Department: Economic Equity and Opportunity
Department Head/Elected Official: Estella Gonzalez, Executive Director
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
MWDBE Contracted Goal (if applicable): N/A
MWDBE Current Participation (if applicable): N/A
Justification for 0% MWDBE Participation Goal: N/A - Goal not applicable to request
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 Sooner 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 1919 Crosby-Dayton Rd, Crosby, Texas in Harris County Precinct 3 and within the Foreign-Trade Zone #84.
end
Background and Discussion:
SOONER INC. (the “Company”), a Delaware company, has applied for designation and/or activation of a 108.943-acre FTZ site within FTZ #84 and located at 1919 Crosby-Dayton Rd, Crosby, TX 77532, in Harris County Precinct 3. The site is owned by A-Z Terminal Corporation and will be operated by the Company.
SOONER INC. leads the oil country tubular goods (OCTG) distribution industry in North America with over 80 years of experience. Renowned for their customer-focused reliability, project customization, and cost-saving measures, they offer end-to-end tubular supply chain solutions. With three distinct teams - Sooner Pipe, CTAP, and TerraTech - operating as a unified company, they strategically cover all major US basins, enhancing their ability to serve clients accurately. Sooner Pipe leads as a full-service OCTG provider, integrating supply chain expertise and project management. CTAP specializes in offering a wide array of Midstream and OCTG options emphasizing safety and efficiency. Together, fueled by TerraTech, they offer a suite of oilfield services, including material handling, storage, maintenance, and inspections, in 17 strategically positioned service centers. As a Marubeni-Itochu Steel Inc. company, SOONER benefits from substantial capital resources and global reach, ensuring rapid response to customer demands while delivering transparency, visibility, and certainty throughout the purchasing and delivery process.
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
Prior Court Action (if any):
|
Date |
Agenda Item # |
Action Taken |
|
|
|
|
Location:
Address (if applicable):
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 Current Budget |
$ |
$ |
$ |
$ |
|
Additional Budget Request (Requires Fiscal Review Request Form) |
|
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Choose an item. |
$ |
$ |
$ |
$ |
|
Total Additional Budget Request |
$ |
$ |
$ |
$ |
|
Total Funding Request |
$ |
$ |
$ |
$ |
|
Personnel (Fill out section only if requesting new PCNs) |
|
|
Current Position Count for Service |
- |
- |
- |
- |
|
Additional Positions Request |
- |
- |
- |
- |
|
Total Personnel |
- |
- |
- |
- |
Anticipated Court Date: July 15, 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 Sooner Inc. and corresponding Exhibits (FTZ site located at 1919 Crosby-Dayton Rd, Crosby, Texas, Harris County Precinct 3)
2. Non-Objection Letter for SOONER INC.