Elon Musk listens to the speech of Chinese President Xi Jinping during a state dinner with President Donald Trump at the Great Hall of the People on Thursday May 14, 2026, in Beijing.
Mark Schiefelbein/AP
Residents of a largely rural county east of College Station aren’t wild about Elon Musk’s proposal to receive tax breaks in exchange for building a massive computer chipmaking facility there.
Many of them lined up this week to voice concerns and, in some cases, support for the semiconductor manufacturing and advanced fabrication facility being pitched by Musk’s SpaceX. Dubbed Terafab, Musk says it would be the world’s largest.
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Supporters say the investment, which could begin at $55 billion and more than double through later phases, is too good for Grimes County to pass up. Detractors, though, worry about the questionable environmental track record of Musk’s businesses — and whether the huge space company getting set for what’s likely to be the largest-ever initial public offering even needs the help.
“I believe it would be immoral to give this company tax abatement when we have serious concerns about health issues and safety issues,” county resident Jacqueline Ross told Grimes County commissioners.
She was among more than a dozen who signed up to speak at a special meeting to discuss commercial and financial information the commissioners court received from SpaceX regarding its request. No details of the proposal have been made public.
Much of the meeting was conducted behind closed doors. But commissioners took public comment on the fabrication facility proposed for Gibbons Creek Reservoir and surrounding areas for a portion of the meeting.
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Ross was among those who told commissioners the development is unwelcome given SpaceX’s record of environmental and safety citations. She listed fines levied against SpaceX in recent years, including a 2024 fine of nearly $150,000 after SpaceX broke clean water laws and had a fuel spill at its South Texas launch site. Another federal fine was issued over a crane accident that occurred while the company was cleaning up debris from a rocket test explosion at Starbase. Ross also referenced a fine from Texas’ environmental agency over SpaceX illegally discharging wastewater into wetlands near its facilities.
Like Ross, another county resident who spoke later in the meeting similarly cited state guidelines for tax abatements, which note the tax breaks may not be granted if the plan would have a serious adverse effect on existing businesses or constitute a hazard to public safety, health or morals.
“What is more compelling, the hope of jobs that may or may not benefit our residents or the very real concern that a project of this size could affect the health of families who live nearby?” she asked.
At minimum, the area resident said, Grimes County should receive the same level of written protections, benefits, performance requirements and enforceable safeguards companies agree to in other Texas counties.
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Travis County agreement cited as example
In an interview ahead of Wednesday’s meeting, Nathan Jensen, a professor in the department of government at the University of Texas at Austin, used Travis County as an example of a county that crafts strong economic development agreements.
In its recent annual review of its deal with Musk’s Tesla Inc., for example, Travis County commissioners found the company failed to satisfy requirements including complete documentation of site safety, resulting in them a vote to withhold 9% of the company’s tax rebates for 2020, 2021 and 2022.
Now, with Terafab expected to include some work in Austin while Musk continues to consider other sites for what he’s said will be the biggest-ever chip facility, Jensen said pitting counties against each other could be Musk’s way of pushing for the best offer.
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“Originally I thought he said it was going to be in Travis County and now we’re talking about more than one location. This is a great strategic decision by Tesla to make sure those competitors are potential other communities,” he said. “It’s not just that other communities might be willing to offer something different, but the fact that you’ve generated competition across counties by making this announcement.”
Residents question need for tax breaks
Some Grimes County residents questioned why SpaceX, a company seeking a $1.75 trillion valuation when it goes public in a few months, is asking for tax abatements at all, arguing the company could afford to pay its share.
Still, other attendees encouraged commissioners to offer such giveaways to entice the project to locate in the area, hopeful that an abatement agreement would establish local hiring preferences, job training partnerships with schools, environmental safeguards and clawbacks if requirements aren’t met, as just happened in Travis County.
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“If the company builds without an agreement, we still experience the growth, the traffic and the demand on services, but we lose the ability to shape how the project integrates into our community,” a public commenter from the Iola-Keith area in Grimes County told commissioners. “We lose the guardrails, the accountability and the benefits that come from a negotiated partnership.”
When Musk announced the project in late March in Austin, he said several locations were under consideration for the 100 million-square-foot facility he envisions. The public notice for Wednesday’s public comment session was the first indication of its possible site.
County commissioners are expected to consider a property tax abatement agreement for the facility June 3.
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