The Austin City Council voted to approve economic incentives for the Hanger Orthopedic Group Inc. Thursday.

City council members approved a $500,000 economic development package. The funds will be distributed to the company over the next 10 years.

Hanger Orthopedic recently announced plans to relocate to Austin from their current headquarters in Maryland.

Council member Randi Shade said this is exactly the kind of company Austin needs.

"We have a very narrowly defined performance-based contract. The city doesn't pay unless the company performs according to the contract," Shade said.

The Austin Chamber of Commerce said they support the council's decision to approve the development package for the company.

"With solid opportunities for growth, Hanger will be an excellent addition to the Austin business community, and we are pleased that they have chosen Austin for their headquarters," 2010 Opportunity Austin Chair and President Tim Crowley said.

The company is the largest orthotic and prosthetic network management company in the U.S.

"We promote creativity and innovation in our business operations. Our new location embodies this spirit and will serve as an ideal environment for us to continue our growth and disciplined diversification strategy," President and CEO of Hanger Orthopedic Group Tom Kirk said.

Brian Rodgers, with ChangeAustin.org said he isn't against the Hanger deal, but thinks the money would be better spent on creating new companies.

"A better alternative to the industrial recruitment is to grow the city from within. Are we going to seed manufacturing to China or are we going to try to generate startups here in Austin? In my opinion, stealing jobs away from other cities is not economic development," he said.

Their relocation will create 130 jobs for Central Texas initially, but over the next few years, the company expects to add a total of 250 jobs to the area.