Chamber urges support for Athenahealth deal

Jan 29, 2014
Austin Business Journal

The Greater Austin Chamber of Commerce has issued a statement calling for Austinites to support the Athenahealth incentives deal under consideration before Austin City Council

The proposed Athenahealth Inc (Nasdaq: ATHN) deal, which would bring 607 software jobs and a $7.75 million investment to downtown’s Seaholm development, is set for a council vote on Jan. 30. At a recent briefing, several council members expressed concern about whether the incentives are justified, raising questions about whether the deal would go through

Council's toughest questions were directed at Seaholm developer John Rosato, principal of Southwest Strategies Group and managing partner for Seaholm Power LLC, and not Athenahealth. Council members Kathie Tovo and Chris Riley asked whether the public needed to support an office tenant’s move into the space. Both appeared skeptical of an additional public subsidy for the project

Rosato responded that the nature of the historic building and open space made marketing the space a challenge. The three-year push to secure a tenant had led to the Athenahealth deal, he said at the meeting 

Seaholm's original 2008 plan called for a mix of retail, office and public space, but in 2012 city council OK'd a switch to office space. The change was needed to adapt to new market conditions, Rosato said at the time, though the shift irked some council members who worried it would decrease the amount of space available to the public

Councilwoman Laura Morrison questioned the need to incentivize another company offering jobs in the already tight technology market. In response, Athenahealth noted that the jobs it expects to fill with locals will be added over several years

The Athenahealth deal would also add another player to Austin's health care sector as the University of Texas at Austin pursues its new medical school

Athenahealth already has 36 employees at an office at the Domain in North Austin. The company was founded in 1997 and employs 2,853 in five U.S. locations and one international office

The city’s incentive package – a $679,500 performance-based grant over 10 years – would open the door to an additional $5 million grant from the state’s Texas Enterprise Fund. The relatively modest investment for the city is likely the biggest reason the deal may slip through council – Austin is relying mostly on the state's investment to bring the jobs to town

A delay or setback at city hall could drive the deal elsewhere though. In documents filed with the city, Athenahealth said it was also considering locations in California, Massachusetts and Georgia. Georgia and Massachusetts officials have offered the Watertown, Mass.-based company incentives for existing offices and locations

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