San Antonio’s endless incentives for Microsoft help explain our lagging economic development
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Editor’s Note: This is CityScrapes, a column of opinion and analysis.
This time of year, it’s traditional for a column to look ahead at the prospects for San Antonio and the larger community going forward. But now, with the effects of COVID-19 still looming large, it is difficult to see ahead with any certainty.
Even so, looking back offers us some context for understanding where the city is headed.
Just a couple of weeks ago the Express-News reported on the city’s latest deal with Microsoft for a new data center — a deal granting the company a variance on the city’s tree preservation ordinance. Microsoft will be able to remove more than 2,000 trees from the site in the Westover Hills area, leaving just a small number of large trees. In return, the tech giant proposed planting 800 new ones and paying $1.4 million to the city’s tree mitigation fund.
Bending over backwards to accommodate Microsoft and its data centers has a long history in this town. City council approved a deal in 2007 that gave Microsoft a 10-year property tax abatement for the data center in exchange for the promise to create 75 full-time jobs.
Of course, these data centers are just big buildings that house racks upon racks of computer servers to run Microsoft’s Azure cloud services. They don’t need many employees. In fact, Microsoft shared in documents that 20 of those 75 jobs would be in “site security services” — onsite guards.
Yet, despite the modest number of workers the center planned to hire, local leaders gave it even more incentives via a lucrative tax abatement deal from Bexar County.
“This is not a gift to Microsoft … This is a gift to ourselves,” then-Mayor Phil Hardberger assured the community.
Six years later, Microsoft came back with plans for a $250 million expansion, and the city council — with just one no vote — approved a new, 15-year tax phase-in deal. This time, Microsoft put its job creation at just 20 new jobs.