WITHDRAWN: School board rejects Annova LNG tax break

The Point Isabel School Board of Trustees listen to public comments. (Dina Arévalo | Staff photographer)

The Point Isabel School Board of Trustees listen to public comments. (Dina Arévalo | Staff photographer)

Port Isabel-South Padre Press

On Tuesday, the Point Isabel School District Board of Trustees voted unanimously to withdraw an application for a tax valuation limitation submitted by Annova LNG.

In June, the Houston-based company submitted an application for the tax abatement under Chapter 313, known as the Texas Economic Development Act. If approved, the incentive would have allowed the tax valuation of the company to be limited to $25 million for 10 years. The company has previously stated the proposed facility represents an investment of $2.9 billion.

Vice President of governmental affairs for Exelon Generation, William Scott. was the lone speaker in favor of the tax abatement at Tuesday evening's school board meeting. (Dina Arévalo | Valley Morning Star).

Vice President of governmental affairs for Exelon Generation, William Scott. was the lone speaker in favor of the tax abatement at Tuesday evening’s school board meeting. (Dina Arévalo | Valley Morning Star).

The Board heard comments from numerous residents opposed to the proposed tax break and a single supporter of the application before retiring to deliberate in executive session for almost an hour. Upon returning to open session, the Board voted unanimously to withdraw the application from the State Comptroller’s Office.

“The community has spoken and we have spoken and we affirmed,” said Trustee Bertha Zamora after the vote, to the applause of those in the chamber.

Representatives from Annova LNG and Texas LNG, another liquefied natural gas company seeking to build an export terminal along the Brownsville Ship Channel, declined comment after the meeting.

“It was pretty much a consensus,” said Board Chairman Mickey Furcron afterwards. “All of members have done a lot of study and research on the issues with LNG and many of them felt that it’s just not the right thing for our area with the wildlife and tourism and the other issues that many people brought up tonight,” he said.

Though the District is not the first public entity to officially oppose the proposed LNG projects, it is the first that stood to lose or gain financially from such a position. “There is quite a bit of financial gain that we could have gotten from that (agreement),” Furcron said. “(It would have been) over $3 million dollars by granting it, in addition to what we would have gotten for them building the project — around $14 million,” he said.

“We considered what the gains would be, because we do get a financial gain if we go with the application, but by the same token you can’t put an amount that justifies the risk,” Zamora said.

The risk Zamora alluded to was one echoed by many residents during public comments. Many feared the facilities could negatively impact the environment of the site, which sits on the only known tract of land used by the federally endangered ocelot in its migrations between Mexico and the United States. Others raised concerns about the potential for industrial accidents and the preparedness capabilities of Laguna Madre first responders.

But for many, the overarching concern was the nature of the tax incentive itself. “These are wealthy, wealthy multibillion dollar companies. They don’t need the tax abatement,” said Kerry Schwartz, president of the South Padre Island Business Owners Association. “Everybody has to pay. There’s no free rides,” he said.

“We have to ask ourselves, ‘What is the most important thing to us? The quality of education of our children or the profits of Exelon shareholders?’,” said local resident Bill Best. Exelon Generation is the parent company of Annova LNG.

Only one person stood to speak in favor of the application, Vice President of governmental affairs for Exelon Generation, William Scott. He assured the Board that Annova LNG is committed to paying its fair share of taxes, adding that the company has yet to make a final investment decision to build the facility. “We will not make a final investment decision to do so until probably at least the first quarter of 2017,” he said. He went on to say the decision would ultimately depend on several ‘key factors.’

“We must have broad community support for this type of project. And you know what? I believe that that support still exists,” he said.

Earlier in the evening, the Port Isabel Economic Development Corporation (EDC) voted to pass a resolution opposing LNG. “It passed unanimously with the members that were present,” said Calvin Byrd, chairman of the EDC. “The board members felt that the community had been very clear about how they felt. … The EDC felt the same way, that the public has pretty much made their voices clear,” he said.

After explaining that the purpose of the EDC was to aid individuals and companies seeking to make economic investments in the City, Byrd said, “The EDC genuinely, I think, felt that this is not good for the business climate in our area in the long term.”

Also the previous Thursday, the Cameron County Commissioners Court voted to table an agenda item that would grant Annova LNG a 10 year tax abatement pending the results of an independent financial analysis.

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Permanent link to this article: https://www.portisabelsouthpadre.com/2015/09/19/withdrawn-school-board-rejects-annova-lng-tax-break/

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