A company looking to set up shop in San Antonio — and get incentives from the city in the bargain — will have to meet some added requirements in the future, including paying higher wages.
The City Council recently approved new guidelines in its policies meant to attract businesses to San Antonio, or spend more to expand here through incentives, rebates and tax abatements.
An update to the Economic Development Incentive Program, a process that occurs every two years, spells out tax abatement and rebates based on the level of capital investment a company makes, the number of people it will employ and the wages it pays.
The updated program bumps the hourly wage requirement from $17.50 to $18 for all jobs. In addition, 90% of the jobs must pay at least 80% of the San Antonio median salary, an increase from $20.54 to $22.92 an hour.
The program also addresses standards that companies considered power-intensive users — projects using 40 megawatts or more of electricity — must meet. Such users will be required to employ 200 people to be eligible for incentives.
In a reflection of the times, the updated policy also now states that companies seeking Chapter 380 agreements, which provide loans or grants, must require employees to spend at least 60% of their annual working hours onsite versus working remotely.
For the state’s Chapter 312 tax incentive program, no more than 5% of a company’s full-time jobs can be hybrid/remote.
After a council briefing in November, several more new measures were added to the policy as well, said Brenda Hicks-Sorensen, director of the city’s economic development department.
Going forward, the incentive program also requires applicants to participate in the city’s workforce development program, Ready to Work, and hire at least 30% of its local workforce from within the city, its extraterritorial jurisdiction or Bexar County.
The city’s economic development staff also added a provision that requires companies to submit a safety plan that includes heat-related training.
Companies also must report their contractor’s experience modification rating, a numerical value used by insurance companies to gauge how safe a company is compared to others in its industry.
Hicks-Sorensen also showed the council how San Antonio’s incentive program stacks up to other municipalities in the state and nationally in their requirements and incentives offered.
The policies are geared toward bringing high-wage jobs to San Antonio, strengthening competitiveness with other cities, establishing objective metrics and providing streamlined processes for site selectors, according to the briefing Hicks-Sorensen presented to council.
“These incentives are so important to the work that we’re trying to accomplish here in San Antonio, which is to bring jobs to the region that are changing trajectories for families throughout San Antonio,” said Sarah Carabias Rush, chief economic development officer at Greater:SATX.
In the last four years, the San Antonio region has attracted almost $6 billion in capital investment resulting in almost 24,000 jobs. A list of the city’s active incentive agreements and programs with companies like JCB and Microsoft can be viewed here.
“We need to make sure that our policies are as business-friendly and easy to work with as we possibly can so that we’re not getting eliminated before we even get a chance to have a seat at the table,” she added.
District 7 Councilwoman Marina Alderete Gavito said the city needs to “be careful not to make it too difficult to do business here.”
“I think there’s a fine line that we have to walk. … I also want to make sure that we give the experts the time and the space that you all need to do all those jobs well,” she added.
Another member of the council also wanted to see latitude applied to the process.
“If your organization is told, ‘No, I’m sorry we’re not going to come to San Antonio because your guidelines are a little too tight,’ just please let us know,” said District 8 Councilman Manny Pelaez. “Because then we can talk about the nuance, we can talk about the context of those conversations, and then if adjustments need to be made, we can be flexible.”
