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):
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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 Edgen Murray Corporation 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 8445 Miller Rd 2, Houston, Texas in Harris County Precinct 1 and within the Foreign-Trade Zone #84.
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Background and Discussion:
Edgen Murray Corporation (the “Company”), a Nevada company, has applied for designation and/or activation of a 4.2439-acre FTZ site within FTZ #84 and located at 8445 Miller Rd 2, Houston, TX 77049, in Harris County Precinct 1. The site is owned by Pescador Partners, Ltd. and will be operated by the Company.
Edgen Murray Corporation is a leading supplier of quality PVF products for the energy and infrastructure market. They manage procurement, provide value-added services, and deliver high-performance pipes, valves, fittings, and related components through their distribution network. The Company carries a full range of commodity-grade to highly specialized carbon pipe and fittings produced by top mills and manufacturers for both process and structural applications. They offer a wide selection of coated materials and piling solutions to meet customer-specific requirements and leverage their relationships with vendors across the globe to create value for their customers to provide best-in-class expertise and scale to meet the most complex and demanding procurement challenges.
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 and facilitates international commerce.
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: October 8, 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 Edgen Murray Corporation and corresponding Exhibits (FTZ site located at 8445 Miller Rd 2, Houston, Texas, Harris County Precinct 1)
2. Non-Objection Letter for Edgen Murray Corporation