Texas
California-tied firm eyes billions of dollars in investment near Texas A&M
An entity tied to San Francisco-based Substrate Inc. may invest billions of dollars and create 2,000 jobs in Texas with the development of an advanced semiconductor manufacturing facility.
An application with the Texas Comptroller’s office shows an organization called America’s Foundry Bryan, LLC is pursuing tax breaks through the recently launched Jobs, Energy, Technology and Innovation Act for a 3 million-square-foot project on 288 acres of land owned by the Texas A&M University System in Bryan.
The potential investment is described as “a first of its kind bleeding-edge pure-play foundry manufacturing project bringing cost competitive semiconductor manufacturing back to the United States,” the application shows.
America’s Foundry Bryan already gained tax breaks from the Bryan City Council for the development, which has been titled “Project Factory One,” earlier this month.
The facility would be located on an undeveloped portion of the Texas A&M RELLIS Education and Research campus, located in Brazos County.
Substrate has entered into an agreement with Texas A&M, “indicating interest in a collaborative investment,” its application said.
The scope of the project would involve a total investment during the six-year construction period of more than $12.6 billion. The project’s proposed start date is slated for the fourth quarter of this year.
The application lists a total of 2,000 permanent jobs would be created by 2035, with a staggering capital investment of $108 billion over 40 years between buildings, machinery and equipment.
There would be more than 2,000 construction jobs associated with the initial project as well.
Starting average annual salaries will be in the six-figure range and escalate even as the job count grows.
The JETI Act is the state’s replacement for the contentious Chapter 313 tax abatement program.
With the JETI Act, companies can get up to 50% to 75% of property value abated for 10 years if a jobs-bolstering project is located within an opportunity zone. That’s compared to Chapter 313′s 100% abated on school district taxes.
This project, which is located in an opportunity zone, is within the Bryan Independent School District.
Twelve states offered incentives for the facility, but three states, including Texas, are the strongest contenders.
While the startup said nondisclosure agreements prevent it from divulging potential offerings extended by Oregon and New York, those states stand out in the site-selection process due to their emphasis on semiconductor manufacturing.
The application cited New York’s package for semiconductor manufacturing company Micron Technology in particular. Texas lost out on Micron’s up-to-$100 billion investment to the northeastern state a few years ago, a sore spot for many in the economic development game in Texas.
However, Texas’ JETI program is attractive to America’s Foundry Bryan. The entity said the JETI program provides the company a larger benefit than New York’s incentive program, but without the JETI program benefits, the New York program is significantly more beneficial to the company’s property tax bill.
The Substrate entity is also pursuing tax abatements with Brazos County, along with grants and monies tied to the Texas Semiconductor Innovation Fund, Texas Enterprise Fund, Texas Enterprise Zone Project Designation, Texas Skills Development Fund and United States CHIPS Incentive Program.
Should the project land in Bryan, the city would abate 80% of taxes for the first five years of the arrangement with the company, and 50% for the following five years.
The 10-year period that America’s Foundry Bryan is seeking JETI Act tax breaks for — the school years between 2030 and 2040 — involves real property with taxable value ranging anywhere from more than $10 billion to upward of $11.5 billion for a single year.
