SHERMAN, TX - As Globitech contemplates the future location of a proposed $5 billion silicon wafer production plant, local taxing entities are willing to reduce the company’s burden if it chooses Sherman. In a series of actions this week, three of the four local taxing entities approved abatement agreements aimed at reducing the cost and hoping to convince Globitech to build in Texoma.
The Sherman City Council, Grayson College Board of Trustees and Grayson County Commissioners each approved a series of abatements and incentives for each of the four phases of the $5 billion project, leaving Sherman Independent School District as the final entity to decide if it will support the project through tax breaks.
These abatements mark the second multi-billion dollar deal that the city and other entities have incentivized within a year following the nearly $30 billion expansion of Texas Instruments.
“It is a great project, obviously, for the city of Sherman, one that is a game changer,” City Manager Robby Hefton said Monday describing the Globitech project.
Earlier this year, Globitech and parent company GlobalWafers announced that Sherman was among three sites being considered for a new production plant that could manufacture silicon wafers that are used to make microchips and other electronics. The announcement was made indirectly when the companies submitted a Chapter 313 tax agreement application with the Sherman Independent School District.
The proposed agreement noted that Globitech was also considering sites in Ohio and South Korea.
“The easy answer was to go to South Korea,” Globitech President Mark England said. “The harder answer is to do it in the U.S., but there is a lot of momentum now.”
The plant would be built in four proposed phases with an estimated 375 new jobs and $1.5 billion investment per phase. In total, the project could generate about 1,500 new jobs with a total investment of about $5 billion.
Last week, the Sherman Economic Development Corp. approved more than $34 million in incentives for the project, including a total of $20 million in cash payments and the sale of 144 acres valued at $14.4 million for just $1 per acre.
The Sherman City Council approved its series of abatements and tax rebates Monday night during a regular city council meeting. In the agreement, the city agreed to abate a portion of the property taxes for the project site and improvements above the base value of $16.62 million. Globitech and GlobalWafers would receive an 85 percent abatement for 10 years followed by a 75 percent tax rebate for 20 additional years for a total of 30 years of incentives.
In addition to the abatement and rebates, the city also agreed to offer a 25 percent discount to Globitech and GlobalWafers for water and sewer services for its facilities in Sherman for the next 30 years.
The agreement that was approved by the council states that the city could expect to receive between $1 million and $2 million in taxes during construction of each phase. At full buildout, the project would generate between $5 million and $7 million in direct revenue for the city even with the abatements in place.
The agreements did not set a specific start date for the agreement and instead included a clause that states that the agreement will begin on January 1 of a year of Globitech’s choosing.
Grayson College also approved its own series of agreements with Globitech Monday. While the agreements are largely similar, the college only approved a 50 percent abatement for the first 10 years, with no further abatements for the first, second and fourth phases.
However, documents provided by the college state that the abatement for the third phase will be 85 percent. However, officials with Globitech said all four phases will be at 50 percent.
Grayson County was the third taxing entity to approve tax abatements for Globitech and GlobalWafers when it approved its own series of incentives Tuesday morning. The county’s package largely follows that of Sherman with 10 years of abatement at 85 percent followed by 20 years of rebates at 75 percent.
With three of the taxing entities granting their blessing, Sherman ISD will be the final taxing entity to decide if Globitech should be granted incentives. Unlike the other three entities, SISD will not be considering a direct abatement, but will instead be considering a Chapter 313 tax agreement that allows school districts to limit the assessable value of a property for a decade.
Unlike the other parties, the district must wait until the Texas state comptroller approves the Chapter 313 application before it can take action. Officials with the city and Globitech said they expect news from the comptroller’s office early next week.
While no decision has been announced, Sherman Mayor David Plyler remained optimistic of Sherman’s chances.
“We seem to be in a position where we’re becoming known as a high-tech provider in the state of Texas,” he said, noting that Gov. Greg Abbot has made similar remarks. “ So, we’re really excited about that and you know Sherman’s punching well above our weight. We’re in competition globally for these companies, and when most of the CEOs hear the word Sherman they know where we are. We’ve built a bit of a reputation in that.”
Michael Hutchins | Herald Democrat
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