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San Antonio City Council members are expected to consider in December a retooled economic development framework that could keep the city in contention for more corporate relocation and expansion while raising the income and investment benchmarks for companies seeking public incentives.
"A lot of times, we don't even have a seat at the table," Brenda Hicks-Sorensen, director of economic development for the City of San Antonio, said. "We want to stay in the game as long as possible.”
Backers of the plan believe the changes will address unintended consequences stemming from a current approach that’s been too vague, causing San Antonio officials to exhaust time and resources clarifying policy while competing cities are submitting proposals. What stakeholders are seeking to combat, according to Hicks-Sorensen, is “site elimination" early in recruiting.
That means having a clearer incentives strategy that allows San Antonio to better compete with its peer cities, including Charlotte, Denver and Nashville, as well as multiple Texas markets.
The proposed framework focuses on target industries, including IT security and infrastructure, sustainable energy, corporate services and biotech, among others. It also addresses current economic inequities, including areas of the city that have traditionally been overlooked.
The backbone of the proposed framework is greater clarity — for the city and for prospect companies.
“We want to make sure that we're being very transparent,” Hicks-Sorensen said. “In prior policies, there were always some nuances that were negotiation points.”
The new plan also includes some significant changes in the benchmarks companies will need to hit to qualify for incentives. Under the current policy, for example, companies must commit to creating at least 50 new jobs or investing at least $10 million to be considered for tax abatements or rebates. Under the proposed framework, companies would need to meet both criteria.
The city’s current wage requirement for incentives consideration is that 100% of the jobs created pay a minimum of $13.34 an hour and 70% pay at least $18.25 per hour. Under the new proposal, 100% of the jobs would need to pay at least $17.50 per hour and 90% would need to meet a minimum threshold of $20.54 per hour.
The proposed plan will create a checkbox of sorts, based on new matrices that will take into consideration multiple factors, including whether a project is proposed for an underserved area.
“We really want to make sure that it is absolutely as objective as possible, moving away from some of those things that could be more subjective,” Hicks-Sorensen said.
The proposed changes align with a broader economic development strategic framework recently approved by City Council.
Asked what stands out most about the proposed changes and how they could impact future negotiations, Assistant City Manager Alex Lopez said, “The clarity — on both sides.”
The city has sought input from key stakeholders, utilizing their feedback from a perception survey in the crafting of the new recruitment strategy.
“Over 200 site consultants were engaged,” Lopez said. “There were another 100 real estate brokers, consultants who had actually done projects in San Antonio, or tried to in the last five years.”
The new plan does include some wiggle room for what city officials characterize as catalytic projects that may require more high-level negotiations and additional assistance. But such companies would need to meet a higher threshold, including minimum pay, jobs created and capital investment.
The overall intent of the proposed changes, according to Lopez, is to put San Antonio in a more competitive position.
“We want to be proactive,” she said.
City Council could act on the proposed changes as soon as Dec. 1. If approved at that time, the new policy could be implemented as soon as Jan. 1.