Orange County, Texas approves step toward tax abatement for Chevron Phillips Chemical’s $8 billion investment

September 6, 2019

Beaumont Enterprise | Kaitlin Bain and Jacob Dick

Chevron Phillips Chemical, Orange, Texas

Orange County can now begin official negotiations for a tax abatement agreement with Chevron Phillips for a possible future plant near the Orange County Airport — the first time the county has been able to publicly acknowledge the company is looking at the site.

County commissioners on Tuesday voted unanimously to establish a reinvestment zone in the area bounded by Orangefield and Foreman roads, Edgar Brown Drive and FM 1006 — the first step necessary before entering into a tax abatement agreement.

“They’re to the point where they’re at least ready to acknowledge that they’re looking at this piece of property for their facility even though they have not chosen it officially yet,” County Judge John Gothia said after the meeting.

But not everyone was so excited.

Pattie Smith Barras, who lives near the proposed site, is concerned that the county hasn’t fulfilled her standards of transparency in discussions thus far.

“In the interest of the total community as far as taxes, as far as traffic it’s going to cause, we need more transparency and information on this,” she said.

She also mentioned concerns about any air quality issues the plant could bring.

Gothia assured her that there haven’t been any official discussions about an abatement agreement to this point.

The reinvestment zone lasts for five years and is necessary for the landowner to enter into an abatement agreement with the county. However, it does not have to be renewed for the length of any established agreement, said county Economic Development Corp. director Jessica Hill.

Typically, the county begins to pursue a reinvestment zone if a company begins talking about the possibility of abatements, because state law mandates that such tax break agreements cannot be brokered until a reinvestment zone is in place.

Since the beginning of the year, Chevron has acquired at least 2,022 acres of land in the reinvestment zone area. It was around that time frame that the company also confirmed Orange was a finalist for a proposed $8 billion chemical facility.

Preparations that seem to be for a potential plant on the acquired land have been ongoing, including a recent request from Chevron to Orange County to survey land near the purchased property for a pipeline and asking the city of Orange to deannex 400 acres owned by Chevron Phillips so the county can establish the reinvestment zone.

The company expects a final investment decision no later than 2021, followed by full funding and the award of engineering, procurement and construction contracts with a targeted startup of the new facility in 2024.

The project could create about 9,000 construction jobs and about 600 full-time permanent jobs, according to the company.

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