Clearing 4 hurdles: Breakdown of region's TI incentive packages

Michael Hutchins
Herald Democrat
All four of the taxing entities over the Sherman Texas Instruments Plant have finalized incentive agreements for a proposed expansion of the site.

Now that Sherman Independent School District has approved its incentive package for TI, the tech manufacturer is expected to make a decision on whether it will continue to call Sherman home as early as this week.

So, what is the region offering TI to bring the proposed $29 billion expansion project to Texoma?

More:New TI plant could bring $29B investment

Here is a breakdown of all four incentive agreements.

1. Grayson College

Grayson College, which approved its own incentives late last month, is similar to  SISD in that it will be offering a 10-year abatement for each of the phases, once constructed. These abatements will be valued at 50 percent of the tax revenues of each of the phases independently.

"Grayson College is excited that Texas Instruments — a strong industry and education partner — is considering Sherman," GC President Jeremy McMillen said in a statement Tuesday. "We look forward to partnering with them to provide training needed for their workforce. Their investment in building our community is significant, and we are proud to be considered."

2. City of Sherman

The final two agreements will come in the form of 30 years of abatements and tax rebates for  each phase of the project. Sherman is offering the company a 10-year 90 percent abatement of its property taxes followed by a 20-year rebate of those taxes.

Even with the abatement and rebate, City Manager Robby Hefton said the $29 billion project will have a significant impact to Sherman's coffers over the lifetime of the facility.  By comparison, the city's taxable value currently sits at around $4 billion, he said.

"Honestly, it is hard to wrap your mind around how big this is," he said. "We are talking billions of dollars to Sherman's tax base."

"Mind you, that is across multiple projects across many years, but it helps you get perspective of the scope of this project," he added.

Outside of the tax value, Hefton said that the project has other secondary benefits to Sherman that cannot be ignored. When combined with the city's other tech industries, Hefton said the TI deal could put Sherman on the map as a technology hub on the global level.

"We already have Globitech out here, Finisar — II-VI, and  TI, of course, still has its plant here that it will be shutting down," he said. "There is already a very successful center for tech here, but I think this will put us on the map globally."

 Other benefits include the sale of utility services to the site, which is poised to be one of — if not the largest customers for water and sewer services. Previously, city officials said that large customers can be used to offset price increases for residential customers, resulting in low rates for residents.

More:TI gets 90 percent abatement, rebate agreement from Sherman

3. Grayson County

Like Sherman, the county itself is offering 90 percent abatements followed by rebates for each of the phases of the project. 

"For those of us who were here when TI was here in the 70s and 80s, today is a huge day," County Judge Bill Magers said. "This means fantastic job opportunities, it means a tremendous tax base."

Magers responded to some who have referred to the incentives being offered as corporate welfare, noting that these agreements are simply to assist the county in being competitive on a global scale.

Magers also viewed the possible plant as a boon not for Sherman or Grayson County but instead for all of the region. Magers said he has received letters from Fannin County in support of the project based on the scale of the impact such a development would have.

"When you have 3,200 good-paying jobs it ripples across the region," he said.

More:Two down, two to go: Grayson County approves Texas Instruments incentives

4. Sherman Independent School District

The application was made under Chapter 313, which allows school districts to put a 10-year cap on property tax revenues from a property for major capital investment for prospective businesses who are considering locating in a community.

The agreement is particularly focused on large investments of more than $1 billion.

"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 an emailed statement in September. "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."