PORTLAND, Tx — The San Patricio County Commissioners voted unanimously to terminate a financial incentive agreement with voestalpine Texas/ArcelorMittal.
The incentive in question was a Chapter 381 Economic Development Incentive Agreement. These types of agreements allow counties to offer incentives for companies to develop and do business in their area.
The agreement between San Patricio County and voestalpine Texas/ArcelorMittal, which began in April 2013, was terminated due to the company's "failure" to meet the agreed-upon requirements for Phase II.
Phase II, according to that initial agreement, required that "the company has provided evidence of the fulfillment of at least 85% of the investment requirement for potential future phases and at least 85% of the job requirement."
In a letter from County Judge David Krebs, he stated, "The company has not provided reasonable evidence that they have commenced Phase II."
Following Monday's meeting, Krebs expressed, "It was not a very good abatement schedule for the county."
“The first clause stated they had to start Phase II within a 10-year period. Phase II was not started within that 10 years, so that made the debate null and void," Krebs said.
When asked how the county will handle future 381 agreements, Krebs said that as long as he and his fellow commissioners are in office, "We will never offer another 381 agreement."
Uwe Leopold, CEO of voestalpine Texas, was present for Monday's decision. When speaking before the board, he explained that the company had actually exceeded the expectations set by the Chapter 381 agreement. “We overfulfilled the commitment, which again underscores the strength of the company and the value we bring to San Patricio County.”
David Krebs said that while 381 agreements are off the table, voestalpine Texas and other companies are eligible to apply for a Chapter 312 agreement. That agreement "allows the governing bodies of cities, counties, and special districts to exempt all or part of the taxable value," according to the Texas Taxpayers and Research Association.
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