CORPUS CHRISTI, Texas — City leaders voted Tuesday on new terms for renegotiated industrial district agreements (IDA), something that hasn't happened in a decade.
The new IDA provides the City annual payments in place of property taxes. In exchange, the city won't annex that land.
The City's industrial districts are something that go back at least four decades. They were set up so that companies can remain outside the city limits, but still pay a portion of what they would pay in taxes.
Those districts include about 80 companies.
"By not being in the city limits the City doesn't have to provide services to them, most notably fire services, police, road services," City Manager Peter Zanoni said.
He said for the past eight months the City's economic development team has been negotiating with some of the bigger players in the industrial districts.
Assistant City Manager Heather Hurlbert listed a few of them as she gave the presentation during Tuesday's City Council meeting.
"We did have representatives from Valero, Citgo, Oxy, Gulf Coast Growth Ventures," Hurlbert said.
What they came up was a 15-year agreement that Mayor Paulette Guajardo called 'historic' as the companies are set to pay a 19-percent increase in those PILOT (Payment in Lieu of Taxes) payments.
"The great news about this agreement, it will provide $120 million more to the City over the term over the new agreement which is substantial," Zanoni said. "The payment they pay today, is 62.5 percent that will go to 74.5 percent."
Also included in the agreement, all 80 entities will need to have appropriate backflow preventers to keep the City's water system safe.
Following public comment Sylvia Campos and Jim Klein voted against the agreement, saying 15 years is too long. Others think the city is actually losing out on tax money by not annexing the property.
"I've asked before what would be the fiscal impact if we were not to proceed with this agreement," Campos asked during Hurlbert's presentation.
Michael Hunter was among the council members who voted to move forward with the agreement.
"Although it is rare for me to vote for tax increases, if they want to unanimously, or as a super majority come and pay significantly more in taxes, it's hard to turn them down," he said.
Zanoni called the agreement an economic development tool.
"That incentivizes big employers that provide a lot to this economy to stay right here in Corpus Christi," he said.
This was the first vote on the agreement.
Council will need to vote a second time in order for it to pass which will happen at the next city council meeting on Sept. 3.
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