Samsung Deciding Between Sites For $17B Factory, Seeking $1B Incentive Package
The world may be almost unrecognizable compared to when Amazon held its controversial HQ2 sweepstakes, but another tech giant is seeking a massive incentive package in exchange for a transformative project.
In this case, the tech giant is a subsidiary of Samsung Electronics, which is planning a $17B factory with an estimated 1,800 workers and is deciding between potential locations, CoStar reports. The final selection is reported to be between Austin, Texas, Phoenix, upstate New York and Samsung's home country of South Korea.
The subsidiary's name, Samsung Semiconductor Austin, suggests Texas' capital city has the inside track, and Samsung has already applied for $1B in tax incentives with the state in a filing made public last week, CoStar reports. The application, which required a $100K filing fee, indicated a 360-acre site had already been selected for a 7M SF complex, which could begin construction in as little as five months.
Samsung estimated in its application that it would invest over $5B of its own capital into the real estate portion of the project, CoStar reports. If upstate New York is indeed on the table, the possibility is strong that New York Gov. Andrew Cuomo would be in support of considerable financial incentives to lure Samsung.
Even though the deal Cuomo helped broker with Amazon was canceled in February 2019 due to overwhelming political backlash, later that year his administration approved $500K in tax incentives to a $1B semiconductor factory from manufacturer Cree. Senate Majority Leader Chuck Schumer has previously lobbied for Samsung to place manufacturing operations in his home state of New York as well, CoStar reports.
More relevant than Amazon HQ2 for comparison in recent history could be Wisconsin's ultimately disastrous deal with Chinese tech manufacturer Foxconn, wherein $4B in lightly protected incentives was promised to a $30B factory complex that has since been almost entirely scuttled.
Though citizens and local elected officials in many parts of the U.S. have grown more suspicious of tax breaks for large companies promising job-creating real estate projects, they are still a widely used tool for economic development. Proponents say if they are crafted the right way, incentive packages can still be the win-win deals they have often been promised to be.