Lessons learned from Texas City's past economic development failures

Texas City, Galveston County, state, federal and SSA Marine officials toss dirt during a ceremonial groundbreaking ceremony on April 15, 2004 for the planned Texas City International Terminal that was to be built at Shoal Point. Ten years later the city canceled its lease with SSA Marine after the port was never built.

FILE PHOTO

TEXAS CITY — In his 27 years as the president of the Texas City-La Marque Chamber of Commerce, Jimmy Hayley has been part of several big economic projects announcements.

If all of them had come to fruition, he’d be head of a chamber that had a megaport, copper smelter, Schillterbahn-built water park, minor league professional hockey team, a Lee Trevino golf course and a major home improvement store near a robust Mall of the Mainland as members.

It’s the reality of economic development — even the best ideas sometimes remain just that.

“It is like the saying goes, ‘you have to kiss a lot of frogs before you find Prince Charming,’” Hayley said.

So, after last week’s announcement that Texas City’s Shoal Point is among two sites being considered for a $4.5 billion methanol plant to be built by the Chinese-owned Connell Chemical, there is excitement tempered with cautious optimism.

‘Copper center of the world’

One needs to go back to 1989 to recall when a foreign-owned firm announced that Texas City would be the site for a huge copper smelting plant at what is Virginia Point.

Mitsubishi, based in Japan, was to build Texas Copper. The announcement in January 1998 saw in attendance then U.S. Sen. Phil Gramm, Texas City Mayor Emmett F. Lowry and Mitsubishi’s Senior Managing Director Tokio Yanagida.

Thomas Mackey, a Texas City resident who was president of Key Metals Corp., was the driving force to convince Mitsubishi to built its smelter in Texas City.

He predicted that the city would become “the copper center of the world,” according to Galveston County Daily News reports of the announcement.

Luring the company to Texas City included dinners, lunches, trips to Houston Astros baseball games and even more wining and dinning.

College of the Mainland announced it would offer courses so residents could learn to speak Japanese.

Three years and $8 million later, Mitsubishi cited delays in getting the proper permits from the state and pulled out. In large part, the delays in permits came as residents and environmentalists opposed the construction of the plant.

A delegation of local officials made a trek to Austin to speak to then Gov. Ann Richards. The meeting went nowhere.

Texas City’s shot at being the copper center of the world vanished.

“In all that time Mitsubishi built a new plant in Canada, and the state had not acted on any of its permits in Texas,” Hayley said.

Lessons learned

Chuck Doyle, who was on the city commission at the time of the announcement and would later become mayor, said the Texas Copper fiasco was an “eye-opener” for the city in how it approached economic development projects.

“First thing I tried to do (as mayor) was involve College of the Mainland and brought people in to discuss what went wrong with Texas Copper,” Doyle said.

Doyle took those lessons and applied them in the effort to develop Shoal Point as a container terminal. This time around there was an economic coalition that included city, county and state officials as well as environmental groups.

That included bringing in Jim Blackburn, an environmental attorney who was the head of the Galveston Bay Foundation.

Blackburn was one of the leading opponents to Texas Copper, but signed on to support the megaport at Shoal Point. A plan by the Port of Houston to build Bayport near Seabrook was opposed by Blackburn and other environmental groups.

In 2004, when Carlos Garza was mayor, SSA Marine reached a formal agreement to develop the Texas City International Terminal.

Despite the lessons learned, that project also never became reality. A few weeks ago the city and state ended their exclusive lease agreement with SSA Marine.

That deal was to clear the way for the methanol plant.

Silence is golden, sometimes

While hopeful that Connell will pick the Texas City site, C.B. “Bix” Rathburn, CEO of the Galveston County Economic Alliance, cautiously warns, “this is still very much a competition.”

That’s the risk, Hayley said, of making an announcement too early.

“There’s nothing worse to me than you out and tout some big project and it never happens,” he said. “Someone makes a decision they aren’t going to locate here, and it sends a negative message to other people who ask, ‘Why did they pull out?”

Hayley recalled a time when word got out that a major retailer was looking at property in La Marque. When The Daily News reported it, other cities contacted the company and offered property and incentives.

The retailer, which Hayley did not name, went somewhere else.

Good news helps

There is also the chance that such an announcement sparks other interested parties.

Rathburn said soon after The Daily News reported about the Chinese firm looking at Texas City, he got other companies calling looking for possible sites.

“You have to have patience, but think out of the box,” Doyle said. “You can’t get frustrated by what are considered failures. ... When you have an asset like Shoal Point, you know you have something that can work, but it is all about finding the right company, have the right people in place, the right amount of cooperation.

“And the timing has to be right, too.”


At a glance

Timeline of some big projects that never were

Texas Copper

January 1989 — Mitsubishi announces plans to build a copper-smelting plant in Texas City at Virginia Point to be called Texas Copper

March 1992 — Citing a drawn-out process to gain state and federal approval, the company kills the project

Waterpark, hockey rink in La Marque

June 1998 — Brothers Jim and Mike McIver announce plans to partner with the parent company of Schillterbahn to build a water park next to Gulf Greyhound Park in La Marque. The city also announces plans to attract an arena that would house a possible minor league hockey team on McIver-owned land across the street.

2000 — Neither project gets beyond announcements, but Walmart moves from its Texas City site to property across the road from Gulf Greyhound Park. Last year Sam’s moved to property next door.

Texas City’s megaport

April 2004 — SSA Marine and the city of Texas City reach an agreement to build a container terminal at Shoal Point.

July 2014 — The city and SSA Marine cancel the lease. Despite years of marketing the site, the megaport never was built.

BP’s island liquefied natural gas

September 2004 — BP announces plans to build an liquefied natural gas terminal on property it purchased from the Port of Galveston on Pelican Island.

August 2006 — After years of opposition from environmental groups and people concerns about LNG safety, BP announces it has shelved LNG terminal plans. The company said protests weren’t a factor in its business decision.

Contact Mainland Editor T.J. Aulds at 409-683-5334 or tjaulds@galvnews.com.

(4) comments

Andy Aycoth

So what do you do about that? Environmentalist who oppose industry. People locally do not trust industry ?
So I say let a those people walk to work because by driving you supporting industry.

Andy Aycoth

Come on TC people get behind this project! Think of all the possible lawsuits in the future.

DonnieB

Yes Alvinbr62, TC will get this project and add more direct and indirect jobs to the city and county. The lawsuits would only come from people with attitudes like you, people that have no idea what they're talking about and look for free money anyway they can get it. And for environmental complaints, they will use natural gas, not oil, to produce methanol, and its miles away from the main city. And if people are eating fish off the canal side of the dike now, they will do the same after it's built. But I guess, after it's built (if it's built), you'll be on here complaining as to why TC gets so much money and your city does not. And that would be because of people like you that run companies off and then pull you pants up and tell you friends and family "I did that! Don't you wish you were as cool and tough as me?" You sound like all you want is attention.

Andy Aycoth

Rick Perry will get this done no doubt by offering 100 of thousands in tax incentives!

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