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California-affiliated company considers billion-dollar investment near Texas A&M

A company affiliated with San Francisco-based Substrate Inc. could invest billions of dollars and create 2,000 jobs by building a state-of-the-art semiconductor manufacturing facility in Texas.

A filing with the Texas State Auditor General shows that an organization called America’s Foundry Bryan, LLC is seeking tax relief under the recently introduced Jobs, Energy, Technology and Innovation Act for a 275,000-square-foot project on 117,000 acres of land owned by the Texas A&M University System at Bryan.

The potential investment is described as “the first state-of-the-art, pure-play foundry manufacturing project of its kind designed to bring low-cost semiconductor manufacturing back to the United States,” the filing said.

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America’s Foundry Bryan had already received tax breaks from the Bryan city government earlier this month for the project, entitled “Project Factory One.”

The facility would be located on an undeveloped portion of Texas A&M University’s RELLIS education and research campus in Brazos County.

Substrate has entered into an agreement with Texas A&M and “thereby signaled interest in a joint investment,” the application said.

The scope of the project would entail a total investment of more than $12.6 billion over the six-year construction period. The project is scheduled to start in the fourth quarter of this year.

The proposal states that a total of 2,000 permanent jobs are to be created by 2035. The required investment in buildings, machinery and equipment amounts to a whopping $108 billion over a period of 40 years.

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In addition, the original project would create over 2,000 jobs in the construction industry.

The average starting annual salary is in the six-figure range and continues to rise with the number of jobs.

The JETI Act is the state’s replacement for the controversial Chapter 313 tax abatement program.

The JETI Act allows businesses to rebate 50 to 75 percent of their property value for 10 years if a job-creating project is located in an Opportunity Zone. In comparison, Chapter 313 provides 100 percent rebates on school district taxes.

This project, located in an Opportunity Zone, is part of the Bryan Independent School District.

Twelve states offered incentives for the plant, but three states, including Texas, are considered the strongest competitors.

While the startup said it could not disclose information about potential bids from Oregon and New York due to nondisclosure agreements, those states stand out in the location selection because of their focus on semiconductor manufacturing.

The application specifically mentioned New York’s package for semiconductor manufacturer Micron Technology. Texas lost Micron’s $100 billion investment to the northeastern state a few years ago, which is a sore spot for many economic development players in Texas.

However, the JETI program in Texas is attractive to American Foundry Bryan. The company said the JETI program offers the company greater benefits than the incentive program in New York, but without the benefits of the JETI program, the New York program is significantly more beneficial to the company’s property tax bill.

Substrate is also seeking tax credits in Brazos County, as well as grants and funds from the Texas Semiconductor Innovation Fund, the Texas Enterprise Fund, the Texas Enterprise Zone Project Designation, the Texas Skills Development Fund, and the United States CHIPS Incentive Program.

If the project in Bryan is realized, the city would waive 80 percent of the taxes in the first five years of the agreement with the company and 50 percent in the following five years.

The ten-year period for which America’s Foundry Bryan is seeking tax relief under the JETI Act – the school years between 2030 and 2040 – affects properties with a taxable value of over $10 billion to over $11.5 billion for a single year.

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