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Tesla Acquires $5 Million Worth of Land Outside Austin To Build 'Cybertruck Gigafactory' (electrek.co) 86

Posted by BeauHD from the full-steam-ahead dept.
Tesla is acquiring $5 million worth of land outside of Austin, Texas to build its new factory. CEO Elon Musk refers to it as "Cybertruck Gigafactory" because it will be where Tesla produces its new electric pickup truck. Electrek reports: Last month, Electrek exclusively reported that Tesla's next factory is going to be in Austin. After our report, Tesla leaked that Tulsa, Oklahoma, was still in the running, but we were able to confirm that Tesla was already set to build in Austin, and it plans to move fast with hope to have a general assembly line for Model Y in Texas by the end of the year. Now we've learned that Tesla is buying a 2,100-acre piece of land (pictured above) just outside Austin to build the factory.

The land is currently occupied by a sand and gravel mining site, but Tesla is buying the location for just over $5 million which was revealed in an application with the Texas Comptroller's office. Electrek has learned that they have already started that process of relocation and Tesla's construction team is already getting ready to build on at this location, which is near the Austin airport. Yet, the purchase is not completely official until they secure approval from all the local authorities. The construction of the new Tesla factory is set to commence in Q3 of 2020 pending all approvals. Tesla is seeking approval from the local school district to forgive up to $68 million on its property tax bill over 10 years. It would be part of a wider incentive package with Travis County and the state.
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Tesla Acquires $5 Million Worth of Land Outside Austin To Build 'Cybertruck Gigafactory' More

Tesla Acquires $5 Million Worth of Land Outside Austin To Build 'Cybertruck Gigafactory'

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  • Where you pay the company for the privilege of them not paying taxes.

    • Where you pay the company for the privilege of them not paying taxes.

      From summary, you may want to read the whole thing:

      forgive up to $68 million on its property tax bill over 10 years

      A) That may well not be all the property taxes, just some.

      B) That's only covering property taxes, Tesla would be paying many other taxes in the area.

      C) I guess you don't think workers pay taxes?

      No matter how you look at it, with Tesla moving a factor there the region will be getting a massive BOOST in taxes. Simply letting T

      • The property taxes are racked up on this land. I don't get how $68m in property taxes accumulated over 10 years on a property worth $5m. Perhaps the land value is $73m and the land is toxic because of the tax burden. Perhaps Tesla is in a unique position to invest significantly locally, bargaining for a forgiveness of the property tax, and get the land at a heck of a price ($5m).
        • The forgiven amount may reflect the taxes on the improvements after Tesla builds.
          • The forgiven amount may reflect every possible theoretical and hypothetical tax and fee and levy that can be imagined in order to make the numbers bigger in the press release.

        • It's $5 million if Tesla doesn't come. Tax INCREAS (Score:4, Informative)

          by raymorris ( 2726007 ) on Thursday June 18, 2020 @10:07PM (#60200518) Journal

          The empty land is worth $5 million. Which means it produces maybe $90,000/year in property taxes. That's what Texas gets in taxes if Tesla goes to Oklahoma, $90,000/year.

          After (if) Tesla builds a state of the art giga-factory there, the factory is worth $200 million or whatever. The taxes on that would be a few million per year.

          Spending $200 million or whatever to build a new factory depletes the companies cash reserves, so it's advantageous for them to delay expenses such as property taxes for a few years if possible.

          With the deal, after the the first few years the government gets the much higher taxes. Plus taxes on the payroll, taxes on everything the employees buy with their Tesla paychecks, etc. At first, they just get the same property tax they are already getting on the property, plus the payroll taxes etc. So the government gets more total tax dollars from day one, and a lot more after a few years.

          This is similar to the Amazon headquarters in New York.
          If Amazon doesn't build, New York gets property taxes on a $2 million empty field or an old warehouse or whatever. So they get a few thousand per year in taxes.
          The deal was the delay the taxes on the new construction that Amazon would do, delay the additional millions in property taxes that Amazon would pay on the new building later.

          Then AOC comes out claiming victory saying now that she Chase's Amazon away, New York can spend those millions on whatever. No, idiot. That leaves New York with a few thousand dollars in property taxes on the delapidated warehouse that Amazon was going to trar down to build the new headquarters. The millions of dollars is what we chased away to Virginia. It's Virginia that will have millions of dollars to spend, since AOC and friends chased it out of New York. Since Amazon is brining in $5 BILLION to build the headquarters, $5 billion of construction jobs, Virginia is smart enough to know they don't mind waiting a few years to start collecting an additional few million per year in property taxes.

          • Re: (Score:3)

            by cusco ( 717999 )

            Ocasio Cortez was very badly advised, and hasn't been in politics long enough to develop a good bullshit detector. Amazon warehouse contractors make $15/hr (still better than pretty much anyone else in the industry), and that's what she was told was going into the area. Gigantic warehouses full of robots.

            In actuality not only did New York throw away $5 billion for construction but also the entire borough was going to get an infrastructure upgrade at company expense. Additionally the average salary of an

            • Badly advised, maybe. Although it kept the spotlight on her.
              As Trump has not only said but proven, press gets you elected - even "bad" press might well be good for her career, and a lot of people liked what she was saying because they don't understand either.

              Thr fact is, she was a 20-something waitress with no relevant experience, who thought she knew everything (which makes it hard to learn), and voters thrust her into a position to make law for the country. When I was in my 20s and working at a restauran

              • Re: (Score:2)

                by cusco ( 717999 )

                Still better than either McConnell or Biden, although that's not saying much . . .

          • The millions of dollars is what we chased away to Virginia.

            So your notion of a reasonable decision means spending billions to get millions?

            • You're not understanding. *Amazon* was going to spend $5 billion building HQ2, not New York. New York wasn't building Amazon's headquarters.

              Half of the increase in property taxes would be waived for a while, meaning Amazon would bring in "only" $3 billion in additional tax revenue over that period.

              The only thing New York would be "giving up" is what they never had. New York said "we won't ask you to pay us $6 billion in taxes right away, we'll take $3 billion at first". New York spends nothing, gets $3 bi

              • *Amazon* was going to spend $5 billion building HQ2, not New York.

                Amazon was building HQ2 for itself, though, not for New York.

                Half of the increase in property taxes would be waived for a while, meaning Amazon would bring in "only" $3 billion in additional tax revenue over that period.

                Where did you get $3 billion being one half? You mean they'd otherwise pay $6 billion in property taxes on a $5 billion building? Now I admittedly am from another country where various things including property taxes may work somewhat differently but those numbers don't seem very plausible to me anyway.

                Just FYI, $3 billion is MORE than $0

                Hypothetical $3 billion could as well be equal to zero.

                • > those numbers don't seem very plausible to me anyway.

                  A. It's over a 10 year period
                  B. New York has very high property taxes, much higher than most of the US

                  > Hypothetical $3 billion could as well be equal to zero

                  Exactly. The $3 billion that Amazon would not have paid in taxes is hypothetical. It's the same as zero.

                  The deal was Amazon would pay $3 billion.
                  AOC thought they should pay $6 billion. In her head, NY was "giving up" $3 billion, by not getting $6 billion.

                  When she and her followers chased A

                  • If New York indeed has such exorbitant property taxes and people want to do business there anyway, even if not necessarily Amazon, then New York must be doing something right. Then the logical question arises why would they want to be involved in such races to the bottom if it's working out for them as it is.

                    • Do something right? Sure, I don't think anybody would say that everything ever done in New York has been horrible.

                      Yes, NYC is a major city, has been important since it was founded a few years after Jamestown. Jamestown is of course the countryâ(TM)s first permanent English settlement. New York, Philadelphia, and Baltimore are the big ship harbors in the northeast, with New York being the closest to Europe. As the best harbor for trade with Europe, of course it was an important place early on, and one

                • Re: (Score:2)

                  by cusco ( 717999 )

                  **A** building? You have clue what you're talking about. Look at the South Lake Union district of Seattle in Street View, 3/4 of those buildings are Amazon, 4/5 of them didn't exist ten years ago. A decade ago that neighborhood was warehouses, shitty hotels, a car dealership, and abandoned buildings full of squatters, the only people there at night were crack dealers and hookers.

                  You don't put 15,000 people in **A** building, that was what was being offered, In addition Amazon was going to pay for major i

          • With the deal, after the the first few years the government gets the much higher taxes [...]

            Unless, after 10 years, Tesla moves their production to somewhere else that offers them tax breaks. Then the government gets diddly.

            • Re: (Score:2)

              by imgod2u ( 812837 )

              I don't know how familiar you are with large factories but they're pretty hard to move...

              And employees generally don't like being transplanted either.

              • Yeah even if Tesla moved elsewhere, they'd be leaving behind a $5 billion fully-taxable campus they had built.

                • Right. They sell it for $2.5 Billion and let somebody else pay the taxes. Of course, it's kinda tough for the state to claim that the land is worth $5 Billion if you just bought it for $2.5 Billion...

                  • Well yeah of it's worth $2.5 billion, the tax bill ia based on the $2.5 billion value.

                    You're suggesting that they should be paying twice as much as they are supposed to?

                    If you're suggesting that the property would only sell for $2.5 billion well guess what - that's the amount they actually ARE paying property tax on. They got no discount at all.

              • True. But they're not that hard to rebuild. And, let's face it, most of those employees are replaceable elsewhere.

            • How, exactly, do you propose to move a $5 billion campus of buildings to a different state?

              Do you think they are going to put 15-story office buildings in their pocket and walk away with them?

              • No. But you can always build another one elsewhere.

                • And that would make the then fully taxable $5 billion of new buildings in Texas dissappear? It's property tax we're talking about. Real estate tax. Real estate doesn't get up and walk away.

      • But you still have the inconsistency of a high tech company who on the one hand says it needs more highly educated workers while the other hand wants to dodge out on paying the school taxes that would educate them.

        And Austin is already over crowded. Why not go somewhere less crowded?

        • It's not technically in Austin. 5 or 6 miles east of the urban core is nothing but cow fields. Despite that, there is infrastructure. Last time I was there (2013) Highway 290 was being expanded from 2 lanes into an elevated freeway, extending out into these cow fields.

          North and south along I-35, is all built up. To the west is hilly terrain. But the east looks like not much. Given that it is one of the faster growing cities in the US, especially after a couple more factories get built, I don't imagi

          • It appears it's being built on this spot:

            https://goo.gl/maps/noVEzmu3LY... [goo.gl]

            Just as I thought... East of Austin, right next to a soon-to-be huge freeway, subdivisions full of new suburban homes a few minutes away, airport also minutes away, and yet still a shitload of seemingly undeveloped land. Ripe to be penetrated by Musky dick!

            • Re: (Score:2)

              by dfghjk ( 711126 )

              "...subdivisions full of new suburban homes a few minutes away..."

              This is not true. It is not a "suburban" area nor are the homes there new by any stretch.

              "...right next to a soon-to-be huge freeway..."

              Not from the Austin area, are you? Austin has NO huge freeways, and certainly none there. There may be enough for a car plant, but its not at all what you describe. It's in a relatively poor, old, undeveloped area with good access to the airport (which was relocated there not all that long ago).

              • It's true Austin has no goo east-west highways, but the new 130/44 tollway literally borders this property. The closest neighborhood [har.com] shows homes built from the late 1990s to the present, surrounded mostly by grain fields and some sort of orchard or tree farm. I expect Highway 71 will get jammed up with commuters who prefer to live in Bastrop.

        • But you still have the inconsistency of a high tech company who on the one hand says it needs more highly educated workers while the other hand wants to dodge out on paying the school taxes that would educate them.

          For this to be inconsistent you'd have to assume that public schools actually produce highly educated graduates.

        • You seem to be under the common delusion that schooling has much of anything to do with education. Most everything up to, and including, high school is a total waste of valuable childhood.

      • Re: (Score:2)

        by Ly4 ( 2353328 )

        Thanks to Texas's heavily divided school district system, Tesla is asking for tax breaks from one of the poorest entities in the area, Del Valle ISD:
        https://en.wikipedia.org/wiki/... [wikipedia.org]

        There's no guarantee that tax benefits from growth in the area will come back to the school district.

        • Re: (Score:2)

          by Cylix ( 55374 )

          Good point!

          Refuse any investment from anyone attempting to establish a business in the area. Now, the location will be consistently poor and we can guarantee no improvements are made.

          However, establish one or multiple improvements into the area and you might just benefit.

          Lose/lose I know!

        • Re: (Score:2)

          by dfghjk ( 711126 )

          Should there be?

          Property taxes primarily fund schools in Texas. The important thing is for school taxes to scale as local schools require the funds. There's no reason to fund local schools with taxes set by the value of a local factory and peripheral tax gains will very likely benefit the school district.

          Large companies that build large facilities have to accept infrastructure expenses that need to be offset with "deals" with local tax authorities. Nothing is known about that here so people should keep t

      • Re: (Score:2)

        by dfghjk ( 711126 )

        "Simply letting Tesla pay a little less as an incentive to move there, is a good deal for everyone."

        What defines "a little less" and how do you know that is what is being asked/offered? You don't know anything about any deal, nor does anyone else.

        Also, I am highly confident you know nothing about how taxes work in Texas, or for that matter anywhere.

    • Comment removed based on user account deletion

      • Detroit, eat your heart out!!

        The state of Michigan is too busy having 2.34x the GDP of your state, with only 2.03x your population, giving them a 15% higher GDP per capita than you.
        I'm not sure you're in a place to critique the industry of states such of Michigan, standing in fucking Alabama.

  • Yes, but will they now be able to sell in Texas (Score:4, Interesting)

    by ukoda ( 537183 ) on Thursday June 18, 2020 @08:10PM (#60200202) Homepage
    Given that Tesla can't sell directly in Texas, typical Wikipedia link [wikipedia.org], I wonder if setting up a factory there will change the state government's mind about things?

    • I just ordered a Model Y. I had the advantage of being able to drive one (serial #127!) right from the factory, but ordering a Tesla is an online experience. Like ordering from amazon but with a lot of configuration and financing options.

      My take is that Tesla/Elon realizes that Texas' outdated laws on car dealerships are irrelevant to them. They compete on their product specs and nobody who wants one is going to be deterred by the lack of a sales room nearby. And anybody who doesn't want one is not

    • It's not the state government really, it's the car dealerships who lobbied to stop competitors from setting up. The Texas state government has a long tradition of attracting sociopaths and corrupt pieces of shit, which is a major reason Texans don't trust government.

      • Re: (Score:1)

        by cusco ( 717999 )

        Texas has a long tradition of attracting sociopaths and corrupt pieces of shit, which is a major reason much of the world doesn't trust Texans.

        • Funny you say that but here in Austin I see more and more Kalifornia, Illinois, and New York tags here every week. I wish more east and west coasters thought as you do so this place doesn't get saturated by some of the most snobbish (NY), unfriendly (IL) a fake (CA) in the country.

          • Re: (Score:2)

            by cusco ( 717999 )

            Be glad you don't see Michigan plates much, I grew up there and a lot of those folks come in under all three categories.

      • Re: (Score:3)

        by dfghjk ( 711126 )

        This cannot be overstated. Texas state government is appalling.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Probably not. They call it a "gigafactory" but it's actually just a medium sized car plant and unlikely to be big enough to overcome the dealer's lobbying efforts.

      • Re: (Score:2)

        by imgod2u ( 812837 )

        Tesla's factory sizes tend to be pretty elastic. Gigafactory in Nevada, for example, grew over time as needed. Same with Fremont (they're assembling in a tent lol).

        One thing about Tesla vs Ford or Mercedes is that they do have that "let's change plans today" type of behavior. So a small factory today can become a large one tomorrow and they'll find some way to jerry-rig it to make it happen.

        It depends on what makes business sense at the time. And likely also depends on how local governments behave.

    • Maybe. Here’s my take on it. Tesla could work out a deal with Texas to sell them. Texas would gladly welcome the factory. Texas however will not put up with Musk’s BS.

  • Criticising Elon’s Latin (Score:3, Funny)

    by inthegreenwoods ( 4272563 ) on Thursday June 18, 2020 @08:11PM (#60200208)
    It was a cyber truck when it was a secret, now he’s announced it it’s just an electric truck.

    • It was a cyber truck when it was a secret, now he’s announced it it’s just an electric truck.

      Except cyber is derived from Greek kubernetes ( steersman) -> cybernetics ( automatic control systems ), and has nothing to do with wether something is secret or not.

  • Texas has been so hostile to Tesla, throwing all sorts of hurdles. Can it sell the cars made in Texas in Texas, or it has to ship them to Las Vegas and sell from Nevada?

    It is sad to see all the states that supported Tesal are ditched and Texas gets the factory.

    • How do you know there hasn't been some backroom deal made where, in exchange for setting up the factory in Texas, the state will drop all its hurdles in the next couple years? Between that and SpaceX's growing presence in Texas, I'm sure more than a few state legislators are willing to accommodate Mr. Musk.

  • I bet some large industrials are laughing at its pesky size right now. Compared to their much larger ... just "factories".

  • or is this truck uglier than a coffin?

    • Re: (Score:2)

      by cusco ( 717999 )

      Yeah, it's just you. I personally think it looks much better than a standard pickup and will probably buy one when the wheels eventually fall off my 2002 Tacoma.

      • Re: (Score:2)

        by kalpol ( 714519 )
        I feel like it would be somewhat impractical to say, carry a load of lumber or put a tool rack on. The thing about pickup trucks is that they are square and lots of things can fit on a square. Not that I'm not happy to see them come here (except for the massive hit my property taxes are going to take) but it will be interesting to see who actually uses this truck to work.

        • Re: (Score:2)

          by cusco ( 717999 )

          Huge towing capacity, 110/220 electrical outlets, integrated air compressor, integrated ramp, workbench-quality tailgate, AWD, I'll beat the living crap out of it.

        • Why would it be impractical to haul lumber? As long as it has a flat bed of 7 or 8 feet with the tailgate down, that's all you need. From what I've seen, you can stack 2x4s probably 8 high. Maybe even higher without the tonneau covers?

          I have a Chevy Avalanche and I can arguably haul more lumber safely than any other truck in it's class. An 8' piece of lumber or a 4x8 sheet of plywood will comfortably fit in the bed AND allow me to close the tailgate. I don't have lumber sticking out beyond the tailgat

        • >but it will be interesting to see who actually uses this truck to work

          My wife plans to. She has a yarn wholesale business and needs to move stuff. She likes the model 3 we have and the next pickup will be electric. The cybertruck ticks all the boxes for her use case. The order is in. I don't expect to be seeing it for a couple of years.

           

    • Re: (Score:2)

      by imgod2u ( 812837 )

      It's an ugly thing all right. But I'm buying one. To quote Han Solo: "She may not look like much, but she's got it where it counts, kid".

  • Itâ(TM)s interesting that after Elon Muskâ(TM)s battles with California and Lauren S Gonzalezâ(TM)s f*** Elon Musk tweet that this is happening. He also recently sold several personally owned California properties.
  • Can we please stop using the prefix cyber- and the phrases "information superhighway" and "giant electronic brain"?

    Please?

    I'm not asking for much. I'm not even complaining about giga-. I can be reasonable.

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