ORANGE COUNTY, Texas — Orange County officials decided Tuesday to go through with a tax abatement agreement with Chevron Phillips, a company eyeing the county as a possible site for a $5 billion expansion.
This is the second time an agreement has been presented to the court.
In December, it was tabled so officials could find wording comfortable to both sides.
The commissioners decided in late August to turn 1,700 acres of land into a reinvestment zone in a move to make the region more attractive to the company.
Reinvestment zoning is needed for tax abatement.
Before the vote several people spoke both in favor, and against the abatement. Jessica Hill, the executive director of the Orange County economic development corporation, has been negotiating this agreement for almost a year.
"CP Chem has not made a site decision or final investment decision, Orange County is still competing for this project, but we are confident Orange County is the preferred site," Hill said.
She went on to explain that to move on from preferred and be selected, Orange County must present the most logical, cost-effective offer available. She feels the agreement exemplifies the county's obligations to the taxpayers, and Chevron Phillips.
The agreement presented is a chapter 312 tax abatement agreement for a period of 10 years at 100% abatement on the eligible improved value. It exempts all, or part, of the increases in value of property from taxation over the next 10 years.
"There is no rebate being granted to Chevron, Chevron Phillips will pay taxes on all eligible existing value prior to the first year of the abatement term," Hill explained.
Estimated taxable value to be added to the rolls prior to and during the abatement and remain on the rolls during the term of the abatement is $200-$400 million, according to Hill. She says by capturing this value on the front end the actual value abated will be closer to 90 to 93%.
"The total economic output to be Generated in the area from Chevron Phillips operations over the first 20 years is 51 billion dollars. Direct net benefits to the county during that same period is over $170 million," Hill said.
The estimated total payments to West Orange Cove CISD from the company is more than $515 million over the course of 20 years, according to Hill. Although the majority investment is located in West Orange Cove CISD, Hill says Bridge City ISD will see as much as $100 million in additional value.
The real estate property tax manager for Chevron Phillips spoke this afternoon. He feels confident about the support from residents.
"This is the largest single site initiative CP Chems ever looked at, and when we look at site selection and we see the support we’ve gotten here today, it sends a clear picture that Orange County is interested in business," he said.
Chevron Phillips would have a $5.6 billion investment for the plant in Orange County if the company decides to bring the project there.
"This includes $60 million in land cost, $50 million on business personal property, and $100,000,000 taxable inventories," Hill explained.
Chevron Phillips is expected to make a decision at the end of the year or early next year. Construction is expected to take about 70 months, and could create as many as 10,000 jobs, according to Hill.
When completed, Hill says the company will employee no less than 500 permanent workers, with average salaries of $100,000.