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San Antonio Will Cancel Incentive Deal With Hulu, Following Bexar County Lead

Courtesy Hulu

Bexar County voted to claw back incentives given to television streaming provider Hulu. The city will also terminate its incentive deal within 45 days.

Earlier this month the company asked the county to end its 10-year tax deal worth an estimated $403,000. The city’s deal is a $280,000, 10-year tax break

Hulu opened its Viewer Experience Center on the city’s northwest side to support its launch of live T.V. streaming. It promised to invest $15 million and create 500 jobs in San Antonio over the next decade.  So far it has invested millions and created 389 jobs, according to the city’s incentive database.

But the company was failing to keep up with base wage growth for those employees. 70% were supposed to be making $15.68 per hour this year. County officials said they weren’t going to make that benchmark, and Hulu wanted out as a result.

“Many of these contemporary companies focus more on performance pay, and less on base pay,” said David Marquez, director of Bexar county’s economic development department. “They realized they could make a go of it here — hire the people they need — without the incentives that we were providing.”

That isn’t necessarily a bad thing said Marquez, who said the performance pay could equate to much more than the base pay for some. But — without the incentive deal — there’s also no guarantee people will be paid much more than the $11.83 per hour base pay  — the local living wage.

“They’re already exceeding the living wage requirement,” said Rene Dominguez, director of the city’s economic development department. “And I don’t think they are backing away from those benchmarks.”

Dominguez said he thought the company is an employer of choice and — because of low unemployment rates — had no choice but to continue raising wages. But the city won’t change the terms of the deal to reflect performance pay vs. base pay.

“This is just the best way to deal with bringing uniformity when you are dealing with so many different companies,” he said.

Many of the jobs at Hulu’s San Antonio location are described as customer service or call center positions on websites like Glassdoor.

“We spent months and millions of dollars recruiting an employer who pays worse than Bill Miller and McDonalds,” said Michael Girdley, the co-founder of Code-Up and Dura Software, in a tweet he would later take down.

The county will recoup around $6,000 for the single year the abatement took place, and the city will recoup $12,000. It isn’t clear if the state will reevaluate the $1.28 million in incentives through the Texas Enterprise Fund it gave. State officials didn’t respond before publication.

“Hulu is pleased to be a part of the San Antonio community,” said Karen Van Kirk, Vice President of Viewer Experience in her June 3 letter to the county asking for the abatement to be cancelled.

Company officials didn’t respond to interview requests before publication but Marquez said at the end of the day the jobs are here and the company is still growing.

“We put a lot of effort into recruiting this company and here they are. The fact that they are asking for relief from this particular abatement doesn’t give me much concern,” he said.

Paul Flahive can be reached at Paul@tpr.org or on Twitter@paulflahive.

Paul Flahive can be reached at Paul@tpr.org