One of the largest and most expensive projects in the nation could become even bigger with a small town north of Austin, Texas, approving expanded parameters for Samsung's $17 billion semiconductor plant.
The City Council in Taylor, Texas, voted to approve Samsung's request to expand the land boundaries of its semiconductor plant on July 14. Council members also approved two new incentive deals, one of which calls for the city to receive revenue from any so-called use tax that Samsung would pay.
A use tax is assessed based on where a product is used. So when Samsung orders a product, the assessed tax would be based upon its use in Taylor.
The chip manufacturer and electronics company has multiple agreements with the city of Taylor and Williamson County — where Taylor is located — to cover the costs of infrastructure it needs for the $17 billion semiconductor plant. All those agreements are now consolidated into one accord after the council’s vote on Thursday.
Samsung selected Taylor last year for its semiconductor plant over sites in South Korea; Phoenix, Arizona; and Buffalo, New York. Samsung was offered $27 million in incentives from the state's Texas Enterprise Fund, which is a program created by the state Legislature in 2003 to lure major capital projects to Texas. That's more than the $25 million the state program offered to Apple for its Austin expansion announced in 2018.
Samsung has started site work in Taylor where it purchased at least 1,200 acres to build the plant, which is expected to create thousands of construction jobs and be a boon for the surrounding area. Taylor is a small city of about 17,000 people on the northeastern edge of the Austin metropolitan area.
Jesse Ancira, the former Taylor mayor who now serves as a consultant for Samsung, told council members the Samsung deal is fluid and evolving but would prove to be a win for Taylor, which is about 30 miles northeast of downtown Austin.
“This is one of the largest investments in the country, certainly the largest in the state,” Ancira said. “This is a fluid negotiation. The project is fluid. A project of this magnitude is going to change. A project this large is going to have amendments,” he continued.
One council member voted against the incentives portion of the Samsung agenda item.
“This is nothing new. This use tax was discussed,” said Council Member Dwayne Ariola, who supports the Samsung project overall. “I knew, that as a council, as a city, as a constituent, we were never going to pay for infrastructure. We couldn’t afford it.”
Ariola added he thinks the electronics company needs to do more than approach the city for incentives.
“I welcome Samsung, but it’s a two-way street and a two-way partnership. We keep being asked to give and give and give. I don’t want to offend you, but I am tired of giving the constituent tax money,” Ariola said. “I know the potential, I get it. I know you want to grow. You didn’t buy 1,200 acres or 1,400 acres to stop growing, I get it, but the agreements were the agreements.”
Ariola, despite his vote against the incentive agreement agenda item, joined his four other colleagues in supporting Samsung’s request for additional land.
No details were shared about what Samsung plans to do with the additional land. A spokeswoman for Samsung did not immediately respond to an email request for comment from CoStar News.
The Taylor council also approved an economic development performance agreement. The agreement creates a relationship between Samsung and the Taylor Economic Development Corp., where the agency ensures the electronics company would deliver on its promise to create new jobs and make capital investments.
Samsung and Taylor entered into an incentive agreement in November last year, opening the door for the electronics company to build the semiconductor plant in the town. The original incentive agreement called for Samsung to complete 6 million square feet of construction by the end of 2028 and create more than 2,000 jobs within a seven-year period.
The incentive agreement also called for Samsung to install water and sewer facilities on its site at its own expense.