SAN ANTONIO – The City of San Antonio is trying to lock down a $2 billion expansion of the Toyota plant with a nine-figure bundle of incentives at the same time it tries to close a similarly sized hole in its own budget.
The San Antonio City Council will vote Thursday on $122.1 million worth of tax breaks, job training grants, fee waivers and infrastructure improvements as well as recommending them for another $20.7 million worth of help from the city’s power and water utilities.
In return, it hopes to bring in thousands of good-paying jobs.
Toyota, which opened its South Side plant where it currently assembles the Tundra and Sequoia in 2006, is deciding where to place a new vehicle assembly line in a “highly competitive” selection process.
The company has not said what model the new line would produce or what other locations it’s considering.
The city’s proposed incentives include:
- A 10-year property tax break worth an estimated $88.1 million
- Road and intersection improvements with $24.5 million of city money
- Worker training grants worth up to $9 million
- City fee waivers worth up to $500,000
The city would also endorse Toyota for a CPS Energy program that could reduce the company’s electric rates, worth $16.3 million, and recommend it for $4.5 million worth of San Antonio Water System fee waivers.
But on the same day council members vote on the incentive package, they’ll also receive a briefing on a “trial” budget that is expected to include insight on how the city can close a $131 million budget deficit projected for the 2028 fiscal year.
Belinda Román, an associate professor of economics at St. Mary’s University, told KSAT the Toyota expansion would be a “significant’” project and that the city would have already done its analyses, “So, yes, they can afford it.”
“The question is going to be: Does it play out the way it looks like on paper?” she said.
As part of the deal, Toyota would create 2,000 full-time jobs earning at the least the county’s average annual wage — currently $32.46 per hour. Román noted other strings included in the incentive package, like required spending on training, transportation or childcare for employees.
She thinks money from the project will make its way through the local economy and believes the city’s taking a long view on the investment.
“The calculus here is, ‘OK, we’re going to invest in this because the growth around it is going to be what we’re interested in, perhaps even more permanent,’” she explained.
The city’s Economic Development Department declined to comment for this story.
San Antonio’s not the only one flashing cash at Toyota, trying to bring an expansion to the South Side.
Bexar County is scheduled to discuss its own 10-year, $55.3 million tax break proposal next week, and Southwest Independent School District has indicated its support for a break of its portion of Toyota’s property tax bill.
San Antonio is also expected to nominate Toyota for a Texas Enterprise Zone (TEZ) “Triple Jumbo” project, which could allow it to get up to $3.75 million worth of state sales and use tax refunded.
Previous coverage of this story on KSAT: