Big deals in Texas

By SHERYL JEAN
Staff Writer sjean@dallasnews.com

ECONOMIC SNAPSHOT | MEGADEALS

State and local governments across the U.S. spent $64 billion, or an average of $456,000 per job, to recruit and retain businesses in so-called megadeals worth $75 million or more, according to a recent report by Good Jobs First, a Washington, D.C.-based nonprofit. It identified 240 economic development megadeals in the last 35 years. The number and cost of such subsidy packages are rising, up fivefold since the 1990s.

Texas megadeals
Texas deals commonly include property tax abatements, tax increment financing and grants from the state, counties, cities and school districts. But they sometimes include infrastructure, site preparation, sales tax rebates, and job training and services. The top Texas deal of the last three decades was to a retailer. Amazon.com (2012) Distribution centers Subsidy: $269 million Jobs promised: 2,500 Summit Power Group (2011) Coal power plant with carbon capture Subsidy: $91.6 million Jobs promised: 100 Statewide FedEx (1996) Air cargo hub Subsidy: $250 million Jobs promised: 1,016 Nebraska Furniture Mart (2011) Megastore and related development Subsidy: $802 million Jobs promised: 850

RadioShack (2002) Corporate headquarters Subsidy: $96 million Jobs promised: 2,400
Ector County Fort Worth

The Colony Richardson

Texas Instruments (2003) Semiconductor plant Subsidy: $600 million Jobs promised: 1,000 Anadarko Petroleum (2012) Office tower Subsidy: $175 million Jobs promised: 450

Samsung (2006) Semiconductor plant Subsidy: $233.4 million Jobs promised: 900 Samsung (2012) Semiconductor plant Subsidy: $83.6 million Jobs promised: 25
Austin Buda San Antonio The Woodlands

Motiva Enterprises* (2006)

Port Oil refinery expansion Arthur Subsidy: $257.4 million

Jobs promised: 250

* Motiva is a joint venture of Royal Dutch Shell and Saudi Aramco Co.

Toyota (2003) Auto assembly plant Subsidy: $133 million Jobs promised: 2,000

Cabelas (2004) Stores (Fort Worth and Buda) Subsidy: $113.8 million Jobs promised: 600

Where are the most megadeals?

Michigan had the most megadeals in the past 35 years. Texas had 12, tying with Ohio. Overall, 40 states plus Washington, D.C., have done at least one megadeal. None 1-4 5-8 10-12 More than 20

Who has spent the most?

New York had the most state and local spending to attract companies and jobs, totaling nearly $11.4 billion. Texas was one of five states in the $3 billion range. Rank/state 1. New York 2. Michigan 3. Oregon 4. New Mexico 5. Washington 6. Louisiana 7. Texas 8. Tennessee 9. Alabama 10. Mississippi 11. Pennsylvania 12. Minnesota 13. Missouri 14. North Carolina 15. South Carolina Total cost (in billions) $11.38 $7.10 $3.52 $3.38 $3.24 $3.17 $3.10 $2.51 $2.41 $2.31 $2.10 $1.78 $1.74 $1.57 $1.56

Michigan: 29

Texas: 12
NOTE: Excludes sports arenas. SOURCES: Good Jobs First; Texas Comptrollers Office; Texas Governors Office

The bottom line

Early megadeals were manufacturing assembly plants and those were good jobs, but many of those deals today are extremely capital-intensive and dont create as many jobs. It really begs the question of whether taxpayers are breaking even on these deals. Greg LeRoy, executive director, Good Jobs First At the state level, no Texas Enterprise Fund deal by itself has ever reached the $75 million threshold used in this report, and its important to note TEF incentives include claw-back provisions requiring repayment if job creation or investment targets are not met. Aaron Demerson, executive director, Texas Office of the GovernorEconomic Development and Tourism Some states, such as Texas and Ohio, have formed public-private partnerships to focus on economic development and job creation. These organizations should be required to disclose their funding, spending and results.

Sheryl Jean, staff writer, The Dallas Morning News