more locally, are better insulated from stock market gyrations and are \u201cless likely to do things that would adversely affect the local community.\u201d<\/p>\n

The city council began retooling its economic development policies in 2018 to promote job training and include small businesses that hire workers without advanced degrees, the Austin Monitor\u00a0reported<\/a>. Although the city announced in March that it\u00a0had completed<\/a>\u00a0those changes, most of its development funds still go to a few global corporations, with a tiny share benefiting small businesses and worker training.<\/p>\n

\u201cMany of those agreements were\u00a0established\u00a0before the City\u2019s current economic incentive policies were adopted,\u201d according to a city statement to the Austin Free Press.\u00a0\u201cThe economic development policies currently under development are expected to create \u201cmore opportunities to support small businesses, workforce development, and place-based investments.\u201d<\/p>\n

\"ZoZo Qadri<\/p>\n

Council Member Zo Qadri<\/a> told the Austin Free Press that Austin\u2019s development plans require more than one focus. \u201cAs we continue to navigate a challenging fiscal environment shaped in part by state and federal limitations, we need an economic development strategy that supports neighborhood businesses while also ensuring that larger investments provide meaningful benefits for our community,\u201d he said.<\/p>\n

Andrew Wheat is the Data, Information and Enterprise Editor of the Austin Free Press.<\/p>\n","protected":false},"excerpt":{"rendered":"The City of Austin has paid out $29 million in economic development funds to a dozen recipients since…\n","protected":false},"author":2,"featured_media":411710,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[132,134,133],"class_list":["post-411709","post","type-post","status-publish","format-standard","has-post-thumbnail","category-austin","tag-austin","tag-austin-headlines","tag-austin-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/411709","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/comments?post=411709"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/posts\/411709\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media\/411710"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/media?parent=411709"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/categories?post=411709"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-tx\/wp-json\/wp\/v2\/tags?post=411709"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}