AT&T is planning to spend $1.35 billion to build a 2 million-square-foot campus in Plano, Texas, after the city approved its largest economic incentive package yet in a move that rewards the telecom giant’s decision to decamp from its headquarters in downtown Dallas.
The $20 million in grants and tax breaks, approved unanimously by Plano city council members, rely on AT&T meeting spending thresholds and employing up to 10,000 workers at the campus for 25 years. Some thresholds include building at least 2 million square feet of office, amenity and retail space at 5400 Legacy Drive, Plano's Legacy Business Park, by the end of 2029, city documents show.
Incentives to lure companies to municipalities have been a topic of debate, with proponents saying elected leaders need to try to draw large employers to help the local economy while opponents have argued that the benefits may not be worth the costs. The deal involving AT&T, a well-known global company, has raised its profile.
The $20 million in funds include a $10 million redevelopment grant, as well as a job-creation incentive of $1,000 per qualifying job. The real estate investment is expected to total $1.35 billion, with a 65% property tax rebate for 25 years with an additional 25% rebate available for 10 years.
AT&T looks forward to “continuing to work closely with Plano city leaders” as it creates a “world-class campus, designed for collaboration, innovation and engagement” that its employees “can be proud of for many years to come,” said Michael Ford, AT&T’s head of global real estate and security, in a statement following the city council’s unanimous decision.
AT&T announced last month that it planned to move its headquarters from its longtime home in downtown Dallas to a new campus roughly 20 miles away, marking a major setback for the business district.
The telecom giant’s departure from downtown, where it leases four towers comprising 2 million square feet, is expected to cost the area about $2.7 billion in property value losses, based on a report last year from Boston Consulting Group.
The Plano site on Legacy Drive is currently home to an aging campus once housing Ross Perot’s Electronic Data Systems. AT&T expects to redevelop the site and build a new headquarters in the years ahead.
Once the campus is complete, AT&T is expected to become Plano’s second-largest employer behind JPMorgan Chase, which has 11,133 full-time employees, and ahead of Bank of America, which has 7,266 full-time employees at its corporate campus, according to the city of Plano.
The city’s incentive proposal to AT&T surpasses the $6.75 million grant it offered in 2014 to Toyota North America for about 4,000 employees and a 50% reduction in property taxes over a 10-year period for its 100-acre, 1 million-square-foot campus. Toyota North America was also proffered an additional $40 million grant from the state’s deal-closing fund.
Plano Mayor John Muns said in a statement that the decision reflects Plano’s “commitment to safety, quality of life and a collaborative environment where companies and employees thrive,” with the city seeking to grow alongside AT&T’s business.
The formation of Legacy Business Park in Plano began in the 1980s when Perot acquired 2,600 acres to create a business park able to attract big companies. The vision began when Electronic Data Systems’ headquarters opened in 1992, with large companies, including Toyota North America, JPMorgan Chase and NTT Data, following suit.