Amazon is coming to Dog's Head

After months of speculation, the city has revealed the unnamed Fortune 100 company hoping to build an advanced manufacturing robotics facility in the Dog's Head. It's Amazon.

The facility will account for 11% — 300 acres (!) — of the entire Dog's Head site. It is expected to be operating by Q4 of 2027, said Assistant City Manager Eric Johnson, the Broadnax administration's point man on the project, at a City Council work session today.

Despite its massive footprint, the facility itself is only anticipated to directly employ 300-500 people.

Council members learned this today just two days before they are set to vote to approve the Tax Incremental Reinvestment Zone upon which the Amazon plant and a massive new commercial and residential development by Endeavor Real Estate is premised.

"This is absolutely a good deal for the city," said city Director of Financial Services Kim Olivares, highlighting the $26 billion of taxable value the city has projected it will generate over the next 40 years.

However, I certainly wouldn't say the city's financial projections align with Johnson's earlier description of the Dog's Head as a "fiscal lifeline."

According to these figures, the city will only break even in the first decade of the TIRZ. The new tax revenue generated by the development will roughly equal the cost of providing services to the 2,600 additional acres the city is absorbing.

The site is projected to generate far more tax revenue than what is listed above, but for the first 20 years of the TIRZ, 75% of the revenue will be devoted to paying off the substantial infrastructure investment.

The greatest fear with a deal like this is that the city builds the infrastructure but the area doesn't end up developing as anticipated, leaving taxpayers paying for roads to nowhere. Amazon pulls the plug on its factory. Or godawful flooding deters people from wanting to live or set up business there. Or Austin's population growth, which has already slowed in recent years, slows further. Or all of the above.

Olivares said the city is constructing "multiple guardrails" to ensure that taxpayers aren't investing in a bad deal. The city, not the developer, she said, will decide if and when to issue debt to build infrastructure.

"If there is a concern about the fiscal health of the TIRZ and its ability to meet debt service obligations, we do not consent to debt issuance," she said.

Similarly, if the development doesn't grow as rapidly as expected, it will produce less tax revenue but it also won't demand as much in city services, she said. Specifically, the city is only expecting to deploy a "handful" of police officers to the area in the first decade of the development, but can dial that back if there are fewer residents and businesses to serve.

For the most part, Council members don't seem too worried. Most of their comments and questions sought to assuage concerns about corporate welfare and environmental protection.

Jose Velasquez, reading prepared questions, voiced some concerns about the proposed six-lane extension of Montopolis Blvd displacing long-time businesses, such as the Montopolis Supply Company, and said he wanted firmer commitments on affordable housing. It looked like he was just going through the motions though.

The only sustained skepticism came from Mike Siegel, who grilled staff on the financial risks and expressed concern about Travis County's role in the project. County leaders have been lukewarm on the deal and have not yet committed to participating in the TIRZ. While only 25% of new city tax revenue would go to the city general fund in the first two decades of the project, the county is being offered a bigger chunk of the new revenue: 50%. It has a policy of never accepting less than 50% in a TIRZ.

Real Estate Division Chief Trish Link replied that the city would get to own the roads.

"Is that a good thing," asked Siegel. "To own the roads?"

(I would say it depends what kind of roads. Urban streets are assets. Freeways are liabilities)

What explains the contrast between Council's relatively warm reception and the contempt for Big Tech expressed by national progressive politicians? The first is that, contrary to what the umpteen anonymous trolls on Austin Twitter insist, most elected officials in Austin aren't particularly left-wing. The second is that local government is not abstract and doesn't have the ability to deficit spend. The city's budget crunch has forced leaders to contend with the fact that economic growth is the only way for the city to maintain — let alone bolster — public services.

It looks like this is going to get approved. If they are serious about making this a dense urban development, then it might end up being a great deal. But right now the proposed road network does not scream Mueller 2.0. It screams Cedar Park 2.0. Hopefully they fix it.

An update from Vanessa Fuentes

Council Member Vanessa Fuentes announced today that she is being treated for Stage 2 breast cancer. She was diagnosed shortly before giving birth in early May. Here is a portion of a statement she posted, the rest of which you can read on her Facebook page:

At 37 weeks pregnant, I learned that I had Stage 2 Breast Cancer. As this medical diagnosis came toward the tail end of my pregnancy, I immediately asked if my baby was okay and if I would be able to deliver her safely. Fortunately, thanks to my incredible labor and delivery team, I delivered her safely on May 5th. Baby Vivienne is healthy and growing fast!

I encourage women to be proactive with their health, even before the recommended mammogram age of 40. At seven months pregnant, I felt a lump in my breast and flagged it at my next OBGYN appointment. By acting quickly, we caught the cancer before it spread. It’s so important to trust your body. If something feels off, get it checked. Early detection saves lives. 

Fuentes says she is "about halfway" through chemotherapy treatment and plans to return to work on Monday.

Wow. Becoming a mom and recovering from childbirth is tough enough. To deal with cancer treatment on top ... It's great to see her doing well.

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