Title
Discussion of nominating Rohm & Haas Texas Incorporation to the Office of the Governor Economic Development & Tourism (EDT) through the Economic Development Bank as an Enterprise Project and their planned application submission.
Body
Summary:
The City finds that Rohm & Haas Texas Incorporated meets the criteria for designation as an enterprise project under Chapter 2303, Subchapter F of the Act on the following grounds:
(a.) Rohm & Haas Texas Incorporated is a “qualified business” under Section 2303.402 of the Act since it will be engaged in the active conduct of a trade or business at a qualified business site within the governing body’s jurisdiction, located outside of an enterprise zone and at least thirty-five percent (35%) of the business’ new employees will be residents of an enterprise zone, economically disadvantaged individuals, or veterans; and
(b.) There has been and will continue to be a high level of cooperation between public, private, and neighborhood entities in the area; and
(c.) The designation of Rohm & Haas Texas Incorporated as an enterprise project will contribute significantly to the achievement of the plans of the City for development and revitalization of the area.
It is proposed the following be nominated as Enterprise project under the Texas Enterprise Zone program:
• Name of legal entity for nomination - Rohm & Haas Texas Incorporation
• Amount of capital investment over 5-year designation period - $50 million
• Number of retained jobs - 650
The following summary was provided:
"Rohm and Haas Texas Incorporated plans to invest approximately $50 million in process equipment upgrades and infrastructure improvements. Since the Deer Park facility is the largest manufacturer of methacrylic and acrylic monomers in the world, Dow is looking to invest in various upgrades to the local chemical processes, equipment such as tanks, furnaces, pumps, cooling and control systems. These upgrades will ensure operational efficiency and modern safety conditions for the workforce involved while producing higher performing chemicals and finished goods for consumers. A portion of the investment will go to facility and infrastructure upgrades with the remainder earmarked for advanced process equipment. With the intended investments, no layoffs or downsizing in workforce are contemplated and upon nomination, we commit to maintain our current employment level, which includes approximately 640 full-time employees with plans to add another 10 full-time positions over the course of the designated five-year period."
The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment in economically distressed areas of the state (census block groups with a poverty level greater than 20 percent).
Designated projects are eligible to apply for state sales and use tax refunds on qualified expenditures. Qualified expenditures include building materials, machinery and equipment, electricity, gas and tangible property purchased and consumed in the normal course of business, and taxable services.
The level and amount of refund is related to the capital investment and jobs created at the qualified business site. In addition, local communities must offer incentives to participants under the Enterprise Zone Program, such as tax abatement, tax increment financing, one-stop permitting, and other incentives developed by participating communities.
Communities may nominate projects for a designation period up to five years, not including a 90-day window prior to the application deadline. Employment and capital investment commitments must be incurred and met within the five-year time frame.
Deer Park has previously sponsored multiple Enterprise Zone nominations for local businesses, including:
• Rohm & Haas Texas, Inc.
• Shell Refinery
• Shell Chemical L.P.
• Lubrizol
• PEMEX Refinery
At the August 6, 2024 regular Council Meeting, there will be an agenda item to approve a resolution nominating Rohm & Haas Texas Incorporation to the Office of the Governor Economic Development & Tourism (EDT) through the Economic Development Bank as an Enterprise Project.
Fiscal/Budgetary Impact:
To be determined.
Recommended action
Discussion only in Workshop.