County, Del Mar College consider giving Corpus Christi Polymers more time on tax deal

County, Del Mar College consider giving Corpus Christi Polymers more time on tax deal

With deadlines fast approaching, Corpus Christi Polymers is requesting more time to complete construction on an unfinished plant to fulfill tax abatement agreements with Nueces County and Del Mar College.

In 2012 M&G Resins approached local officials at Nueces County and Del Mar College with plans to build a new plastics plant and employ at least 200 full-time employees. The plant would produce purified terephthalic acid, used to make polyester fibers, and polyethylene terephthalate, used in the production of plastic bottles and containers.

The company was granted a 10-year tax abatement from Del Mar College, reducing the amount it owed in property taxes while construction was meant to be underway and the plant got started. M&G would receive tax benefits for 10 years, on the condition that it completed construction and employed 200 workers by 2022.

A similar agreement was made with Nueces County.

But just five years later, M&G filed for bankruptcy, with the plastics plant still not completed. Corpus Christi Polymers LLC bought the company’s assets, including the uncompleted plant for $1.1 billion, in 2018.

A train passes the Corpus Christi Polymers plant on Jan. 26, 2023.
A train passes the Corpus Christi Polymers plant on Jan. 26, 2023.

At the time, there was a dispute over how M&G’s bankruptcy affected the Nueces County and Del Mar College abatement agreements. The Nueces County Appraisal District considered the agreements terminated, while Corpus Christi Polymers argued that the agreements should still be in effect, according to Del Mar College board of regents meeting minutes. By 2021, a resolution was reached and an amended and restated abatement agreement was approved by the appraisal district and eventually Del Mar College in 2022.

The 2022 Del Mar College amended agreement granted Corpus Christi Polymers two more years to fulfill its end of the bargain, completing construction and hiring the required number of employees.

According to a 2022 Del Mar College financial report, in 2022 the Corpus Christi Polymers project value was just over $475 million. That year, 50% of the project value was abated, meaning Del Mar College forwent $484,669 in tax revenues that year alone. Over the course of the 10 years, the company received between 40% and 100% abatements.

In 2021, Nueces County Commissioners Court approved an amended abatement agreement after disagreements over whether Corpus Christi Polymers was entitled to an abatement in 2019 and 2020. In total, the company received a 100% abatement in 2018, no abatement in 2019, a 42% abatement in 2020, a 50% abatement in 2021, a 45% abatement in 2022 and a 40% abatement for 2023.

In the fiscal year ending in September 2023, the abatement with Nueces County amounted to $604,964. The company had the sixth-highest taxable value in the county in 2023, according to the county’s 2023 financial report. Of the three companies with tax abatement agreements that year, Corpus Christi Polymers had the largest total amount of taxes abated.

Now, with the amended agreements set to expire this month, Corpus Christi Polymers still has not completed construction.

According to a Tuesday presentation to the Del Mar College regents, construction was delayed due to rising inflation impacting the cost of construction and interest rates, as well as because the scope of previous construction was not at the “expected level.”

Corpus Christi Polymers requested that Del Mar College approve an extension, giving the company until 2027 to complete construction and meet the 200-employee requirement.

At this point, the company is no longer receiving tax abatements from Del Mar College. That portion of the agreement is concluded. But, if the company is unable to meet its obligations, it would then have to repay the taxes it would have owed without the abatement, said Lenora Keas, DMC executive vice president and chief operating officer.

“This is only an extension of the time to create the additional jobs and complete construction,” Keas said.

In return for extending the deadline by three years, Corpus Christi Polymers intends to pay “pilot payments” to the college totaling $1 million. The company has previously made pilot payments through the original and amended agreements.

“We feel like if they’re successful, then it will help create a very thriving (taxable) entity,” Keas said.

On Tuesday, the Del Mar College regents voted to give Corpus Christi Polymers the extra time it was asking for. However, the regents’ decision was tied to the actions of Nueces County. The college will only officially negotiate an extension under the terms approved by the regents this week if Nueces County agrees to a similar extension on its abatement agreement.

But Nueces County and Corpus Christi Polymers currently disagree on how much the company owes in taxes.

On Wednesday, the Nueces County Commissioners Court voted unanimously to extend its abatement with Corpus Christi Polymers, contingent upon the company paying a prorated amount based on what unpaid taxes it owes Nueces County based on the county’s assessment, as well as compounded interest and attorney fees related to the dispute.

“Absent agreement to these terms, Corpus Christi Polymers would be in default as of Dec. 31, 2024,” Commissioner Brent Chesney said while making the motion to extend.

Over the phone after the Wednesday meeting, Chesney told the Caller-Times said that the company has not fulfilled its obligations. The county is “fighting for every single dollar back,” Chesney said.

If the company agrees to pay the prorated amount based on what the county claims it is owed, the county will grant an extension, according to the motion approved by the Commissioners Court.

An attempt to reach Corpus Christi Polymers for comment Wednesday afternoon was unsuccessful.

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This article originally appeared on Corpus Christi Caller Times: Corpus Christi Polymers seeks extensions to tax deals

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