Department: Economic Equity and Opportunity
Department Head/Elected Official: Estella Gonzalez, Executive Director
Regular or Supplemental RCA: Regular RCA
Type of Request: Financial Authorization
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Justification for 0% MWDBE Participation Goal: N/A - Goal not applicable to request
Request Summary (Agenda Caption):
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Request for approval of a Payment in Lieu of Taxes Agreement (“PILOT Agreement”) between Harris County (on behalf of itself, Flood Control District and Hospital District) and Gulf Stream Marine, Inc. with respect to its application for a Foreign-Trade Zone (FTZ) site and issuance of a Letter of Non-Objection to the designation and/or activation of the proposed FTZ site located at 15627 Jacintoport Blvd., Houston, Texas in Harris County Precinct 2 and within the Foreign-Trade Zone #84.
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Background and Discussion:
Gulf Stream Marine, Inc. (the “Company”), a Houston company, has applied for designation and/or activation of a 20-9880-acre FTZ site within FTZ #84 and located at 15627 Jacintoport Blvd., Houston, TX 77015, in Harris County Precinct 2. The site is owned by BWC 15627 Jacintoport LLC (DBA BWC Terminals) (formerly Contanda Jacintoport Steel 2 LLC) and will be operated by the Company.
Gulf Stream Marine, Inc. was established in 1990 in Houston. The Company was incorporated in Texas in 1990 and currently operates in the Gulf of Mexico with 750 employees. The Company is in the maritime terminal operating industry with seven locations, including Cedar Port, Corpus Christi, and Houston. The Company provides all-inclusive services with operational expertise in logistics planning, cargo handling, stevedoring, warehousing transportation, and terminal operations.
For any FTZ application, Harris County requires an applicant to execute a Payment in Lieu of Taxes (“PILOT”) Agreement, wherein the applicant commits each year to pay the County and certain of its taxing entities an amount equivalent to 100% of the taxes that would be owed for all FTZ inventory stored at the FTZ site. When the applicant executes the PILOT Agreement, the proposed FTZ site is then deemed to be in the public interest because the County would not lose revenue. The County may then provide a Letter of Non-Objection to facilitate designation of the site by the FTZ Board of the U.S. Department of Commerce and activation by the Bureau of Customs and Border Protection of the U.S. Department of Homeland Security.
Presently, it is requested and recommended that the Commissioners Court take two actions with respect to the Company’s application for the Foreign-Trade Zone site within FTZ #84:
• Approval for the County Judge to execute the attached PILOT Agreement between the Company and the County, with the County acting on behalf of itself, Harris County Flood Control District, and Harris County Hospital District; and
• Authorization for the County Judge to issue a Letter of Non-Objection to the foreign trade zone site to the Port of Houston Authority as consideration for the Company’s execution of the PILOT Agreement benefiting the County taxing entities.
Expected Impact:
An approved PILOT Agreement with the Company safeguards revenue for County taxing entities.
Alternative Options:
Non-approval of the PILOT Agreement may result in lost revenue for County taxing entities.
Alignment with Goal(s):
_ Justice and Safety
X Economic Opportunity
_ Housing
_ Public Health
_ Transportation
_ Flooding
_ Environment
_ Governance and Customer Service
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Anticipated Court Date: February 27, 2024
Anticipated Implementation Date (if different from Court date):
Emergency/Disaster Recovery Note: Not an emergency, disaster, or COVID-19 related item
Contact(s) name, title, department: Estella Gonzalez, Executive Director, and Judit Haracsek, Director, Economic Development Division
Attachments (if applicable):
1. PILOT Order and Agreement with Gulf Stream Marine, Inc. and corresponding Exhibits (FTZ site located at 15627 Jacintoport Blvd., Houston, Texas, Harris County Precinct 2)
2. Non-Objection Letter for Gulf Stream Marine, Inc.