The Amazon Effect: Biggest incentive deals in Texas history

The Texas Enterprise Fund has doled hundreds of millions of dollars since its inception nearly a decade and a half ago. But, the incentives haven’t been given out at the same volume under Gov. Greg Abbott that they were under his predecessor, Rick Perry. 

Of the Top 5 largest TEF grants awarded, only Toyota’s relocation to Plano was awarded this decade. These sorts of grants promised a few thousand jobs. For reference, Toyota’s $40 million relocation grant promised 3,650 jobs. Amazon’s much publicized HQ2 is boasting upwards 50,000 high-paying jobs. 

That leads many to wonder — how much money would Amazon get from the state of Texas? Here’s a look at some of the most notable in state history:

Texas A&M and Lexicon Pharmaceuticals

Two grants tied for the largest Texas Enterprise Fund investment, and they both involve universities. The goal of the Texas A&M Institute for Genomic Medicine was to accelerate the pace of medical discoveries through research. To date, there are more than 50 peer-reviewed publications featuring the institute’s mice or cells, according to its website.

UTD/Texas Instruments

Another $50 million grant from the Texas Enterprise Fund was given to the University of Texas at Dallas and Texas Instruments in November of 2004. The grant went toward the construction of two facilities, TI’s new $3 billion chip fabrication plant and UT Dallas’ $85 million Natural Science and Engineering Research Laboratory.

RELATED: Click here to see the states that have pledged the most taxpayer subsidies in support of Amazon. 

Toyota North America

The much-publicized relocation of the world’s largest auto manufacturer’s North American headquarters is one of the largest Texas Enterprise Fund grants ever. The City of Plano also forked over a $6.75 million incentive package to Toyota to further entice them. This is the only Top 5 TEF grant to be announced in the last decade and the largest Gov. Greg Abbott’s office has awarded.

Sematech

Sematech was a consortium formed to revitalize the U.S. semiconductor industry in the 1980s. The hefty grant from Texas was to prevent the company from moving jobs from Austin to New York. It didn’t work, as Sematech ended up relocating all of its remaining Austin jobs to Albany, New York in 2010. Watchdog groups called on the governor’s office to investigate the company in order to get back the $40 million investment.

Triumph Aerostructures

The original $35 million grant was paid out to Vought Aircraft Industries, which was then acquired by aerospace supplier giant Triumph Group in 2010. Vought was ordered to pay back $7 million of the grant for failing to meet job requirements, according to an audit. Triumph later closed the Dallas plant on Jefferson Street, and constructed a new facility in Red Oak, Texas where it remains the company’s flagship plant and employs about 1,100.

MORE CONTENT: THE AMAZON EFFECT

INTERACTIVE U.S. MAP: Tracking Amazon's rapidly expanding footprint across the country. 

NORTH TEXAS MAP: Here are the top sites in DFW for Amazon’s proposed HQ2. 

DFW PROS AND CONS BY CATEGORY: Ranking North Texas by Amazon’s preferences. 

AROUND THE COUNTRY: From Miami to Seattle, here’s how Amazon is impacting other cities. 

WHY OTHERS FEEL HQ2 IS COMING TO THEIR CITY: The Business Journals have been speaking to experts on the ground to get a local take on why their city was best situated to land HQ2. 

ABOUT THIS PROJECT

For the past nine months, The Business Journals and its 40 newsrooms, including the Dallas Business Journal, have made a concerted effort to document the systematic expansion of Amazon.com Inc., from Class A office spaces in the nation's largest cities to former cornfields and barren industrial spaces long abandoned by industries of old. 

The company's growth, while massive in scope, as hinged on negotiations with local officials, deals with local real estate developers and tax breaks blessed by local municipalities. In short, it's all local. 

This project is both near term and forward looking in scope, and sets off to identify where this Seattle-based company's unrelenting expansion might be headed. It's as much about Amazon's end game as a business entity as it is about the long-lasting effect it is likely to have on America for decades to come.

The Dallas Business Journal is a content partner with WFAA, which also is working to document Amazon’s search for its proposed second headquarters. Watch WFAA’s 10 p.m. broadcast for Jason Wheeler’s report.

© 2017 WFAA-TV


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