Fort Collins Council to mull Avago tax breaks

FORT COLLINS – The Fort Collins City Council next week will decide whether to approve an agreement authorizing $4.6 million in tax breaks for Avago Technologies Inc.

The breaks could spell the difference on whether San Jose, Calif.-based Avago moves forward with plans to invest $165 million to expand into 12,160 square feet of a building on its Fort Collins campus, according to city documents. The expansion would add more than 130 new jobs to the company’s operations.

The proposed agreement between the city and Avago offers two kinds of tax breaks: a use-tax rebate on manufacturing equipment bought for the expansion and a personal property tax rebate on equipment bought by the company for 10 years.

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“I think, if the request is granted, that we’re leaning toward keeping things in Colorado as opposed to offshore,” Steve Sharp, Avago’s manager of corporate marketing and communications, has said.

Larimer County commissioners, meanwhile, are reviewing a request for $930,100 in personal property tax rebates for Avago over five years.

Avago must maintain manufacturing operations for at least the duration of the rebated years as well as meet certain job-creation criteria to receive the rebates.

“The agreement will include a payback mechanism by Avago Technologies if performance requirements are not met,” city documents read.

Construction will generate 129 jobs and another 144 equipment installation jobs during the project, according to the city. These jobs will generate an additional 127 “spillover” jobs.

Despite the rebates, the city still expects to collect nearly $1.7 million in new tax revenue.

The expansion would add 135 jobs on top of the nearly 700 Avago employees already here. That would make its Fort Collins site the largest of the company’s four locations in terms of headcount.

The Fort Collins operation already is the largest site in terms of square footage. Avago also has plants in Singapore and Malaysia.

Avago, a spinoff of Agilent Technologies, makes semiconductors in Fort Collins. The growing company, which is said to have received cash offers from Southeast Asian countries for the expansion, would save on manufacturing costs by expanding overseas.

But it would like to keep its manufacturing operations in Fort Collins, where it employs a great deal of its engineers, Sharp has said.

County and city leaders have expressed support for granting the tax breaks.