Parish Council approves tax exemptions that could bring new plant to AP
The Ascension Parish Council approved tax credits for a chemical plant looking to expand its facilities in the parish. The tax incentives could be instrumental in winning the project, as the company is also considering a location in Canada.
Methanex is considering a massive capital investment in Geismar, where one of its plants is located. Ascension Parish is competing against a site in Alberta, Canada, for the project. North American Vice President for Methanex, Paul Daoust, told the council that the ITEP is a huge incentive as company officials work to make their final decision for the new plant's location.
The exemptions granted to Methanex incentivize higher investment by offering staggered credits depending on the company's capital investment in the parish. The corporation is looking at a site in Geismar for a potential $1 billion to $1.6 billion methanol plant near the river. The incentives would be offered for eight years total, with the amount decreasing after five years.
If Methanex invests at least $1.3 billion, they company would receive a 100 percent exemption for five years. The company would earn a 95 percent credit for five years with an investment of $1 billion to $1.3 billion. An investment totaling less than $1 billion would earn a 90 percent credit over the first five years. Methanex would receive an 80 percent credit for the final three years no matter the investment amount.
Several people spoke in favor of the tax credit, including local economic development officials and business executives. Barker Dirmann, president of the Ascension Chamber of Commerce, said this mega-project would mean great things for the parish. He touted business partnerships, saying Methanex is an outstanding corporate citizen.
"They get involved in many different activities in the parish, and their employees volunteer quite often in the community," said Dirmann. "Obviously, this is a huge project. It's going to have massive ripple effects throughout our economy."
Those effects include creating 1,000 construction jobs as the plant is built, as well as 25 new permanent jobs with an annual payroll totaling $2 million. Robert Schromm with the Louisiana Chemical Association added that when projects like this come to a parish, it drives the economy in more ways than one.
"I think this project is a big economic win for Ascension Parish. It's an economic win for the State of Louisiana, and it's an economic win for workers in this parish and in this state," said Schromm.
Schromm went on to say that other states are getting more competitive and trying to win these projects away from Louisiana. He said that's why it is imperative that the parish remains committed to keeping these major investments here.
Director of business development with Louisiana Economic Development, Rick Ward, said since announcing the first of its Geismar projects in 2012, Methanex has become a major economic driver, making more than $1.4 billion in capital investment in the parish. He said ITEP is key to Louisiana's ability to win these jobs and capital investments.
"ITEP permits local governments to forego some property taxes on new investments for a period of five to eight years. In return, manufacturers commit to expansion projects that provide new jobs, in some cases retaining jobs that might otherwise be eliminated," said Ward.
Ward went on to say that local governments now have a voice in what exemption levels are provided to manufacturers, as well as a role in requiring job creation and retention. The parish involvement in these decisions comes after Governor John Bel Edwards signed an executive order in 2016 giving that authority to local representatives, including parish officials, the school board, and the sheriff. For decades the power to hand out property tax exemptions was held exclusively by the state.
According to Kate MacArthur, CEO for the Ascension Economic Development Corporation, even with the tax exemptions, the new methane plant would generate between $41 million and $66 million in property tax revenue over the 30-year life of the plant.
After the tax exemption was unanimously approved by the council, Daoust said they are grateful for the council's vote of confidence in Methanex and commitment to working with the company. He said the approval will help company officials evaluate the potential locations for the future investment.
"It certainly makes [Ascension Parish] more attractive in terms of the potential of the projects and also the potential when you look at different locations," said Daoust.
Council Chairman Bill Dawson said this could be a huge win for the parish with the new jobs created, as well as the economic impact of a project this size. He said it's more important than ever for Ascension to remain competitive in drawing more projects like this to the parish. That's becoming more of a challenge, he said, as other municipalities up the ante to compete for mega-projects.
"All of our competitors over the last few years, because we've been so successful, have made their incentives more attractive in order to compete with us," said Dawson. "So now we have to make sure we don't lose our competitiveness."
Additionally, the council acknowledged the East Ascension High School Lady Spartans basketball team for winning their first ever state championship.
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