HomeMy WebLinkAboutRES 21-190RESOLUTION NO. 21-190
WHEREAS, on July 13, 2021, the City Council of the City of Beaumont, Texas
passed Ordinance No. 21-042 designating an area as the Arbor Reinvestment Zone
pursuant to the Texas Redevelopment and Tax Abatement Act (Texas Tax Code,
Chapter 312); and,
WHEREAS, the City of Beaumont has been approached by Arbor Renewable
Gas, LLC with a proposal for the creation and maintenance of their plant facility situated
between Highway 347 and Highway 69 South, to the southwest of the OCI Methanol
Plant property; and,
WHEREAS, this project is intended to bolster local economic development by
stimulating business and commercial activity within the city; and,
WHEREAS, the developers have approached the City seeking economic
development incentives in the form of ad valorem tax abatements and have filed an
application with the City for Chapter 312 economic development incentives; and,
WHEREAS, the application has been reviewed and it has been determined that
the proposed project does satisfy the purpose and goals of the program in that it will
enhance the City's economic base and diversify and expand job opportunities, and,
WHEREAS, in order to maintain sufficient controls to ensure that the public
purpose is carried out, it is necessary to enter into a tax abatement agreement with the
developer establishing the expectations and terms of the transaction; and,
WHEREAS, the City Council is of the opinion that approval of an application for
Chapter 312 economic development incentives and entering into a tax abatement
agreement with Arbor Renewable Gas, LLC for the creation and maintenance of their
plant facility situated between Highway 347 and Highway 69 South, to the southwest of
the OCI Methanol Plant property is in the best interest of the City of Beaumont and its
citizens. Said Tax Abatement Agreement is substantially in the form attached hereto as
Exhibit "1" and made a part hereof for all purposes;
NOW, THEREFORE, BE IT RESOLVED BY THE
CITY COUNCIL OF THE CITY OF BEAUMONT:
THAT the statements and findings set out in the preamble to this resolution are hereby,
in all things, approved and adopted; and,
THAT approval of an application for Chapter 312 economic development
incentives for Arbor Renewable Gas, LLC for the creation and maintenance of their
plant facility situated between Highway 347 and Highway 69 South, to the southwest of
the OCI Methanol Plant property is hereby approved, and,
BE IT FURTHER RESOLVED THAT the City Manager be and he is hereby
authorized to execute a tax abatement agreement with Arbor Renewable Gas, LLC
granting a 90% ad valorem tax abatement for ten (10) years towards Unit 1 and a 100%
ad valorem tax abatement for ten (10) years towards Units 2 through 4 for the creation
and maintenance of their plant facility situated between Highway 347 and Highway 69
South, to the southwest of the OCI Methanol Plant property.
The meeting at which this resolution was approved was in all things conducted in
strict compliance with the Texas Open Meetings Act, Texas Government Code, Chapter
551.
PASSED BY THE CITY COUNCIL of the City of Beaumont this the 10th day of
August, 2021.
- Mayor Robin Mouton -
TAX ABATEMENT AGREEMENT FOR PROPERTY LOCATED
IN THE ARBOR REINVESTMENT ZONE
This Tax Abatement Agreement (hereinafter referred to as 'the Agreement') is
made, entered, and executed between The City of Beaumont, Texas (hereinafter referred
to as the "City"), and Arbor Renewable Gas, LLC, (hereinafter referred to as "Arbor'),
the owner of taxable property in Beaumont, Jefferson County, Texas, located in the Arbor
Reinvestment Zone as described below ("Arbor Reinvestment Zone").
I. AUTHORIZATION
This Agreement is authorized by the Texas Property Redevelopment and Tax
Abatement Act, Tax Code, Chapter 312, V.T.C.A., as amended, and by authorization of
the City following the designation of the Arbor Reinvestment Zone.
H. DEFINITIONS
1. As used in this Agreement, the following terms shall have the meanings set forth
below:
a. The "2021 Certified ADWaised Value" means the January 1, 2021 value
of the property within the Reinvestment Zone, as certified by the
Jefferson County Appraisal District as of that date and described in
Paragraph 3 and Exhibit g.
b. °Improvements" means the buildings or portions thereof and other
improvements, including fixed machinery, equipment and process units,
used for commercial or industrial purposes that are constructed by Arbor
on the property after December 31, 2021.
C. "ConstructionPhase" means a material and substantial improvement of
the property which represents a separate and distinct construction
operation undertaken for the purpose of constructing
the Improvements. The period of Construction Phase ends when
commercial operation of the New Facility commences as defined by
the completed installation of constructed Eligible Property that serves
the purpose for which it is designed.
d. "Abatement' means the full or partial exemption from ad valorem
taxes of certain property in a Reinvestment Zone designated for
economic development purposes.
EXHIBIT "1"
"Eligible Property" means the buildings, structures, fixed machinery,
equipment and process units, construction in progress and
hnprovements necessary to the operation and administration of the
New Facility.
P. "New Eligible Property " means Eligible Property, the construction of
which commences subsequent to the date of execution of this
Agreement. A list of the New Eligible Property is set forth in the
Application for Tax Abatement originally filed by Arbor, within the
City of Beaumont, Texas ("the Application"), which is incorporated
herein by reference and made a part hereof. During the Construction
Phase of the New Eligible Property, Arbor may make such change
orders to the New Eligible Property as are reasonably necessary to
accomplish its intended use.
g. "Ineligible Property" means land, inventories, supplies, tools,
furnishings, and other forms of movable personal property, including
but not limited to, vehicles, vessels, aircraft, housing, hotel
accommodations, deferred maintenance investments, improvements
for the generation or transmission of electrical energy not wholly
consumed by a new facility or expansion, any improvements including
those to produce, store, or distribute natural gas, fluids or gases,
which are not necessary to the operation of the New Facility, and
property that has an economic life of less than ten (10) years.
h. "Affiliates" of any specified person or entity means any other person
or entity which, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under direct or
indirect common control with such specified person or entity. For
purposes of this definition , "control' when used with respect to any person
or entity means (i) the ownership, directly or indirectly, or fifty percent
(50%) or more of the voting securities of such person or entity, or (ii) the
right to direct the management or operations of such person or entity,
directly or indirectly, whether through ownership (directly or indirectly)
of securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meaningscorrelative to the foregoing.
2. The Tax Abatement Policy for granting tax abatements in a reinvestment zone
created in Beaumont, Jefferson County, Texas, which was adopted via Resolution No. 20-
181 by the City Council of the City of Beaumont September 8, 2020, is incorporated
herein by reference, together with any applicable amendments. All definitions set forth
therein are applicable to this Agreement.
e. "Eligible Property" means the buildings, structures, fixed machinery,
equipment and process units, construction in progress and
Improvements necessary to the operation and administration of the
New Facility.
"New Eligible Property " means Eligible Property, the construction of
which commences subsequent to the date of execution of this
Agreement. A list of the New Eligible Property is set forth in the
Application for Tax Abatement originally filed by Arbor, within the
City of Beaumont, Texas ("the Application"), which is incorporated
herein by reference and made a part hereof. During the Construction
Phase of the New Eligible Property, Arbor may make such change
orders to the New Eligible Property as me reasonably necessary to
accomplish its intended use.
g. "Inelieible Property" means land, inventories, supplies, tools,
furnishings, and other forms of movable personal property, including
but not limited to, vehicles, vessels, aircraft, housing, hotel
accommodations, deferred maintenance investments, improvements
for the generation or transmission of electrical energy not wholly
consumed by a new facility or expansion, any improvements including
those to produce, store, or distribute natural gas, fluids or gases,
which are not necessary to the operation of the New Facility, and
property that has an economic life of less than ten (10) years.
"Affiliates" of any specified person or entity means any other person
or entity which, directly or indirectly, through one or more
intermediaries, controls, or is controlled by, or is under direct or
indirect common control with such specified person or entity. For
purposes of this definition, "control" when used with respect to any person
or entity means (i) the ownership, directly or indirectly, or fifty percent
(50%) or more of the voting securities of such person or entity, or (ii) the
right to direct the management or operations of such person or entity,
directly or indirectly, whether through ownership (directly or indirectly)
of securities, by contract or otherwise, and the terms "controlling" and
"controlled" have meaningscorrelativeto theforegoing.
2. The Tax Abatement Policy for granting tax abatements in a reinvestment zone
created in Beaumont, Jefferson County, Texas, which was adopted via Resolution No. 20-
181 by the City Council of the City of Beaumont September 8, 2020, is incorporated
herein by reference, together with any applicable amendments. All definitions set forth
therein are applicable to this Agreement.
III. SUBJECT PROPERTY
3. The Reinvestment Zone is an area within Beaumont, Jefferson County, Texas,
comprising approximately 53.54 acres of land. The Arbor Reinvestment Zone was
designated by the City under Ordinance No. 21-042 dated July 13, 2021, a copy of which
is attached hereto as Exhibit C and is hereby incorporated.
The 2021 Certified Appraised Value is:
Land Only $8,545
Improvements $0
Personal Proper[v $0 (includes Inventory)
The 2021 Certified Appraised Value is subject to change based upon final certification
of the values by Jefferson County Appraisal District. Upon certification, by consent of
the parties, the 2021 Certified Appraised Value will be attached to Exhibit B.
IV. VALUE AND TERM OF AGREEMENT
4. Arbor anticipates this project will entail construction of the fast of up to four separate
units with an investment for unit 1 of $325 million and 20 jobs (and all four units totaling up
to $1.15 billion and 56 jobs), with construction on unit 1 starting by the last day of March
2022, and construction start dates for each unit set sequentially over a period not to exceed six
years. In order to incentivize construction of all four units in the City of Beaumont, the City
has developed a tax abatement schedule where Arbor will receive the benefit of a tax
abatement for each unit except that the abatement term for any individual unit shall not exceed
ten (10) years_ Each unit will be assigned its own individual tax account by the Jefferson
County Appraisal District.
The Term of the Abatement pursuant to this Agreement (the "Abatement Term") for each unit
shall begin on the date dictated by the construction completion schedule applicable to that unit
and shall terminate on the date dictated in the abatement schedule applicable to that unit,
unless sooner terminated pursuant to other provisions of this Agreement.
City will request that the Jefferson Central Appraisal District establish discrete account
numbers for each unit to facilitate efficient administration of this Agreement.
In each year that this Agreement is in effect, the amount of abatement shall be an amount
equal to the percentage indicated below. The appraised value, as defined in the Property
Tax Code, of New Eligible Properties comprising each unit shall be abated in accordance
with the following scale which is also found in Exhibit D:
UNIT I
UNIT 2
UNIT 3
UNIT 4
CONSTR
CONSTR
CONSTR
CONSTR
STARTQ122
STARTQ124
STARTQ126
STARTQ127
S600MIL
SLISBR,
$875 MIL
5325 MI
CUMULATN
CUMULATIV
CUMULATIVE
E
E
32
44
56
TAX
20JOBS
CUMULATIV
CUMULATIVE
CUMULATN
YEAR
EJOBS
JOBS
EJOBS
YEAR
Percentage of
ABATEPI
Value Abated
---
YEAR Perceutage of
2024
1
90
2025
2
90
2026
3
90
A13ATID Value Abated
1 100
2 100 YEAR Percentage o[
2027
4
90
2028
5
90
ABATED Value Aba@d
2029
6
90
3
100
1
100
YEAR
Percentage of
ABATED
Value Abated
2030
7
90
4
100
2
100
1
100
2031
8
90
5
100
3
too
2
100
2032
9
90
6
100
4
100
3
100
2033
10
9V
7
1 100*
5
100*
4
100*
2034
8 100
_ 9 101
10 ]00*"
_
6
100
5
100
2035
7
110
6
100
2036
8
100**
7
100**
2037
9
100
8
100
2038
10
]00***
9
100***
2039
10
100
*LASTABATEMFNT YEARFORUNIT I
* *LAST ABATEMENT YEAAFOR UNIT 2
* **LAST ABATEMENT YEARFOR UNIT 3
V. TAXABILITY
During the period that this tax abatement is effective ("abatememperiod"):
The value of Ineligible Property shall be fully taxable;
The appraised value, as defined in the Property Tax Code,
of New Eligible Property shall be abated as set forth above
under the section entitled "VALUE AND TERM OF
AGREEMENT."
VI. CONTEMPLATED IMPROVEMENTS
6. As set forth in the Application, which is incorporated herein for all purposes,
Arbor represents that it will construct up to four units in four phases. The approximate
cost of the first unit is $325 million, with each additional unit costing approximately $275
million (for a total of $1.15B for all four units). During the Construction Phase, Arbor may
make such change orders to the project as are reasonably necessary. All Improvements
shall be completed in accordance with the Application and all applicable laws,
ordinances, rules, or regulations. Arbor agrees to make bidding information available to
qualified local contractors, vendors, manufacturers and labor and to conduct pre -bid
meetings from time to time with potential local bidders and suppliers of services and
materials for the project.
VII. EVENTS OF DEFAULT
7. During the abatement period covered by this Agreement, the City may declare a
default hereunder by Arbor if Arbor (i) fails to commence construction of the first unit
within one (1) year from the date this Agreement is executed or (ii) fails to construct the
New Facility or (iii) fails to comply with any of the material terms of this Agreement, or
(iv) if any representation made by Arbor in this Agreement is false or misleading in any
material respect.
&. If the City declares that Arbor is in default of this Agreement, the City shall notify
Arbor in writing. If such default is not cured within sixty (60) days from the date of such
notice ("Cure Period"), then this Agreement may be terminated. In the case of a default
for causes beyond Arbor's reasonable control which cannot with due diligence be cured
within the Cure Period, the Cure Period shall be deemed extended if Arbor (i) shall notify
the City of Arbor's intention to institute steps reasonably necessary to cure such default,
(ii) shall proceed to cure such default, and (iii) shall submit a proposed schedule for the
completion of the New Facility, including the estimated date for completion of the New
Facility, a reasonable explanation concerning the reason for the delay, and a reasonable
estimate of the overall percent of the New Facility that is completed as of the date of
such notice.
9. In the event Arbor (i) allows its ad valorem taxes on the New Facility to become
delinquent or fails to timely and property follow the legal procedures for the protest and
appeal of the ad valorem taxes on the New Facility or (ii) defaults under this Agreement
and fails to cure, this Agreement may then be terminated.
In the event of termination of this Agreement pursuant to the provisions of this paragraph,
all taxes previously abated by virtue of this Agreement will be recaptured and paid within
sixty (60) days of the termination, together with penalties and interest as required by the
Texas Property Tax Code.
10. In the event the New Facility is completed and begins commercial operations, but
subsequently discontinues operations for any reason excepting Fire, explosion, or other
casualty, accident, or natural disaster, force majeure or governmental mandate, for a
period of one (1) year during the abatement period, then this Agreement shall terminate.
In the event of termination pursuant to the provisions of this paragraph, the abatement of
the taxes for the calendar year during which the New Facility no longer operates shall
terminate, but there shall be no recapture of prior years' taxes abated by this Agreement.
The taxes otherwise abated shall be paid to the City prior to the delinquency date for such
year. In no event shall Arbor be required to pay such taxes within less than sixty (60) days
of the termination.
VIIl. ADMINISTRATION
11. This Agreement shall be administered on behalf of the City by its City Manager.
Upon completion of the New Facility, the City Manager shall annually evaluate the New
Facility to ensure compliance with this Agreement.
The Chief Appraiser of the Jefferson County Appraisal District is required to annually
determine (i) the taxable value pursuant to the terms of this abatement of the real and
personal property comprising the Arbor Reinvestment Zone and (ii) the full taxable value
without abatement of the real and personal property comprising the Arbor Reinvestment
Zone. The Chief Appraiser is required to record both the abatement taxable value and the
full taxable value in the appraisal records. The full taxable value listed in the appraisal
records shall be used to compute any recapture. Each year Arbor shall cooperate with the
Chief Appraiser and furnish him or her with information reasonably requested
pursuant to Chapter 22, Tax Code, V.T.C.A. Such information shall also be provided to
the City to facilitate evaluation for compliance with this Agreement.
12, If after notice of default and failure to cure, the City terminates this Agreement, it
shall provide Arbor written notice of such termination. In the event of termination, Arbor
may file suit in the Jefferson County District Court appealing termination within ninety
(90) days after receipt from the City of written notice of termination. If an appeal is
filed, Arbor shall remit to the City within sixty (60) days after receipt of the notice of
termination, any recaptured taxes as may be payable during the pendency of the
litigation under Section 42,08, Tax Code, V.T.C.A. If the final determination of the
appeal increases Arbor tax liability, Arbor shall pay the additional tax to the City
pursuant to Section 42.42, Tax Code, V.T.C.A. If the final determination of the appeal
decreases Arbor tax liability, the City shall refund to Arbor the difference between the
amount of tax paid and the amount of tax for which Arbor is liable together with interest
pursuant to Section 42.43, Tax Code, V.T.C.A,
IX. ASSIGNMENT
13. Arbor may assign this Agreement to an Affiliate without the written consent of the
City, provided that Arbor shall provide written notice of such assignment to the City.
Except as provided in the immediately preceding sentence, Arbor may assign this
Agreement with the written consent of the City, which consent shall not be unreasonably
withheld, delayed or conditioned. Any assignment shall provide that the assignee shall
irrevocably and unconditionally assume all the duties and obligations of the assignor upon
the same terms and conditions as set out in this Agreement. No assignment shall be
approved if Arbor or the assignee is delinquent in ad valorem taxes due the City.
X. NOTICE
14, Any notice required to be given under the provisions of this Agreement shall be
in writing and shall be served when it is deposited, enclosed in a
wrapper with the postage prepaid thereon, and by registered or certified mail, return
receipt requested, in a United States Post Office, addressed to the City or Arbor. If
mailed, any notice shall be deemed to be received three (3) days after the date of deposit
in the United States Mail. Unless otherwise provided in this Agreement, all notices shalt
be delivered to the following addresses:
To Arbor:
OWNER: Mr, Trey Fielder
EVP Project and Site Development
Arbor Renewable Gas
1800 Bering Drive
Suite 510
Houston, TX 77057
With a copy to: Megan Gallien
Griffith, Moseley, Johnson
2901 Turtle Creek Drive, Ste 445
Port Arthur, TX 77642
To the City: City of Beaumont
Kyle Hayes
City Manager
801 Main
Beaumont, TX 77701
With a copy to: Tyrone Cooper
City Attorney
801 Main
Beaumont, TX 77701
Chris Boone
Director of Planning & Community Development
801 Main
Beaumont, TX 77701
Either party may designate a different address by giving the other party ten (10)days
written notice.
XI. AUTHORITY
15. Each of the parties hereto represents and warrants to the other party that
(i) it has all requisite power and authority to execute and deliver, to perform its
obligations under and to consummate the transactions contemplated by this Agreement
and (ii) the execution and delivery of this Agreement, the performance of its obligations
under and the consummation by each party of the transactions contemplated by this
Agreement have been duly authorized by all requisite corporate authority on the part of
Arbor and by all requisite governmental authority on the party of the City and (iii) upon
execution and delivery of this Agreement, this Agreement will constitute valid and
binding legal obligations of such parry.
XII. DATE
16. This Agreement may be executed in counterparts and the effective date of
the Agreement shall be the date the City executes this Agreement, so authorizing, on the
date of the countersignature hereto by the Manager of the
City of Beaumont on this day of 2021.
XIIL MISCELLANEOUS
17. In the event any section, subsection, paragraph, sentence, phrase or word herein is
held invalid, illegal or unconstitutional, the balance of this Agreementshall stand, shall
be enforceable and shall be read as if the parties intended at all times to delete said invalid
section, subsection, paragraph, sentence, phrase or word.
18. The City agrees to record certified copy of this Agreement in the Deed Records of
Jefferson County, Texas,
19. This Agreement shall be construed under the laws of the State of Texas. Venue for
any action under this Agreement shall be the State District Court of Jefferson County,
Texas.
20. This Agreement shall be subject to change, modification or, except in the event of
default which has not been cured as provided herein, termination, only with the mutual
written consent of the City and Arbor.
21. SEVERABILITY
In the event any provision of this AGREEMENT is illegal, invalid, or unenforceable under
present or future laws, then, and in that event, it is the intention of the Parties hereto that
the remainder of this AGREEMENT shall not be affected thereby, and it is also the
intention of the Parties to this AGREEMENT that in lieu of each clause or provision that
is found to be illegal, invalid, or unenforceable, a provision be added to this
AGREEMENT which is legal, valid, and enforceable and is as similar in terms as
possible to the provision found to be illegal, invalid or unenforceable.
22. This complete Agreement has been executed by the parties in multiple originals,
each having full force and effect
Arbor Renewable Gas, LLC
By:
(Signature)
Tim Vail, CEO
Date
City of Beaumont
By:
(Signature)
Kyle Hayes
City Manager
ATTEST:
(Signature)
(Printed Name and Title)
Executed in duplicate this day of
EXHIBIT A "Description of Project and Owner Property"
Description of Project
Applicant plans to design and construct a manufacturing facility that will utilize woody biomass as a
feedstock. The process will produce renewable syngas, which can be further processed into either renewable
gasoline or renewable hydrogen. The project will include up to four units, with a total investment of up to
$1.15 billion.
The projected investment for the first unit is approximately $319,650,000, not including $5,350,000 for the
purchase of the project site, which will accommodate all four units. The total estimated investment for unit
1, including the land, is $325,000,000.
Unit I will employ 20 new permanent employees, averaging an annual base salary of $83,000, and
consisting of a facility manager, office manager, operators, mechanic and an electrician. The construction
phase of the project could create up to 300 peak construction jobs with opportunities to be built by local
contractors, laborers, vendors and suppliers.
The Company plans to build an additional three units at the same site over a six -year period, with an
investment of approximately $275 million for each unit, creating an additional 12 permanent employees at
each unit, with salaries averaging $83,000.
The four units would employ a total of 56 new permanent employees and the total estimated investment for
the units is an estimated $1.15 billion.
Construction start for unit 1 is estimated to be Ql 2022.
Construction start for unit 2 is estimated to be Q12024.
Construction start for unit 3 is estimated to be Q12026.
Construction start for unit 4 is estimated to be Q12027
The project will process woody biomass into syngas, which will be converted into crude methanol and
finally into gasoline, LPG and CO2- Alternatively, the plant can transport renewable syngas or the syngas be
further processed to create hydrogen and Co,
The primary product will be renewable gasoline. If the facility manufactures renewable industrial hydrogen,
that product is at pipeline specification purity and pressure, molecularly identical to natural gasproduced
hydrogen, and becomes a fungible product once in the pipeline. The facility will also produce CO2 at
industrial scale.
The unit will produce very few emissions, as the majority of the CO2 produced will be captured and
sequestered in an approved storage facility. Because of this, the product manufactured at the facility is
considered to be carbon negative, meaning that it removes more carbon from the atmosphere than it
produces.
Customers can then use this carbon negative attribute to offset the environmental impacts of thew own
processes.
During normal operations, the facility will produce three waste gas streams and LPG. Applicant will burn
these in a gas turbine to generate renewable electricity for use by the facility. Though Applicant is
not primarily engaged in activities related to renewable energy electric generation, Applicant will be
producing a continuous 11.5 megawatts of renewable electricity, which the facility will utilize to meet over
75 percent of the facility's power needs and will purchase less than 25 percent of the facility's power needs
from the grid.
Significant components of the facility would include;
• process and final product storage tanks
• wood grinding and processing
• biomass gasification island
• methanol synthesis plant
• gasoline production
• acid gas removal system
• steam turbine power generation
• other chemical processing equipment
• Compressors
• Motors and motor control centers
• Process control systems
• Waste beat recovery boiler
• Flare stack
• Refining columns
• Pollution control equipment
• CO2 capture equipment
• Process control buildings
• Warehouse, maintenance and other buildings
• Electric wood grinders
• Wood dryers
Owner Property
The construction of the facility would be constructed on the OWNERS land, located within the City of
Beaumont's Municipal Boundaries and within the boundaries of the Arbor Reinvestment Zone.
EXHIBIT B "Base Year Property"
The reinvestment zone does not contain any existing improvements. The base year taxable
value as certifted for January 1, 2021 will be attached, by consent of the parties, when same is
calculated and adopted by the Jefferson County Appraisal District.
EXIMITC "Reinvestment Zone"
EXHIBIT D "Tax Abatement Schedule"
UNIT
UNIE2
UNIT
UN1T4
CONSTR
CONSTR
CONSTR
CONSTR
STARTQ122
STARTQ124
START 126
STARTQ127
$600MIL
$1.15BJL
$875 MIL
$325 MI
CUMULATn'
COMULATN
CUMULATIVE
E
E
32
44
56
TAX
20JOBS
CUMULATIV
CUMULATIVE
CUMULATN
YEAR
EJOBS
JOBS
EJOBS
YEAR
Percentage of
ABATED
Value Abated
2024
1
90
2025
2
90
YEAR
Percentage of
2026
3
90
ABATED
Woe Abated
WAR Percentage of
2027
4
90
1
100
2028
5
90
2
100
ABATED Value Abated
YFAR
Percentage of
2029
6
90
3
100
1
100
ABATED
Value Abated
2030
7
90
4
100
2
100
1
100
2031
8
90
5
100
3
100
2
100
2032
9
90
6
100
4
100
3
100
2033
10
90*
7
100*
5
]00*
4
100*
2034
_._. _.._ 8 100
9 100
10 ]00**
_ --
6
100
5
100
2035
7
100
6
100
2036
8
100**
7
]00**
2037
9
100
8
100
2038
10
100***
9
100***
2039
10
100
*LAST ABATEMENT YEAR FORUNIT 1
* LAST ABATEMENT YEAR FORUNfC2
***LAST ABATEMENT YEAR FORUNIT 3
EXHIBIT E "City of Beaumont Abatement Policy"
It is understood and agreed that all abatement agreements granted herein shall conform to
this abatement policy and to the Texas Tax Code
EXHIBIT F "Affiliates of Owner"
There are six Arbor -related entities, as follows:
1. Arbor Renewable Gas Holdings, LLC.
2. Arbor Renewable Gas LLC.
3. Arbor Renewable Gas Employer Co, LLC.
4. Arbor Renewable Gas Intermediate, LLC.
5. Arbor Renewable Gasoline - Phase 1 LLC (the Applicant).
6. Anejo Partners LLC(dormantlinactive).
Application for Tax Abatement
City of Beaumont
This applusal ion will become part oflh, T. Abstralml Agreemenu and am knowingly false rep enlalinns will to grounds for
he voiding fthe agreemenl. An original copy.1 On, re,esl should be submitted to the Community Developmem Deperbnent,City
of Beaumont, P- 0, Boa 3827, Beaumont, Tesas 77704.
Part I - Applicant Information Application Date 6/28/2021
Company Name: Arbor Renewable Gasoline —Phase 1 LLC
(See Attachment "A" for Arbor related entities)
Address: 1800 Bering Dr. Suite 510 Houston Texas 77057
Telephone: 346-388-1066 (Trey Fielder - EVP. Operations)
Current Number of Employees: 0
Annual Sales: 0
Employees in Taxing Jurisdiction: 0
Beaumont Address: Address pending —property located on Highway 347 Beaumont Texas
Years in Jefferson County: 0
Legal Counsel: King & Spalding,LLP
Address:._ 1100 Louisiana, Suite_4100 Houston, Texas 77002__
Telephone: 713-751-3200
Corporation Partnership Proprietorship (x) LLC
Has the Applicant Company recently been cited or currently under investigation for any
violations of Federal, State, and/or City Taws, codes, or ordinances? ( x ) No ( ) Yes
If yes, please provide detailed information on the nature and status of the violation(s) on aseparate
sheet of paper_
Is any interest in the project presently held by a member of the Beaumont City Council, Planningand
Zoning Commission, or any City employee?
(x)No ( )Yes
Attach a description of the Applicant Company, including a In history, corporate structure, and
business plan andannual statement, if available.
Arbor Renewable Gas LLC
Part II- Project Information
Location Address: Highwav347 Beaumont Texas
Legal Description: 53 41-acres Tract 21(H-2). P. Humphries Survey Abstract32 Jefferson County
Tax Accc Numbers: 300032-000-003900-00000
Attach statement fully explaining project, describe existing site and improvements, describe all
proposed improvements and provide list of improvements and equipment for which abatement is
requested_ If availableprovide a map shoving location of existing and proposed improvements. See
attachment "B; no existing improvements.
Section A- Economic Development
Type of Facility/abatement
Industrial X
Manufacturing
Brown fields site
Central Administrative office services
Other
Describe product or service to be provided: Renewable gasoline or renewable hvdroaeru sec
attachment "B" for company & project description details.
Part III- Economic Information
Construction Estimate:
Contractor: To be determined
Start Date: Unit 1 O1-2022
Completion Date: Unit 1 04-2023
If Modernization: N/A
Estimated current economic life of structure
Added economic life from modernization
Contract Amount: Unit I construction cost
estimated to be $325-million excluding the cost
Peak Construction Jobs: 300
See attachment `B" for each additional unit
years
'ears
Permanent Job Creation/Retention:
Current employment 0 Jobs to be Retained: Unit 1: 20: each
additional unit adds 12 FTE's. All 4 units is 56
Full-time jobs created at opening: Unit 120 each additional unit adds 12 FTE's for
a total of 56 FTE's.
at 3 years: Unit I' 20 each additional unit adds 12 FTE's for
a total of 56 FTE's.
(A full-time
Arbor Renewable Gas LLC
Provide information, if available.
(1) new employee needs; e. g. skilled vs. non -skilled, level of education, experience, etc.;
Unit I-
There will be 20 new permanent employees, including a Plant Manager, an Office
Manager, a Chemist/Lab Technician, two Mechanic/Electrician, and 15 Operators.
All will need to be skilled in their field and require any certifications needed for
such.
Each additional unit: Adds 12 new permanent employees (operators).
All 4 units: 56 new permanent employees.
(2) any training the company will provide to its new employees;
Company will provide any on -site training needed for this specific site, but all
employees will need to be skilled in their field.
(3) attach a list of new jobs to be created by job class with associated wage and salary ranges.
Also, provide an average wage for hourly jobs and an average salary for management jobs;
Hourly wages for non-professionals is $40+/hour and professionals $50+/hour.
Please refer to the below for the job classifications and salaries for the new
permanent employees.
UNIT 1 (20 PTP.'S):
Jobs
Headcount
Base Salary (without
benefits)
Plant Manager
1
150,000
Office Manager
1
65,000
Chemist/ Lab Technician
1
70,000
Mechanic/Electrician
2
65,000
Operators
15
85,000
UNIT 2, 3, & 4:
Each additional unit would add 12 new permanent employees, it is estimated that these
positions would be operators at a base salary without benefits of $85,000. All four units would
create 56 new permanent employees.
ANNUAL PAYROLL:
Average annual base salary without benefits is estimated to be $83,000 perjob.
Unit 1: Total annual payroll in the first year after operations begin is estimated to be
$2,576,750 with benefits and $1,985,250 without benefits.
Each additional unit Creates an additional annual payroll of $1,581,000 with benefits and
$1,224,000 without benefits.
All 4 units: $7,319,750 with benefits and $5,657,250 without benefits.
Arbor Renewable Gas LLC
(4) attach a list of benefits provided to employees. Indicate if employees' dependents
have access to the company's health plan;
Medical insurance and retirement plan. Employee's dependents have access to the
Company's health plan_
(5) attach a list describing the type of incentive and/or assistance you will be requesting from
other City departments and/or utility companies;
Tax abatement agreement to ensure the project is economically viable; expedited
permits on any city permits; potable water & sewer; consideration of water lax rate
savings.
(6) describe any goodwill benefits your company will provide to the community.
This project will create well-payingjobs and a payroll that will turn over in the community multiple
times. Company is committed to being a good corporate citizen and encourages participation and
volunteerism by its employees.
The project will produce very few emissions, as the majority of the COr produced will be captured
and sequestered in an approved storage facility. Because of this, the product manufactured at the
facility is considered to be carbon negative, meaning that it removes more carbon from the
atmosphere than it produces. Customers can then use this carbon negative attribute to offset the
environmental impacts of their own processes.
OTHER ECONOMIC INFORMATION— (PART III CONTINUED)
UNIT I
Estimated Appraised Value —Unit 1:
ESTIMATED APPRAISED VALUE
LAND'
IMPROVEMENTS'
PERSONAL PROPERTY
ON -SITE
(FURNITURE
ND IPMENTS
Value on January I proceeding
$4,280,000
$o
No estimate available at this
abatement
time.
Estimated value of new abatable
$o
$255,720,000
No estimate available at this
investment
time.
Estimated value of properties
$4,280,000
so
No estimate available at this
not subject to abatement (i.e.
time.
inventory, supplies)
Estimated value of property subject to
$4,290,000
$255,720,000
No estimate available at this
ad valorem ®cat end of abatement
time.
w Please state the method used to determine the estimated value of proposed improvements (i.e.
appraisal of plans and specs, etc.): -Method estimated spend multiplied by 80% of the industrial
valuation factor. Land spend of $5,350,000, multiplied by 80% valuation factor is $4,280,000. The
improvement spend is estimated at $319,650,000, multiplied by 80% valuation factor is $255,720,000.
There is no estimate available at this time for personal property. Please see the attached Economic Impact
Study at attachment 'C"_
Arbor Renewable Gas LLC
Estimated Spend —Unit 1
Total Capital Investment:
$325-million
Land:
55.35-million
Buildings:
$10-million
Pollution Control:
$16-million
Labor:
$95-million
Equipment:
$95-million
Materials:
$103.65-million
Type of construction: Industrial
(Tiltwall, Build -Out of Existing Facility, Etc.)
Value of Construction: $224.65-million
Value of Equipment_ $95-million
UNIT 2,3 & 4
Estimated appraised value of each additional unit
ESTIMATED APPRAISED VALUE
LAND
IMPROVEMENTS*
PERSONAL PROPERTY
ON -SITE.
FIXTURES
(FURNITUREANEQUIPMENT)
Value on January 1 proceeding
$0
$0
No estimate available at this
abatement
time.
Estimated value of new abatable
$0
$220,000,000
No estimate available at this
investment
time.
Estimated value of properties
$0
$0
No estimate available at this
not subject toabatement (i.e.
time.
inventory, supplies)_
Estimated value of property subject to
$o
$220,000,000
No estimate available at this
ad valorem mat end of abatement
time.
* Please state the method used to determine the estimated value of proposed improvements (i.e.
appraisal of plans and specs, etc.): *Method estimated spend multiplied by 80%of the industrial
valuation factor The improvement spend of each additional unit is estimated at $275,000,000, multiplied
by 80% valuation factor is $220,000,000. There is no estimate available at this time for personal property.
Please see the attached Economic Impact Study at attachment "C".
Each additional units estimated spend
Total Capital Investment:
$275-million each
Land:
n/a
Buildings:
$8.6-million each
Pollution Control:
$13.8-million each
Labor:
$81 7-million each
Equipment:
$81.7-million each
Materials:
$89.2-million each
Type of construction: Industrial
(Tiltwall, Build -Out of Existing Facility, Etc.)
Value of Construction: $1933-million each
Value of Equipment- $95-million each
Total estimated investment of all four units is SL1511.
Arbor Renewable Gas LLC
(1) Provide the Governmental Entity with (a) a statement agreeing to expend a designated amount
("Project Cost") for the Project and, if the abatement is based on Required Jobs, a separate
statement agreeing that the required minimum number of full-time jobs will be created
('Required Jobs") and maintained duringthe term of the Contract;
This first unit will involve an investment of $319.65-million and the creation of 20
permanent jobs. Those jobs will be maintained during the term of the contract. Each
additional unit has an estimated investment of S275-million and the creation of 12
additional permauentjobs. The total estimated investment of all four units is $1.15B
and 56 permanentjobs.
(b) an explanation as to how the Project will provide a long term significant positive
economic benefit to the community, the Governmental Entity and its taxpayers;
The project will provide a long-term significant positive economic benefit to the
community, the Government entity and its taxpayers by:
i. Making an investment that will add significant value and additional ad
valorem real property tax revenues;
ii. Making an investment that will add significant value and additional ad
valorem real property tax revenues;
ill. The facility will invite local vendors, suppliers, and sub -contractors to
participate in procurement opportunities;
(Reference economic impact study for other benefits.)
(c) information as to what attempt will be made to utilize Beaumont contractors and
workers;
The project will identify local Beaumont contractors and workers.
(d) information as to what attempt will be made to utilize Beaumont or Jefferson County
contractors and workers; and
The project will identify local Beaumont and Jefferson County contractors and
workers.
(e) information as to what attempt will be made to utilize Beaumontor Jefferson County
minority contractors and workers.
The project will identify local Beaumont and Jefferson County minority
contractors and workers.
(2) Furnish the Governmental Entity with a written statement that tax abatement will be a
significant factor in determining whether the Project for the development, redevelopment
or improvement of the Real Property will take place.
See attachment "D"
Arbor Renewable Gas LLC
(3) Agree to execute a Contract with the Government Entity containing the covenants and
conditions required by the Govern mental Entity.
Name: Megan Gallien
Title: Chief Financial Officer
Address- 2901 Turtle Creek Dr, Ste, 445,
Port Arthur TX 77642
Telephone: (409)722-5100
Trey Fielder
Authorized Signature
EVP, Operations
Name and Title
Telephone- (346)388-1066
Arbor Renewable Gas LLC
ATTACHMENT"A"
ARDOR RELATED ENTITIES
There are six Arbor -related entities, as follows:
I. Arbor Renewable Gas Holdings, LLC.
2. Arbor Renewable Gas LLC.
3. Arbor Renewable Gas Employer Co, LLC.
4. Arbor Renewable Gas Intermediate, LLC.
5. Arbor Renewable Gasoline - Phase I LLC (the Applicant).
6. Anejo Partners LLC (dormant, inactive)
ATTACHMENT "B"
PROPOSED PROJECT
Description of Project
Applicant plans to design and construct a manufacturing facility that will utilize woody biomass as a
feedstock. The process will produce syngas, which can be further processed into either renewable
gasoline or renewable hydrogen. The project will include up to four units, with a total investment of
up to S 1.15 billion.
'I he projected investment for the first unit is approximately $3 19,65 0,000, not including $5,350,000
for the purchase of the project site, which will accommodate all four units. The total estimated
investment for unit 1, including the land, is $325,000,000.
Unit 1 will employ 20 new permanent employees, averaging an annual base salary of $83,000, and
consisting of a facility manager, office manager, operators, mechanic and an electrician. The
construction phase of the project could create up to 300 peak eonstruetionjobs with opportunities to
be built by local contractors, laborers, vendors and suppliers.
The Company plans to build an additional three units at the same site over a six year period, with an
investment of approximately $275 million for each unit, creating an additional 12 permanent
employees at each unit, with salaries averaging $83,000,
The four units would employee a total of 56 new permanent employees and the total estimated
investment for the units is an estimated $1.15 billion.
Construction start for unit I is estimated to be Ql 2022
Construction start for unit 2 is estimated to be Q12024.
Construction start for unit 3 is estimated to be Q12026.
Construction start for unit 4 is estimated to be Q 12027.
The project will process woody biomass into syngas, which will be converted into crude methanol and
finally into gasoline, LPG and CO2. Alternatively, the syngas can be used to create hydrogen and CO2.
The primary product will be renewable gasoline. If the facility manufactures renewable industrial
hydrogen, that product is at pipeline specification purity and pressure, molecularly identical to natural
gas -produced hydrogen, and becomes a fungible product once in the pipeline. The facility will also
produce CO2 at industrial scale.
The unit will produce very few emissions, as the majority of the CO, produced will be captured and
sequestered in an approved storage facility. Because of this, the product manufactured at the facility is
considered to be carbon negative, meaning that it removes more carbon from the atmosphere than it
produces.
Customers can then use this carbon negative attribute to offset the environmental impacts of their own
processes.
During normal operations, the facility will produce three waste gas streams and LPG. Applicant will
burn these in a gas turbine to generate renewable electricity for use by the facility. Though Applicant
is not primarily engaged in activities related to renewable energy electric generation, Applicant will be
producing a continuous 11.5 megawatts of renewable electricity, which the facility will utilize to meet
over 75 percent of the facility's power needs, and will purchase less than 25 percent of the facility's
power needs from the grid.
Significant components of the facility would include
• site development
• process and final product storage tanks
• wood grinding and processing
• biomas gasification island
• methanol synthesis plant
• gasoline production
• acid gas removal system
• steam turbine power generation
• other chemical processing equipment
The proposed improvements will include all process facilities, infrastructure and auxillary
equipment and any other infrastructure additions related to the Project facilities, including, but not
limited to, the following significant components:
• Methanol reactors
• Gasoline reactors
• Cooling fans
• Final product storage tanks
• Heat exchangers
• Heaters
• Pumps
• Valves
• Compressors
• Motors and motor control centers
• Process control systems
• Waste heat recovery boiler
• Flare stack
• Refining columns
• Pollution control equipment
• CO2 capture equipment
• Process control buildings
• Warehouse, maintenance and other buildings
• Electric wood grinders
• Wood dryers
Coe
Pipeline
0 is
Conveyor �� Pro(
Dryer Storage � Methanol
Gasification
Tank
Farm
Truck
Loading
02
Pipeline
PROPOSED LAYOUT OF IMPROVEMENTS
P
N2
LR
N2
CO2
Gasification Island
180' x 100'
Methanol Synthesis
ASH ASH
STORAGE STORAGE
9L0 SILO
Unit I
Q
v
1,,,, O
Gasoline Production
120' x 140'
In
1 � �
t'
i S s � �I�..° ✓
� • `� _ Fit _. ° ,-.. �
LEGAL DESCRIPTION OF PROPOSED SITE
Being 53.54 acres of land, part of Tract 11-2 of Partition Map No. 2 of the McFaddin'Trust in the
Pelham Umphries Survey, Abstract No. 32, recorded in Volume 7, page 133 of the Map Records
of Jefferson County, Texas; being part of Tract No. H-2 of multiple tracts of land recorded in
Volume 692, page 22, of the Deed Records of Jefferson County, 'texas; said 53.54 acre tract being
more fully described by metes and bounds as follows, to wit:
BEGINNING at a brass disc found in concrete for the Northeasterly comer of a (called 7.595) acre
tract of land conveyed to E. I. Du Pont De Nemours & Company, recorded in Volume 845, page
48 of [he Deed Records of Jefferson County, Texas; said brass disc being on the Westerly right-
of-way line of a dedicated road named State Highway 347 (a.k.a. Twin City Highway); also being
the Southeasterly corner of the herein described tract; having a State Plane Coordinate of N:
13948984.10, E: 3538676,65;
THENCE, South 39 deg., 09 min., 57 sec., West, on the Northerly line of the (called 7.595) acre
tract, a distance of 2171.12' to a /2' steel rod, capped and marked "S&P", found for the
Northwesterly comer of the (called 7.595) acre tract on the Easterly line of a (called 50.84) acre
tract of land conveyed to Gulf States Utilities Company, recorded as Tract 3 in Volume 370, page
38, Deed Records of Jefferson County, Texas; said ''/i" steel rod being the Southwesterly comer of
the herein described tract having a State Plane Coordinate of N: 13947300,78, E: 3537305.44;
'THENCE, North 52 deg., 25 min., 13 sec., West, on the Easterly line of the (called 50.84) acre
tract, a distance of 937,65' to a ''/z' steel rod, capped and marked "SOUTHEX", set on the
intersection of the Easterly line of the (called 50.84) acre tract and the Easterly right-of-way line
of a dedicated road named US Highway 69, 96, 287;
THENCE, North 27 deg., 32 min., 46 sec., West, on the Easterly right-of-way line of said US
Highway 69, 96, 287, a distance of 134.93' to a %" steel rod found for the Northwesterly corner
of the herein described tract;
THENCE, North 38 deg., 32 min., 42 sec., East, a distance of 2128.07' to a 5/8" steel rod found
for the Northeast comer of the herein described tract on the Westerly right-of-way line of said
State Highway 347; from which a TxDOT concrete monument found bears North 51 deg., 23 min.,
57 sec., West, a distance of 4.29%
THENCE, South 51 deg., 40 min., 07 sec., East on the Westerly right-of-way line of said State
Highway 347, a distance of 1084.41' to the POINT OF BEGINNING and containing 53.54 acres
of land, more or less.
Jf:Tfe_isirn CAD
[It cilaerty So 1r elIri4062i7 PR0.1CfF: I" F 1 1 r I AM tIH r;/15 Li! 1.2021
`ieal M7'
I`raperty
Account
Property ID:
130642
Legal Descriptlon:
PHUMPHREYS-ABS32TR21(H-2)53.41AC
Geographic ID:
300032-000-003900-00000
Zoning:
CM
Type:
Real
Agent Code:
Property Use Code:
DI
Property Use Descriptlon:
S+ACRES PASTURE/RANCH
Location
Address:
HIGHWAY347
Mapsco:
101-97
BEAUMONT, Tx
Neighborhood:
Map ID:
0
Neighborhood CD:
Owner
Name:
ARBOR RENEWABLE GAS LLC
Owner ID:
708220
Mailing Address:
1800 BERING DR STE 510
%Ownership:
100,0000000000%
HOUSTON, TX 77057
Exemptons:
Values
(+) Improvement Homesite Value: + $0
(+) Improvement Non-Homesite Value: + $0
(+) Land Homesite Value: + $0
(+) Land Non-Homesite Value: + $0 Ag / Timber Use Value
(+) Agricultural Market Valuation: + $685,710 $8,545
(+) Timber Market Valuation: + $0 $0
(=)Market Value: _ $685,710
(—) Ag or Timber Use Value Reduction: — $677,165
(=) Appraised Value: _ $8,545
(—) HS Cap: — $0
(_) Assessed Value: _ $8,545
Taxing Jurisdiction
Owner: ARBOR RENEWABLE GAS LLC
% Ownership: 100.0000000000%
Total Value: $685,710
Entity Description Tax Rate Appralsed Value Taxable Value Estimated Tax
101 BEAUMONT ISO 1.220450 $8,545 $8,545 $104-29
221
CITY OF BEAUMONT
0710000
$8,545
$8,545
$60-67
341
PORT OF BEAUMONT
0109105
$8,545
$8,545
$9.32
755
SABINE NECHES NAV DIST
0.090426
$8,545
$8,545
$7.73
851
DRAINAGE DISTRICT47
0,294990
$8,545
$8,545
$25.21
901
JEFFERSON COUNTY
0,364977
$8,545
$8,545
$31.18
A59
FARM AND LATERAL ROAD
0.0G0000
$8,545
$8,545
$0.00
CAD
JEFFERSON CO APPRAISAL DISTRICT
0.000000
$8,545
$8,545
$0-00
T341
TIF PORT OF BMT
0.000000
$8,545
$8,545
$0-00
Total Tax Rate:
2.789948
Taxes w/Current Exemptions:
$238.40
Taxes w/o Exemptions:
$238-40
10113 OVel)OM / Building
No improvements exist for this property.
I.anc
g
Type
Description
Acres
SqR
EH Front
Elf Depth
Market Value
Prod. Value
1
CPAI
IMPV PASTCITY7.2314
315000.00
1050,00
300.00
$157,500
$1,157
2
CPAI
IMPV PAST -CITY
0,8264
36000.00
0.00
0.00
$18,000
$132
3
CPAI
IMPV PAST -CITY
22-6760
987940-80
0.00
0.00
$340,140
$3,628
4
CPAI
IMPV PAST -CITY
216760
987940.80
0.00
0.00
$170,070
$3,628
Roll Value Wstoly
Year Improvements Land Market Ag Valuation Appraised HSCap Assessed
2021
$0
$685,710
8,545
8,545
50
$8,545
2020
SO
$685,710
8,279
8,279
50
$8,279
2019
$0
$685,710
7,370
7,370
$0
$7,370
2018
$0
$685,710
6,460
6,460
$0
$6,460
2017
$0
$685,710
5,390
5,390
$0
$5,390
2016
$0
$685,710
5,390
5,390
$0
$5,390
2015
$0
$685,710
4,590
4,590
$0
$4,590
2014
$0
$685,710
3,840
3,840
$0
$3,840
2013
$0
$685,710
3,200
3,200
$0
$3,200
2012
$0
$685,710
3,200
3,200
$0
$3,200
2011
$0
$685,710
3,100
3,100
$0
$3,100
2010
$0
$293,170
3,200
3,200
$0
$3,200
2009
$0
$293,170
3,310
3,310
$0
$3,310
2008
$0
$164,660
3,420
3,420
$0
$3,420
2007
$0
$164,660
3,260
3,260
$0
$3,260
Deed History- (Last 3 Deed Transactions)
N Deed Date Type Description Grantor Grantee Volume Page Deed Number
1 5/6/2021 WD WARRANTY DEED CORDTS EG JR ARBOR 2021015512
&GRACE N& RENEWABLE
MASHED O GAS LLC
MINERALS LP
2 1/20/2015 WD WARRANTY DEED MASHED O 2015037904
MINERALSLP
3 1/20/2015 WD WARRANTYDEED CORDTSEGJR CORDTS EG JR 2015002094
& GRACE N &
MASHED O
MINERALS LP
lax Due
Property Tax Info mr on as of 05/35/2011
Amoun[Duef Paltlon: M
Year Taxing Taxable Base Base Taxes Base Tax Discount/Penalty& Attorney Amount I
Jurisdiction Value Tax Paid Due Interest Fees Due
NOTEPenalty & Interest accrues every month on the unpaid tax and Is added to the balance, Attorney fees may also Increase your tax liability If not paid by July 1.If
you plan to submly payment on a future date, make sure you enter the date and RECALCUTATE to obtain the correct total amount due,
1lU9ihoDE 1118a5C' eau (404) 840 131W,
ATTACHMENT "D"
DETERMINING FACTOR OF PROJECT SITE LOCATION
One of the determining factors that renewable energy developers face when selecting an area for
development is where they can achieve the greatest return on the Applicant's investment. An
appraised value limitation on qualified property will allow these developers to significantly
diminish the property tax liability that comprises a substantial ongoing cost of operation that
directly impacts the economic rate of return for the project. As such, securing tax abatements is
critical to establish a rate of return competitive with other investment opportunities, and is a
determining factor affecting Applicant's final investment decision to construct and operate the
proposed project in Beaumont, Texas.
Applicant has received a preliminary offer from the State of Louisiana for the first unit for a 10-
year tax abatement offer at 80 percent per year, and a proposed $35,600,000 projected tax savings.
LED is also offering an up to 6 percent payroll rebate on gross annual payroll for qualifying new
jobs for up to 10 years, or a 1.5 percent project facility expense rebate on capital expenditures.
LED estimates the value of this performance -based program to be up to $3,400,000 for Applicant.
The total estimated incentive value from LED is $39,000,000 on the first unit. Applicant
anticipates an updated letter offer from the State to include the additional three units.
The 2020 ad valorem tax rates for the Jefferson County site total 2.789948, the City of Beaumont
being 0.71 of this. The estimated spend for the first unit is $319,650,000, multiplied by an 80
percent industrial valuation factor is an estimated value of $255,720,000. The City of Beaumont's
tax rate of 0.71 times the industrial valuation of $255,720,000 is an $1,815,6t2 annual property
tax burden for the first unit. Applying the same formula to each additional unit's value creates an
additional annual property tax burden per unit of $1,562,000.
These tax savings have a material impact on the rate of return and discounted cash Plow projections
for the proposed project, and consequently are a significant and determining factor in Applicant's
decision to construct the proposed project in Beaumont, Texas.
4
i • r S
.
0
f Via' •�-,� , t � � �' ' �+