Work on an anticipated $800 million ammonia plant in Texas City will begin in 2018 after city commissioners on Wednesday approved a 10-year tax abatement.
An attorney hired by the city to execute the abatement agreement briefly laid out its basic details before commissioners voted on the plan. No residents spoke about the project, nor did commissioners make any lengthy comments.
The Texas City Commission voted unanimously to approve a Chapter 312 tax abatement agreement and a Chapter 380 Economic Development and Performance Agreement with Gulf Coast Ammonia LLC and Eastman Chemical Texas City Inc.
Commissioners also voted to amend the boundaries of Texas City Gulf Coast Reinvestment Zone 1, where the plant will be built.
Gulf Coast Ammonia was formed in a partnership between Miami-based Agrifos and Borealis AG, Europe’s second-largest producer of polyethylene and polypropylene. The company plans to build an ammonia plant on land it’s leasing from Eastman Chemical Co. at 201 Bay St. S., Mayor Matt Doyle said earlier this week.
Once completed, the facility would produce about 1.35 million metric tons a year of ammonia, according to documents released to The Daily News. The plans also include a terminal dock to ship ammonia products to and from the plant, according to a U.S. Army Corps of Engineers permit application.
Texas City’s 10-year tax abatement agreement with Gulf Coast Ammonia includes a stipulation that the company pay the city a lump sum of money during each of those years, said Chris Nichols of Nichols Firm, a Houston law firm hired by the city to execute the contract.
The tax abatement will begin 2021, Nichols said. Under the terms of the agreement, the company will pay a lump sum each year for the 10 years to the city in lieu of paying property taxes so long as the value of the property is at least $450 million, Nichols said.
Those payments each year could range between $750,000 and $1 million depending on the value of development, Nick Finan, Texas City director of management services, said earlier this week. The payment to the city would be equal to about 40 percent of what the company would otherwise pay, Nichols said.
It works out to an effective 60 percent reduction in taxes the company would pay to the city, Nichols said. Gulf Coast Ammonia officials have not specified how many jobs would be created by the facility, but it could range between 25 and 50 full-time positions, Finan said.
The company is making few public statements about the operations now, said Alberto Cardenas, an attorney for Vincent & Elkins, a Houston law firm representing Gulf Coast Ammonia.
The abatement is based on economic capital created, not the number of jobs, Cardenas said. But the plant would provide jobs during construction and an unspecified number of full-time positions once built, he said.
The company will begin construction in 2018 with plans to begin operations in late 2020, Cardenas said.