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City OKs FutureGen tax exemption

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Posted: Wednesday, May 9, 2007 12:00 am

Odessa City Council unanimously approved constructing a water pipeline from Odessa to the FutureGen site at Penwell if that site is the chosen one to host the

$1 billion federal demonstration project.

But when the matter of exempting the Penwell property for the world’s first near-zero emissions power plant came up, one council member parted ways.

District 5 Councilman Michael Sanchez voted against the matter, saying, “I’m totally against this corporate welfare.

“I’m not against FutureGen,” Sanchez added after the meeting. “I just think if they come here they ought to be good corporate citizens and pay their taxes like everybody else,” he added.

The vote on the 10-year 100 percent exemption from municipal ad valorem taxes was approved with only Sanchez dissenting.

Economic Development Director Neil McDonald indicated in the proposal that if the Texas site is chosen, a reinvestment zone would have to be created in Ector County and the tax abatement agreement approved. The Penwell site is now among four remaining sites in the nation competing for the facility.

District 2 Councilman James Goates countered Sanchez, noting that since the Odessa Development Corp. was formed in 1997 the city has invested $12 million in incentives for new business and industry.

“By 2023, we will collect $243 million as a return on our investment,” Goates said, “and that with no change in the tax rate.”

In 1997, Odessa voters committed a one-quarter cent sales tax to economic development.

“At end of 10 years, there is a $1 billion plant and everybody gets a windfall of revenue,” McDonald said.

On the proposal to commit an assured water source for the facility, the resolution proposes that the City of Odessa commits to providing 3.5 million gallons of water per day to the FutureGen project.

City Manager Richard Morton said if the Penwell site is chosen for the plant, the city would build a water line from the water treatment facility on 42nd Street to the FutureGen plant.

He said it would be 10-13 miles in length and cost $7-9 million.

Morton said the pipeline and water would be paid for with the water sold to FutureGen.

On that proposal, McDonald said, “It is absolutely a major step to ensure we have a way of providing water for FutureGen. No water, no FutureGen.”

In other action, the council:

>> Held a public hearing on a request by The Morrison Group for annexation by the city of about 58 acres north of the intersection of Business Interstate 20 and the old Bankhead Highway.

That item also includes a request by the city for annexation of 231.02 acres of land northeast of the intersection of Grandview Avenue and Yukon Road and encompasses the Ratliff Ranch Golf Course. There was no vote after the hearing and Assistant City Manager James Zentner said there will be more hearings on the proposed annexation in the future.

>> Approved a request by Leeco Properties for original zoning on property southeast of the intersection of State Highway 191 and Billy Hext Road.

>> Approved a request by DJK Inc. for original zoning on property east of the intersection of State Highway 191 and Faudree Road.

>> Approved a consent agenda that included the city’s comprehensive annual financial report, awarding a contract for auctioneering services to Rene’ Bates Auctioneers Inc. of McKinney for $221,561, appropriated $50,000 in interest earnings for McKinney Park improvements, awarded a bid for intersection improvements to National Concrete Co. of Midland for $204,966, and accepted a $11,981 STEP Click It Or Ticket grant.

Odessa, TX

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