Free pizza and a 75-foot musk statue: the battle for the next Tesla plant

(Reuters) – Tulsa, Oklahoma, is an oil industry city with a 75-foot (23m) statue called “The Golden Driller.”

Austin, Texas is a progressive city in a conservative state with a thriving software industry and a “Keep Austin Weird” counterculture image.

These two very different cities have one thing in common: they are both on the short list for a $ 1.1 billion vehicle assembly plant for Tesla Inc (TSLA.O) – and up to 20,000 new jobs.

With a decision expected within a few weeks, the Austin-versus-Tulsa contest is heating up as Tesla and its chief executive, Elon Musk, fuel a bidding war for tax breaks and other concessions that would lower the cost of the factory.

Travis County, the home of Austin, is expected to vote this week for a share of the 10-year tax refunds totaling more than $ 65 million. The company told Texas officials that the new plant would create at least 5,000 jobs, while Oklahoma officials were informed of creating at least 7,000 jobs in the short term and up to 20,000 jobs in the future.

But some Austin residents have told officials they are skeptical about subsidizing what is now the world’s most valuable automaker, after previously rejecting Amazon.com Inc (AMZN.O)

“Instead of focusing on giving people a living wage … you are giving tax breaks to a company that is worth billions. It doesn’t make sense, ”Silvia Zuvieta-Rodríguez, a University of Texas student, told officials at a recent county hearing.

Tesla, in public filings with Travis County, said state and local tax incentives “play a critical role” in launching the new factory and successfully competing against long-standing industry rivals. Tesla did not respond to requests for comment for this story.

In Oklahoma, Tesla fever is on full display.

That Golden Driller statue? He was recently repainted by a local Tesla fan club to look like Musk, sporting a Tesla logo on the chest and a belt buckle stamped with the company name.

Musk himself flew on July 3 to visit the undeveloped site overlooking Tulsa that would house the new factory, which would build Model Y sport utility vehicles and Tesla’s futuristic Cybertruck. Musk met with the state governor under a white tent in the sweltering summer heat, according to images posted to Twitter by Oklahoma Gov. Kevin Stitt.

Oklahoma officials were scheduled to make their presentation to dozens of top Tesla executives in a Zoom call Monday afternoon.

“The response here is still overwhelming,” said Oklahoma Secretary of Commerce Sean Kouplen. “In the time that we’re in, having something positive to hold on to or hold on to is really making a difference.”

Even local retailers have caught the Tesla bug. The Kouplen kids came home the other day with a photo of a special Tesla-themed snow cone sold by a local store, and a Tulsa pizzeria has promised to give free cakes to all Tesla employees.

Tulsa, once known as the “Oil Capital of the World,” is trying to remake its image with a $ 1 billion renovation of its center, which includes modern coffee shops, raft races, jazz clubs, and efforts to attract workers. white collar that can work remotely.

According to Oklahoma officials, a new video with testimonials from engineers who recently moved to Tulsa has been viewed 200,000 times, including by Musk.

Various websites have emerged that try to attract Tesla. One, called “Big F * cking Field”, purports to be the voice of a parcel of land and includes humorously false endorsements of the likes of Thomas Edison.

“We were the original oil boom town in the 1920s and it’s a great way to say something is changing,” said Jacob Johnson, the creator of the websites and a Tulsa-based digital marketing executive.

In its search for a new plant, Tesla shortlisted eight central US states and received incentive packages from many others, but only Tulsa and Travis County continue to operate. The company told Texas officials that its plant would create more than 5,000 primarily low-skilled jobs with an average salary of $ 47,000.

Oklahoma has signed a confidentiality agreement on its incentive package, but Kouplen said the offer was not only competitive but better in some parts than Travis County. It includes business and personal tax exemptions, most of which were already guaranteed by state law, which meant they wouldn’t require the kind of public votes that have been repeatedly delayed in Austin.

Details about the Travis County tax exemptions emerged only during public hearings and it is unclear whether the state of Texas would provide additional incentives. Gov. Greg Abbott’s office did not respond to requests for comment.

Squeezing states for incentives is not new to the auto industry. Tesla received incentives of about $ 1.4 billion to build a battery plant in Nevada in 2014, and Alabama attracted German automaker Mercedes-Benz (DAIGn.DE) with a $ 253 million package in the 1990s.

Those payouts are now pale compared to Musk’s wealth, which is within reach of a potentially $ 1.8 billion payday as the company’s stock recovery continues. Tesla’s shares have more than quadrupled so far this year, as the company increased vehicle sales and is expected to make a profit in the second quarter.