DEPARTMENT: Economic Development Department
DEPARTMENT HEAD: Rene Dominguez
COUNCIL DISTRICTS IMPACTED: District 6 and City-wide
SUBJECT:
An ordinance approving a 15-year Chapter 380 Economic Development Tax Reimbursement Agreement with Microsoft Corporation
SUMMARY:
This ordinance authorizes execution of a 15-year Chapter 380 Economic Development Agreement with Microsoft Corporation to reimburse a minimum of 40% of City of San Antonio ad valorem property taxes commencing in 2016.
BACKGROUND INFORMATION:
Microsoft Corporation, founded in 1975 by Bill Gates and Paul Allen, is headquartered in Redmond, Washington. The company is ranked 35 on the 2013 Fortune 500 list and is a worldwide leader in software development, services, and solutions. Microsoft employs 90,000 and the technology company reported net revenues of $77.31 billion and net income of $22.12 billion for fiscal year ending June 30, 2013.
On January 18, 2007 City Council approved a 10-year, 100% Tax Abatement of Microsoft's real and personal property improvements to successfully compete for Microsoft's initial data center project. Microsoft's initial investment consisted of $550 million and the creation of 75 high-paying jobs. Council also approved a grant from the CPS Energy (CPSE) Community Infrastructure and Economic Development (CIED) Fund to help pay for required electrical infrastructure costs. As a result of the 2007 agreement, Microsoft constructed a 400,000 sq. ft. datacenter, has invested over $840 million in real and personal property and has surpassed all job creation milestones to date.
Microsoft is currently considering San Antonio, and other sites in the Southwest for a new data center project consisting of an investment of $250M in real and personal property over five years and the creation 20 high wage jobs.
To secure the new Microsoft data center expansion project and attract future investment, staff recommends (1) a 15-year Chapter ...
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