Wednesday, August 06, 2014
2 California firms to get $14M in incentives for Dallas move
Two companies bringing 1,450 jobs to downtown Dallas will get almost $14 million in incentives from the city and state.
That works out to more than $9,600 per job.
The two firms moving here from San Diego — software company Active Network and fleet management company Omnitracs — will occupy about 300,000 square feet in downtown’s KPMG Centre.
Both companies are owned by investment firm Vista Equity Partners, which has offices in San Francisco and Austin.
On Monday morning, the city of Dallas’ Economic Development Committee agreed to give the companies $1.45 million in economic development grants
Several council members have voiced support for the incentives, and the full council will take up the measures next week.
City staff cheered the moves to fill space at 717 Harwood St., touting a return on investment of millions of dollars and hundreds of jobs.
Hammond Perot, assistant director of the city’s economic development office, said it marked one of the best days in his nearly 20 years on the job.
“It’s a banner day for us,” he said.
The 850,000-square-foot KPMG Centre has suffered from plunging office occupancies and was in the hands of lenders before it sold earlier this year. The new owner, Austin-based World Class Capital, plans major upgrades to the lobby and public spaces as part of a plan to attract new tenants to the building, which was constructed in the 1980s.
Council member Scott Griggs said the incentives are too high. He wondered why the city’s $1 million was needed for one of the deals, for instance, when the state is giving that company $8.6 million to make the move to Texas.
“I don’t want to rain on your parade,” he said. “But we don’t want incentives to cross over into corporate welfare.”
Karl Zavitkovsky, director of the city’s economic development office, said there was lots of competition to attract the companies. He also said the city’s investment was necessary to get the state to jump on board.
“The state enterprise fund would not be making the investment without skin in the game from the local municipality,” he said.
The Texas Enterprise Fund is giving more than $12 million in incentives to lure the two companies from Southern California.
Vista Equity Partners is moving the two subsidiaries to Texas to take advantage of more beneficial business conditions.
Active Network and Omnitracs will sign 10-year office leases in the 34-story high-rise and start occupying the space in September.
Active Network’s 1,000 downtown employees will have an average salary of $60,000, and the company will make a minimum investment of $3 million in the office space, according to city filings.
The city says Omnitracs will also invest $3 million in its new offices and pay $50,000 average salaries to its 450 workers.
The Active Network and Omnitracs office leases are two of the largest commercial real estate transactions in downtown Dallas so far this year.
Finance firm Santander Consumer USA is also renting more than 370,000 square feet in downtown’s Thanksgiving Tower for a consolidation of its operations. The company has already started moving in.
Santander got a $1 million economic development grant from the city for its operations, which encompass 1,400 jobs.
By Steve Brown and Tom Benning- Dallas News