Here’s Food for Thought . . . San Jose’s Samsung partnership is smart public policy.
For the past two weeks,headlines have read that San Jose was preparing to give Samsung Semiconductor $7 million to expand its Research and Development facilities on North First Street.
The incentive package was not in cash, but rather, in reduced fees like traffic impact fees, utility taxes and production and assembly equipment purchases.
The upside? Samsung will grow its Research and Development workforce from its current head count of 370 high-tech, high-skilled, high-wage jobs to an anticipated 2,000 employees ten years from today. That’s 1,630 new high-tech jobs in San Jose.
Much has been written about the $7 million incentive package, but little of the coverage has mentioned the $23 million that will be generated for city residents from the Samsung expansion in terms of property tax revenue, business and utility taxes. That is a net gain of $16 million.
In addition, the City wisely included “Claw Back” provisions that Samsung would need to pay if the promised jobs and expansion never materialize.
Why does this matter to San Jose residents? Easy. Samsung is creating hundreds of new jobs for future employees, on a project which will also create hundreds of construction jobs to build the ten-story building and nine-story parking structure. In addition, San Jose shows it can compete against other regions, states and nations. Kudos to Mayor Reed and the City Council for a wise investment with a three-fold return.