Orange Co. reveals more details about potential plant

February 18, 2020

Beaumont Enterprise - By Kaitlin Bain

The Orange County Commissioners Court had a mantra at Tuesday meeting: The county is open for business, a message the commissioners hoped to send clearly when they unanimously approved a 10-year, 100% tax abatement for a proposed investment from Chevron Phillips Chemical.

After the governing body took the vote — adding to the anticipation that’s been growing for more than a year by giving their approval individually instead of simply voting yes in unison — several members of the standing-room only crowd stood and applauded.

Only two of the many people gathered spoke against the project before the vote was taken, while a third urged the county and company to look to the future when making deals regarding investment in local companies and people.

This doesn’t signal a final investment decision, however. That announcement is expected in the fourth quarter of this year, said Chevron Phillips Real Estate and Property Tax Manager Chaney Moore.

“I wish I could say that if this vote approves the abatement I could come back and say it is Orange. I can’t do that, yet,” he said. “We have some hurdles we still have to clear.”

The full text of the abatement agreement will not be made available until both groups have officially signed it.

But comments by Orange County Economic Development Corp. Executive Director Jessica Hill about the project shed more light on the potential economic impact that could come from the project, which she said has been discussed for more than four years with serious negotiations taking place for more than a year.

Chevron has operated a plant at 5309 FM 1006 since 1955. It employs about 200 people and produces three chemicals that are sold to make plastics and other products.

The estimated $5.6 billion in new investment includes $60 million in land cost, $50 million in business personal property and $100 million in taxable inventories.

The proposed new facility would convert the natural gas liquid ethane into ethylene, the building block of most plastics.

Chevron forecasts that up to 10,000 temporary jobs would be created says that during the construction phase and that, upon completion, no fewer than 500 permanent jobs paying an average of $100,000-plus would be added.

The abatement approved Tuesday is the highest possible under Texas state law. The company has agreed to add improvements to equal between $200 million and $400 million in value before the term of the abatement begins, meaning it will pay property taxes on that amount during the term of the abatement.

“By capturing this value on the front end, the actual value abated will be closer to 90 to 93%,” Hill said to the commissioners.

The total economic outlook expected to be generated over the first two decades is more than $51 billion, with $170 million going to the county and $515 million going to West Orange-Cove CISD, among other entities that benefit.

The abatement agreement also contains language that Chevron Phillips agrees to give preference and priority to qualified local manufacturers, suppliers, vendors, subcontractors and laborers, in addition to other local opportunities. That preference would be qualified quarterly in reports made to the county about the total number of dollars spent on local labor, subcontractors, vendors and suppliers in connection with the project.

“Chevron Phillips is not our cash cow. They are not responsible for fixing problems that have plagued our infrastructure for years,” Hill said. “They are not responsible for building new restaurants and they are not responsible for creating a robust quality of life. We are. But with them, we can.”

Conversation about the potential investment, and extending tax breaks for it, hasn’t always been so obviously positive.

It hasn’t been a year since then-County Judge Dean Crooks announced his resignation to another standing-room only crowd, although fewer of those people waiting to speak were planning to praise to judge’s actions like they did Tuesday.

Crooks had advocated taking a critical look at the return the county would get from offering the company tax breaks, which many residents perceived as an attitude against the plant or economic development.

David Jones, an Orange resident and business owner who also spoke at the meeting where Crooks resigned, was one of many people who on Tuesday urged the commissioners to approve the agreement and Chevron Phillips to make the county its permanent home.

He also urged both groups to make sure provisions are in place to continue agreements and programs that will invest in local people and businesses even after the term of the abatement is up.

“We want you, but not to do what history’s done in the past,” he said. “Engage us. Bring us in.”

Orange County Judge John Gothia told residents that he believes commissioners approved the best deal for the company and the community both. He added that, should Orange County be chosen, this project would have an impact so large and far-reaching that many of the people who attended Tuesday’s meeting won’t even be around to see it come to fruition.

“The availability for our kids and grandkids to have an opportunity to stay here and work because of this hopefully being located in our are is hard for me to imagine,” he said.

Hill said if Orange County is selected as the plant’s final destination, construction would begin in 2020 and be completed in about 70 months, with a phased startup.