Sherman creates TI investment zone, sets stage for tax abatements
Sherman is taking the first steps toward offering Texas Instruments incentives and tax abatements toward a proposed new $29.4 billion production plant in Sherman.
The City Council unanimously approved the creation of a new industrial reinvestment zone for the Texas Instruments property in anticipation of a formal agreement between the city and TI later this month.
In August, the tech manufacturer announced that Sherman is one of two finalist cities being considered for a new silicon wafer production plant that could see nearly $29.4 billion in investment and the creation of 4,000 jobs over the course of 17 years. Since that time, the taxing entities that cover TI have considered a series of incentives aimed at encouraging TI to invest in the city.
"Given the long-term trend of semiconductors growth in electronics, TI has a roadmap that continues to strengthen our manufacturing and technology competitive advantage for the next 10 - 15 years to give us lower costs and greater control of our supply chain," a spokesperson for TI said in August. "As part of our long-term capacity planning, we are evaluating options for a future factory with the potential for expansion over time to meet the growing needs of our customers. Sherman, Texas is one of the possible options we are considering."
The Sherman Independent School District was the first entity to consider and take early action on abatements for the production plant. In August, the district accepted an application for tax valuation limitations that would cap the amount of taxable value the company would have for the purposes of district property taxes.
The district is currently evaluation the application and is expected to decision on forwarding it to the Texas State Comptroller later this year.
With the City Council's action, Sherman is setting the stage for the city to offer incentives of its own.
"This is the first step in granting a tax abatement to TI for their project to add nearly $30 billion in value," Sherman Finance Director Mary Lawrence said.
City Manager Robby Hefton said the creation of the zone, which encompasses all of the TI property, doesn't give any incentives or abatements on its own. However, it is needed in order for the city to offer abatements.
City Council member Willie Steele asked if there were any implications for the zone if the project does not move forward in Sherman. Hefton said the zone naturally will expire after five years.
"There is a scenario likely that they come and want to do phase two, but if they want to do phase two longer than five years from when this is enacted ... they would have to reauthorize that for another five year period," Hefton said.
If the project moves forward, the first phase of development could start as early as 2022 with an anticipated investment of $6.5 billion.