Exxon Mobil Corp. (XOM) just landed a $1.2 billion tax break from a South Texas school board that hopes to entice the Irving, Texas-based multinational oil and gas giant and its Saudi partner Arabia Basic Industries Corp. to build a $9.3 billion petrochemical plant within its district. (See also: Exxon Strikes Deal With Former CEO Rex Tillerson.)
School District: Plant Will Boost Jobs
The six-member Gregory-Portland Independent School District’s board unanimously voted on the mega tax break for the oil company late Tuesday, adding to a preexisting $210 million tax package passed a day prior by San Patricio County commissioners.
“We’re the school board and I thought we were supposed to be educating our kids, but it seems like we’re in the middle of economic development,” said Randy Eulenfeld, the board’s president. “We will take this responsibility and do the best that we can.”
The school board hopes to entice Exxon and Arabia Basic Industries to build a 1,300-acre site in Portland, Texas, just north of the world’s largest ethane steam cracker plant in Corpus Christ, suggesting the the plant will provide thousands of local jobs when it opens in seven years. Opponents of the project, however, indicate the town should refuse to tolerate such massive safety and environmental concerns.
Deal Not Final
The tax breaks, contingent on job creation, would limit the taxable value of the new plant at $90 million in 10 years, reducing the district’s tax revenue from an estimate $120.9 million annually to less than $1.2 million per year. The county’s separate tax abatement package would cover seven years.
While Portland is reportedly a front runner in terms of the location for the new plant, Exxon and its Saudi partner are still considering other options, such as another Texas site in Victoria, and two more possible locations in Louisiana. (See also: State Judge Demands Exxon Hand Over Climate Change Docs.)