Primary Department: Economic Equity and Opportunity
Primary Department Head/Elected Official: Estella Gonzalez, Executive Director
Secondary Department: N/A
Secondary Department Head/Elected Official: N/A
Regular or Supplemental RCA: Regular RCA
Type of Request: Financial Authorization
Project ID (if applicable): N/A
Vendor/Entity Legal Name (if applicable): N/A
MWBE Contracted Goal (if applicable): N/A
MWBE Current Participation (if applicable): N/A
Justification for 0% MWBE Participation Goal: N/A - Goal not applicable to request
Grant Indirect Costs Rate (if applicable): N/A
Justification for 0% Grant Indirect Costs Rate (if applicable): N/A - Not a grant item
Request Summary (Agenda Caption):
title
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 voestalpine High Performance Metals LLC with respect to its application for Foreign-Trade Zone (FTZ) sites and issuance of a Letter of Non-Objection to the designation and/or activation of the proposed FTZ sites located at 11929 & 11869 Cutten Road, Houston, Texas 77066 in Harris County Precinct 1 and within the Foreign-Trade Zone #84.
end
Background and Discussion:
voestalpine High Performance Metals LLC (the “Company”), a Delaware company, has applied for designation and/or activation of two parcels of land totaling 5.0005 acres FTZ sites within FTZ #84 and located at 11929 & 11869 Cutten Road, Houston, Texas 77066, in Harris County Precinct 1. The sites are owned by Clay Partners-11929 Cutten, L.P. and Clay Partners-11869 Cutten, L.P., respectively, and will be operated by the Company.
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.
voestalpine High Performance Metals LLC is a U.S. operation of voestalpine AG, a leading steel and technology group based in Linz, Austria. The High Performance Metals U.S. division, headquartered in Elgin, Illinois, focuses on technologically demanding product segments and is a U.S. market leader for specialty steels and tool steel, plus other value-added services such as machining, heat treatment, and PVD Coatings.
The Company is known as a steel-backed technology company and the leading company in the U.S. for Specialty Steel, Coatings, Machining Services and Technical Support. voestalpine is one of the World’s leading manufacturers of high-quality tool steel, high-speed steel, powder metallurgical steels, stainless steels, and specialty alloys.
Expected Impact:
An approved FTZ PILOT Agreement with the Company safeguards revenue for County taxing entities and supports international commerce.
Alternative Options:
Non-approval of the PILOT Agreement may result in lost revenue for County taxing entities.
County Strategic Plan Goal: 3. Make our economy more inclusive.
County Strategic Plan Objective: M: Ensure that Harris County remains the best place in the region to start and grow a business, with a focus on equitable economic growth.
Justice/Safety Initiative (Goal 1): Choose an item.
Infrastructure Initiative (Goal 2): Choose an item.
Economy Initiative (Goal 3): N/A
Health Initiative (Goal 4): Choose an item.
Climate/Resilience Initiative (Goal 5): Choose an item.
Housing Initiative (Goal 6): Choose an item.
Additional notes related to the Strategic Plan:
While the revenue source related to annual FTZ PILOT payments is not tied to a specific goal(s) enumerated in the County’s strategic plan, safeguarding such revenue sources enhances the County’s ability to effectuate its stated initiatives and goals.
Prior Court Action (if any):
|
Date |
Agenda Item # |
Action Taken |
|
|
|
|
Location:
Address (if applicable): 11929 & 11869 Cutten Road, Houston, Texas 77066
Precinct(s): Countywide
|
Fiscal and Personnel Summary |
|
Service Name |
|
|
|
|
Current Fiscal Year Cost |
Annual Fiscal Cost |
|
|
Labor |
Non-Labor |
Total |
Recurring Expenses |
|
Funding Sources |
|
|
Existing Budget |
|
|
|
|
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Total Existing Budget |
$ |
$ |
$ |
$ |
|
Additional Budget Request (Requires Fiscal Review Request Form) |
|
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Total Additional Budget Request |
$ |
$ |
$ |
$ |
|
Total Funding Sources |
$ |
$ |
$ |
$ |
|
Grants - Proposed Budget (To be filled out by Grants staff only) |
|
|
Labor |
Non-Labor |
Total |
No. of Grant Years |
|
Local Match Source - Existing Budget: Choose an item. |
$ |
$ |
$ |
|
|
Local Match Source - Additional Budget Request: Choose an item. |
$ |
$ |
$ |
|
|
Grant Funds Applied for/Awarded (Total) |
$ |
$ |
$ |
|
|
Personnel (Fill out section only if requesting new PCNs) |
|
|
Current Position Count for Service |
- |
- |
- |
- |
|
Additional Positions Request |
- |
- |
- |
- |
|
Total Personnel |
- |
- |
- |
- |
Anticipated Court Date: 2/6/2025
Anticipated Implementation Date (if different from Court date): Click or tap to enter a 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 voestalpine High Performance Metals LLC and corresponding Exhibits (FTZ site located at 11929 & 11869 Cutten Road, Houston, Texas, Harris County Precinct 1)
2. Non-Objection Letter for voestalpine High Performance Metals LLC