Covestro 313 agreement amendment means project expanding to $1.1 billion
September 12, 2018
An amendment to a Chapter 313 agreement made between Goose Creek CISD and Covestro is expanding to $1.1 billion, attorneys working on the agreement said.
Sara Leon with Powell & Leon, LLP said the scope was initially round $650 million in new investments within the school district boundaries, with a total property value at the end of the construction phase of $580 million.
“It’s almost twice than before,” Leon said. “Some of that investment is not taxable like engineer costs.”
The $1.1 billion will assist the district in paying off facilities-related obligations and bond debt, Leon said.
The agreement with Covestro includes construction of a facility to produce polymers and create 25 permanent jobs.
According to the state tax code, these incentives were created to encourage large-scale capital investments in the state, create new, high-paying jobs to ultimately strengthen and improve the overall performance of the economy of the state.
“The investment is increasing, but they are also adding some processes to the facility,” Leon said. “The initial application, they were going to import some of the raw materials, but now they are going to manufacture the raw materials here. It is going to save money in terms of the product they are manufacturing and provide more money to construct.”
Leon said the timeline for the construction is still the same. Building is expected to begin in 2023.
“There is a limitation period for 10 years; therefore it is limited to $100 million of value, and the company has to maintain a viable presence, meaning it has to stay in business for five years later or pay back the taxes,” Leon said.
Leon said the Texas Comptroller’s office stated over a 25-year period, the tax benefit to the district is $139 million.
The board approved two items to approve the amendment. One was to enter the amended findings and the other was to approve the amended agreement.
Both passed unanimously.