By Karen Gleason
The 830 Times
Val Verde County Commissioners Court has authorized the county judge to engage a consultant to move forward with a possible tax abatement proposal for a planned battery storage project and other related facilities eyeing moves into the county.
During its May 23 meeting, members of Val Verde County Commissioners Court addressed two agenda items related to a proposed battery storage project in the county.
The first was a presentation by Jeff Snowden on the Texas Tax Code Chapter 312 Property Redevelopment and Tax Abatement Act regarding the Val Verde County Battery Storage Project and a related engagement letter.
The second was discussion of and possible action on a presentation by Evan Horn on the Tierra Seca Battery Storage Development Project in Val Verde County.
Snowden joined the meeting via Zoom.
Snowden said he is a consultant and helps several counties around the state negotiate Chapter 312 agreements “for various capital projects, including battery storage.”
“I provided to the court a sample project that I negotiated last year for Webb County down in Laredo, and I have submitted a proposal to help conduct these same negotiations for Val Verde County.
“Typically, the fee that I charge, I structure the agreement where that fee is payable by the developer upon execution of the agreement, so I typically do not cost the county any out-of-pocket money. There are a lot of elements that go into a good 312 agreement. I like to structure a payment in lieu of taxes, which brings that revenue in not subject to your (tax rate) cap. It’s not classified as non-ad valorem revenue, so you have more flexibility.
“I structure that based on a targeted percentage of what you want to abate, so the first thing I do is calculate how much is this project worth to the county over 10 years with zero abatement. I’ll give you that number, and then you’ll instruct me what your target is or what percentage of those dollars you want to capture and what percentage you want to give the developer,” Snowden said.
“If we don’t do a 312 tax abatement, then they would pay the full property tax on whatever the valuation is?” County Commissioner Pct. 3 Beau Nettleton asked.
“That is correct; yes, sir,” Snowden replied.
“And do we have any idea what that amount is?” Nettleton asked.
County Judge Lewis G. Owens Jr. said, “Based on $89,500,000 (project valuation), at our tax rate of .4977 (per $100 of assessed value), it would be $445,442.”
Nettleton asked what benefit county taxpayers would see from the project if its developers were allowed a payment in lieu of taxes rather than having to pay taxes on the values assigned by the appraisal district.
“I’d like to look at it before we made a decision, as far as the pros and cons, I’m just trying to figure out why we would give up $400,000 and what the advantage to giving up $400,000 is if it gives us the ability to give the rest of the taxpayers a break, but it may be to our advantage to do that, I don’t know,” Nettleton said.
Snowden asked to reply to Nettleton’s comment.
“One reason why counties choose to abate these deals and (set up) a payment in lieu of taxes is because when I draft these agreements, we eliminate the possibility that the development team, over the 10 years, coming back to your appraisal district with consultants and attorneys every year and challenging values. That prospect is eliminated, you have a fixed series of payments whereas if you leave it with a full levy, they have that opportunity every year to challenge the values,” Snowden said.
“No, I understand, and there’s still a lot of questions that have to be answered before we get there, so I think we need to look at advantages and disadvantages,” Nettleton said.
“Do they already have a site where they want to build?” County Commissioner Pct. 4 Gustavo “Gus” Flores asked.
Owens replied that 184 acres have been purchased off the west side of Old Hamilton Road across the street from an existing power substation, and 10 acres in that site are being considered for the proposed battery storage facility.
Owens then invited Horn to make his presentation about the facility.
Horn introduced himself, as representing Ernst & Young, as well as Jennifer Winn, the developer of the Tierra Seca Battery Project.
“My main goal, and I work with a lot of taxing jurisdictions, just like Val Verde County, around the state of Texas, around the country, to help my clients identify suitable sites to build projects, and as you mentioned, there has been a site that’s been identified, and it’s not the full 184 acres, it’s just a small subset of that,” Horn told the court.
Flores said he was concerned about the site being close to a neighborhood.
“I wonder if this is going to affect those families out there,” Flores said.
“Commissioner, the one question we had right off the bat, was, what happens if this goes boom, and how do we put it out?” Owens added.
Horn said the project developer would go over the project, and then answer questions about it.
Winn introduced her company, Cypress Creek Renewables, as a land and energy development firm based in the United States, with projects across the U.S.
“Tierra Seca is a 100-megawatt battery storage site. It’s off Highway 90 along Old Hamilton Road, behind the correctional facility and adjacent to the existing substation there. The estimated construction start date is going to be quarter four of 2023. It takes about 12 months to construct a project of this size, so estimated operational date is going to be quarter four of 2024.
“For construction of this size, we estimate around 30 to 40 employees, and once it’s in operation, we’ll have one full-time employee to manage everything,” Winn said.
She said she understood safety was a concern for the court.
“If you haven’t seen them before, (the batteries) are contained in what looks like shipping containers. There are protocols and everything in place to help with any potential fires or anything like that, and we will be working with consultants to work with our local fire departments here to train them what to do in case there is a fire at the site, and we would love to make a donation to the location fire department as well, as we can make this an annual training just so if something unlikely like this were to happen, everyone is up-to-date on their training,” she said.
During the ongoing discussion, Owens said he did not want Snowden to do work for the county without the county hiring him, but said the county cannot simply decide to hire him “because there is a process.”
After additional discussion, Owens asked County Attorney David Martinez if, under one of the two agenda items, the court could vote to hire Snowden or begin the process to hire him as a consultant.
Nettleton then made a motion to authorize Owens to sign an engagement letter with Snowden to begin looking at a Chapter 312 agreement, with County Commissioner Pct. 2 Juan Carlos Vazquez giving the second.
The court voted unanimously to approve Nettleton’s motion.
Owens told Horn the court “would continue the conversation” with their company for the battery storage facility.
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