Dell deal could bring 1,000 jobs, $1.2 billion in revenue
By Ginger D. Richardson
Star-Telegram Staff Writer
FORT WORTH -- A Dell Computer Corp. campus, and the nearby development it triggers, could generate at least $1.2 billion in property tax revenue over 40 years, city officials said Friday.
It will cost about $160 million to pay for the streets, frontage roads and other public improvements vital to the computer manufacturer's local expansion, city officials estimate.
The "conservative but realistic" figures provide an initial glimpse at how big the long- term economic development agreement could be between the computer giant and the city.
"Depending on how you measure our various incentives, the packages we've put together for different projects, this would probably be the most aggressive one we've done," said Tom Higgins, Fort Worth economic development director. "You can just see the kind of wealth that can occur." Fort Worth officials, working with Dell, announced in mid- November after nine months of negotiating that they were considering creating a 40-year, 2,500-acre tax increment financing district, known as a TIF, to entice Dell to open a corporate campus in north Fort Worth.
So far Dell has committed to a 75,000-square-foot Dell sales and support center at Alliance Industrial Park. This center will house 500 employees when it opens in April and could grow to 1,000 workers by 2002, Dell officials have said. However, city officials hope a campus would persuade Dell to expand its operations.
Based in Round Rock, north of Austin, the rapidly growing company generated more than $25 billion in revenue last year. Two years ago, it expanded from its Texas base, adding a facility in Nashville, Tenn., where it has about 3,000 employees.
And though city officials emphasize that no agreement has been finalized, they are moving aggressively to create the TIF and to annex all its land by Dec. 19.
In a TIF, a piece of land's property value is frozen, so that any revenues caused by new development could be used to pay for the anticipated millions of dollars of needed street and public improvements. State and federal funds could also be used, officials said.
In doing their revenue and cost projections this week, city officials assumed that the TIF's current appraised value was zero and that area tax rates will not increase. They also assumed that the Northwest and Keller school districts will not participate in the project and that any Dell deal will trigger additional commercial and retail development in the TIF.
Fort Worth officials met Friday with representatives of Tarrant County, the Northwest and Keller school districts, Tarrant County College and the Tarrant Regional Water District to encourage their participation.
After the meeting, Lisa McMillan, Tarrant County's economic development coordinator, said she hoped the county could participate in the project, but she stopped short of promising support.
"There's not a problem with what we see ... ," McMillan said. "It's going to depend on what kind of revenues will be generated by the TIF."
Dell has indicated that it will invest $40 million and employ 1,000 employees at the proposed campus, near U.S. 287 and Interstate 35W.
Increases in those commitments -- or an unanticipated downturn in the company's business -- could cause the projected $1.2 billion in property tax revenue to fluctuate, officials said.
Dell's stock has lost 64 percent of its value this year as analysts lower their expectations for the company.
On Friday, Dell shares reached their lowest price in a year, $18.4375 on the Nasdaq stock market, after the Gateway computer company announced slow holiday sales of PCs. Dell said it still expects to add $6.5 billion in revenue next year to its $30 billion in sales.
Dell spokeswoman Cathie Hargett pointed to the company's track record in Nashville, where it anticipates an economic impact of $690 million over five years.
Reid Rector, the Fort Worth's Chamber of Commerce's executive vice president of economic development, said Friday that he was not worried about Dell's recent stock woes.
"Business conditions can always affect economic development projects," he said. "But the city and Dell are moving so carefully, and so cautiously, that I don't think there is any cause for concern."
Mayor Kenneth Barr agreed.
"They are a dynamic growing company. ... They are going to have some ups and downs in sales and stock prices. That doesn't concern me a whole lot," he said. "Anytime you project something out for 40 years, the numbers can get very large. But we do know this is a big deal, and the economic impact of having the proposed facility is enormous."
Staff writers Andrea Ahles and Karen Brooks contributed to this report.
Ginger D. Richardson, (817) 390-7616
Send comments to grichardson@star-telegram.com
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