Internet giant eBay and its subsidiary PayPal have quietly walked away from a two-year-old, $1.2 million incentives deal with the city of Austin, but company officials say they still intend to expand locally with a mix of technology and call-center jobs.
The Austin City Council on Thursday will consider green-lighting a new application by eBay aimed at obtaining a refund of state sales taxes on its projected $8.4 million capital investment in North Austin.
As part of that discussion, the American-Statesman learned that eBay sent a letter to City Manager Marc Ott six months ago, withdrawing from its 2011 agreement with the city .
Under that highly-publicized agreement, eBay agreed to add 1,000 high-paying jobs — with an average salary of about $107,000 — over 10 years.
Kari Ramirez with eBay’s corporate communications said the company withdrew from the Austin deal because the terms of the agreement proved too costly to administer. However, she said that eBay still intends to hire 1,000 higher-paid technology workers in Austin as originally envisioned.
Her remarks echoed eBay’s letter dated May 1.
“Though we are electing not to proceed with the agreement, eBay is committed to continuing our expansion, a reflection of our ongoing commitment to attracting top talent to drive innovation in commerce and payments,” the letter read. “Our plan is to hire 1,000 employees as originally contemplated under the agreement, while continuing to make leasehold improvements and other renovations to the building.”
The company still has a contract with the state to provide those 1,000 jobs — at an average salary of $90,000, adjusted annually for inflation, over 10 years.
The state has paid eBay half of the $2.8 million promised in 2011 from the Texas Enterprise Fund. The city of Austin had not paid anything when the company killed its city contract.
Unlike 2011’s contracts, Thursday’s council vote concerns a refund of state sales taxes through the state enterprise zone program. While either the city or county must OK the company’s application, the state has the final say over the refund of state sales taxes.
According to city documents, eBay is proposing a projected capital investment of $8.4 million by leasing 66,000 square feet of office space in North Austin. The company plans to expand its customer support operation by hiring 400 new employees as well as retaining 500 current workers.
At least one-fourth of eBay’s new hires are supposed to be economically disadvantaged or live in an economically-disadvantaged area to meet the terms of the state program.