School board joins county in granting Exxon tax abatements
Tax abatements for a proposed ExxonMobil steam cracker plant were approved 4-1 by the San Patricio Commissioners Court on March 20 and 6-0 by the Gregory-Portland school board March 21. In 2016, ExxonMobil and its partner, Saudi Arabia Basic Industries Corp., submitted applications for tax abatements to the local entities for a $10 billion plant.
Four sites are under consideration for the plant: Portland, Victoria and two in Louisiana. A decision is expected to be announced by April 1 after this issue of Corpus Christi Business News had gone to press.
SAN PATRICIO COUNTY
The county commissioners meeting had to be moved to the district courtroom because so many people showed up to speak, both for and against. Most opponents wore red T-shirts with #NoExxon on the front. They argued the plant would upset the quality of life of residents. They added it will be too close to the local high school and damage property values.
Proponents pointed to the economic security it would bring to the area in terms of high-paying jobs.
“This plant will benefit the entire county,” said Foster Edwards, president of the San Patricio Economic Development Corp.
Commissioners voted 5-0 to establish the proposed building site of 1,300 acres at FM 2986 and U.S. 181 as a reinvestment zone. The vote was 4-1 on the incentive package with commissioner Nina Trevino as the single opposing vote.
After a four-hour meeting March 21, the Gregory-Portland Independent School District board voted 6-0 with one abstention to enter into a Chapter 313 agreement with ExxonMobil. The agreement would place a 10-year limitation on the taxable property value for school district maintenance and operations tax purposes in exchange for building or installing on that property a job-creating entity. The district also entered into a Memorandum of Understanding with ExxonMobil and SABIC that further detailed the exchange of jobs for property tax limitations. The vote means the company will pay no property taxes for the first three years in operation, then get a cut of 70 percent for the next seven years.
Errol Summerlin, a leader of Portland Citizens United, a group that opposes the plant, and other people against its creation attended the meeting, again wearing their red #NoExxon T-shirts. Summerlin declared after the meeting that the group would continue to fight the plant.
Wherever it’s built, the plant is expected to generate $22 billion in state economic gains during the construction phase and $50 billion in state economic gains during its first six years of operation. It is also expected to create more than 600 new permanent jobs that pay an average of $90,000 a year. A five-year buildout would create 11,000 construction jobs, according to projections
The ethylene created at the plant would be used to feed three derivative units producing monoethylene glycol and polyethylene. Monoethylene glycol is used in latex paints and automotive coolants and antifreeze. It is a building block used to create various forms of plastic. Polyethylene is used for film, packaging, bottles, pipes and containers.
The company does seem to have its sights set on the Coastal Bend, as Summerlin suggested.
“San Patricio County is the preferred site,” a SABIC spokesperson told the Houston Chronicle in January. “The project is advancing study of the San Patricio site.”
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