[Economic Development Committee on February 18, 2026.]
[00:00:12]
18TH 2026, AND THE TIME IS 2:05 PM I'M MAYOR PRO TEM MARTHA CASTEX TATUM, THE CHAIR OF OUR ECONOMIC DEVELOPMENT COMMITTEE MEETING, AND I LIKE TO CALL THIS MEETING TO ORDER.I DO WANT TO WELCOME ALL OF OUR COUNCIL MEMBERS AND STAFF AND GUESTS IN ATTENDANCE.
UH, COUNCIL MEMBER ALCORN IS IN THE CHAMBER COUNCIL MEMBER RAMIREZ, UH, STAFF FROM VICE MAYOR PRO TEM PECK'S OFFICE STAFF FROM COUNCIL MEMBER THOMAS'S OFFICE AND STAFF FROM COUNCIL MEMBER CAYMAN'S OFFICE IS ALSO HERE.
THIS MEETING IS OPEN TO THE PUBLIC AND HELD PER IN PERSON AND VIRTUALLY.
AND WE'RE ALSO BROADCASTING LIVE ON HTV COUNCIL MEMBERS AND STAFF.
IF YOU'LL HOLD YOUR QUESTIONS UNTIL THE END, IF THERE ARE ANY QUESTIONS ONLINE, YOU CAN PUT THAT IN THE CHAT.
UM, THERE ARE NO MEMBERS OF THE PUBLIC WHO SIGNED UP TO SPEAK TODAY.
HOWEVER, IF YOU WOULD LIKE TO SPEAK, THERE IS A SIGN IN SHEET, UM, TO YOUR RIGHT ON THE FRONT TABLE.
UM, PUBLIC SPEAKERS WILL HAVE A CHANCE TO SPEAK AFTER THE CONCLUSION OF THE PRESENTATIONS.
ANY QUESTIONS THAT YOU MAY HAVE CAN ALSO BE MAILED TO DISTRICT K@HOUSTONTX.GOV, AND WE WILL FORWARD THOSE TO THE RESPECTIVE DEPARTMENTS.
UH, FIRST ON OUR AGENDA TODAY, WE HAVE CASEY, HE, RICK, THE DIRECTOR OF PLANNING A ECONOMIC DEVELOPMENT DOWNTOWN HOUSTON PLUS, WILL PRESENT ON THE MAIN STREET PROMENADE OUTDOOR DINING DESIGN GUIDELINES.
WE ARE READY FOR YOUR PRESENTATION.
I WILL WAIT FOR IT TO BE PULLED UP.
SO THAT I CAN GUIDE YOU ALL THROUGH IT.
WHILE THE PRESENTATION IS BEING PULLED UP, UH, I'LL INTRODUCE MYSELF AGAIN.
I'M CASSIE HOPE RICH, DIRECTOR OF PLANNING AND ECONOMIC DEVELOPMENT FOR DOWNTOWN HOUSTON.
PLUS, WE REPRESENT THE ALLIANCE OF ORGANIZATIONS FOCUSED ON OUR URBAN CORE, SO THE DOWNTOWN REDEVELOPMENT AUTHORITY OR TOURISM NUMBER THREE, THE HOUSTON DOWNTOWN MANAGEMENT DISTRICT, AS WELL AS CENTRAL HOUSTON INC.
UH, THE LEGACY, UH, 40-YEAR-OLD 5 0 1 C SIX ORGANIZATION, UH, HERE IN DOWNTOWN.
SO WITH THAT, UH, WE'VE HAD THE PLEASURE OF BEING BEFORE YOU ALL IN THE PAST TO PROVIDE AN UPDATE ON THE MAIN STREET PROMENADE.
UM, TODAY I'LL BE FOCUSING ON THE FORTHCOMING ORDINANCE AND SPECIFIC ELEMENTS OF THAT ORDINANCE THAT OUR ORGANIZATION WILL WORK WITH THE CITY TO STEWARD.
QUICKLY, I'D LIKE TO JUST RECAP THE PROGRESS THAT WE'VE MADE ON MAIN STREET PROMENADE.
UM, AS YOU ALL MAY RECALL, IN 2021, IN THE WAKE OF THE PANDEMIC, UH, THE MORE SPACE MAIN STREET PROGRAM WAS LAUNCHED BY THE CITY IN PARTNERSHIP WITH US TO CREATE TEMPORARY SPACE FOR BUSINESSES TO HAVE, UM, COMPLIANT OUTDOOR DINING.
WHAT WE LEARNED IS THAT SMALL BUSINESSES AND RESIDENTS LOVED IT, AND WE AGREED TO WORK WITH THE CITY TO REALIZE A PERMANENT VERSION OF THIS PROJECT.
FROM THERE, WITH COMMUNITY ENGAGEMENT AND DETAILED DESIGN WORK, WE'VE REACHED A POINT, UH, AS OF LAST YEAR WHERE CONSTRUCTION BEGAN ON THE PROJECT, AND WE'RE HAPPY TO SAY IT'S PROGRESSING WONDERFULLY.
WHAT YOU CAN SEE HERE ON THE RIGHT HAND SIDE OF THE PRESENTATION IS AN OVERVIEW OF WHERE CONSTRUCTION HAS BEEN COMPLETED, UH, SO FAR, AND WHERE WE ARE STILL PROCEEDING WITH THE PROJECT, WORKING BACK FROM A COMPLETION OF THE PROJECT IN TIME FOR THE WORLD CUP.
UM, BUT OF COURSE, THE PROJECT WILL LIVE ON FOR DECADES TO COME.
IN A SUMMARY, IN A NUTSHELL, THE WORK THAT WE'RE DOING IS WIDENING THE PEDESTRIAN REALM, UM, IMPROVING STREET CROSSINGS AND OVERALL SUPPORTING LOCAL BUSINESSES.
UM, OUR CITY IS A WARM CITY, UM, BUT ESPECIALLY IN OUR DOWNTOWN WHERE WE HAVE THE URBAN HEAT ISLAND EFFECT.
AND SO WE'RE VERY PROUD TO BE BRINGING A SIGNIFICANT INCREASE IN TREES, SHADE STRUCTURES, AS WELL AS PLANTS.
UM, AND THIS PROJECT WAS MADE POSSIBLE BY FUNDING FROM THE DOWNTOWN REDEVELOPMENT AUTHORITY, AS WELL AS A HOUSTON GALVESTON AREA COUNCIL GRANT.
AND AS MENTIONED, WE INTEND TO COMPLETE THE PROJECT BY THE END OF MAY.
THESE ARE THREE PHOTOS TO SHOW YOU, UM, THE SORT OF THE BEFORE, THE IDEA, THE RENDERING, THE IMAGE OF WHAT WE INTENDED TO REALIZE AND, AND WHERE WE ARE TODAY.
UM, IT'S REALLY EXCITING TO SEE IF YOU HAVEN'T BEEN ABLE TO MAKE TIME TO WALK OUT TO MAIN STREET RECENTLY, UH, WE WOULD ENCOURAGE YOU TO DO SO.
IT'S, UM, QUITE LOVELY TO SEE THIS PROJECT COME TO LIFE.
AS PART OF, UH, THIS PROJECT, OF COURSE, WE ARE REDESIGNING THE RIGHT OF WAY, UM, THAT'S REALLY LIFTED UP HERE BY THE FOUR BIG SHIFTS THAT WE TALKED ABOUT FOR THE PROJECT NUMBER TWO AND FOUR, UH, NUMBER TWO AND FOUR.
UH, WE ARE REALIZING ACCESSIBILITY IMPROVEMENTS FOR THE PROMENADE AS WELL AS THE CREATION OF MORE SHADE EXPERIENCES AS MENTIONED, UM, A PART OF THESE BIG SHIFTS THAT
[00:05:01]
HAVE COME OUT OF THE DESIGN, UM, ALSO REQUIRE A, A NEW APPROACH TO MAINTENANCE AND OPERATIONS.SO THE FIRST IS, HOW ARE WE GOING TO, UH, ENHANCE THE WAY WE MAINTAIN THIS SECTION OF MAIN STREET? AND THE SECOND IS, HOW ARE WE GOING TO REALIZE THIS GOAL OF PLACEMAKING? WE'VE BUILT MORE SPACE, BUT HOW DO WE TEND TO INTEND TO STEWARD IT? NEXT SLIDE, PLEASE.
AND THAT'S WHERE THE ORDINANCE COMES IN.
THE ORDINANCE THAT WE'VE BEEN WORKING ON WITH THE CITY WILL ALLOW FOR US TO INCREASE OUR MAINTENANCE AND SECURITY SERVICES, UM, TREATING THE PROMENADE MUCH LIKE WE DO THE PARKS THAT WE CARE FOR IN OUR DOWNTOWN, UM, ADDITIONAL CARE AND, UM, AND COVERAGE ALONG THE PROMENADE.
UM, AND WE ALSO HAVE CREATED OUTDOOR DINING GUIDELINES.
UM, WE'RE CREATING MORE SPACE FOR SIDEWALK CAFES.
UM, AND BECAUSE WE HAVE SUCH AN EXPANSIVE SPACE THAT WE ARE CREATING ON PROMENADE, UH, ON THE PROMENADE, AND WE NEED TO MAINTAIN, UH, PEDESTRIAN CIRCULATION OR PATH OF TRAVEL, UM, WE'VE HAD TO CREATE SPECIFIC GUIDELINES FOR, FOR WHAT THOSE SPACES CAN LOOK LIKE, WHAT THEIR FOOTPRINT CAN LOOK LIKE.
UM, AND LASTLY, THE ORDINANCE WILL ALLOW US TO, UH, REALIZE MORE PROGRAMMING AND EVENTS AND OVERSEE LICENSES FOR THIRD PARTY EVENTS JUST AS WE DO IN PARKS AND DOWNTOWN.
IN TERMS OF THE ORDINANCES AREA OF COVERAGE, WE'RE LOOKING AT WHAT WE REFER TO AS THE MAIN STREET PROMENADE.
SO THAT IS MAIN STREET BETWEEN COMMERCE OR ALLEN'S LANDING AND DALLAS STREET.
WHILE CONSTRUCTION IS ONLY TOUCHING PRIMARILY THE SECTION OF MAIN STREET BETWEEN COMMERCE AND RUSK, WE AS AN ORGANIZATION HAD WORKED WITH THE CITY YEARS BEFORE TO CLOSE DOWN SEVERAL BLOCKS OF MAIN STREET FOR THE CREATION OF MAIN STREET SQUARE.
SO THIS IS WHY THE ORDINANCE IS EXTENDING ALL THE WAY DOWN TO DALLAS STREET.
WE WANT TO REALLY LINK UP THE EXPERIENCES THAT ONE WE'RE CONSTRUCTING TODAY, AND TWO THAT HAVE BEEN THERE THANKS TO INVESTMENTS OF THE PAST.
YOU ALSO SEE HERE THAT THE ORDINANCE WILL EXTEND TO THE SIDE STREET SLIGHTLY, AND THAT'S BECAUSE THE NATURE OF THESE BUILDINGS, A NUMBER OF THE, THE GROUND FLOOR EXPERIENCES OR THE BUILDINGS THEMSELVES WRAP AROUND THE CORNER.
AND THIS CREATES FOR A, A SIMPLER, UM, EXPERIENCE SET OF UNDERSTANDINGS FOR THE PROPERTIES.
THE OUTDOOR DINING GUIDELINES WILL OFFER FOUR TYPES OF OUTDOOR DINING SPACES FOR BUSINESSES.
AS I MENTIONED, THE PROMENADE IS CREATING A LOT MORE SPACE FOR PEOPLE TO WALK AND FOR THESE, UM, OUTDOOR PATIOS BISTRO SPACES TO EXIST.
AND BECAUSE OF THAT, WE WORKED CLOSELY WITH OUR DESIGN TEAM IN THE CITY TO FIGURE OUT WHAT IS THE BEST WAY TO MAINTAIN PATH OF TRAVEL AND OTHER REQUIREMENTS THAT WERE PUT FORTH BY LIFE AND SAFETY AGENCIES, WHILE ALSO MAKING SURE WE HAVE THAT MORE SPACE.
AND THEN, OF COURSE, MAKING IT VERY EASY AND SIMPLE FOR SMALL BUSINESSES TO UNDERSTAND HOW THEY CAN UTILIZE THAT SPACE.
QUICKLY, I WILL JUST RUN THROUGH WHAT THOSE DIFFERENT SPACES ARE.
SO ONCE WE BEGIN WORKING WITH BUSINESSES STARTING IN MARCH, UH, FOLLOWING THE FORTHCOMING ORDINANCE COMING TO COUNCIL, WE'LL BE ABLE TO SIT DOWN WITH EACH AND EVERY BUSINESS AND EXPLAIN TO THEM WHAT IS EXACTLY IN FRONT OF THEM THAT THEY ARE ABLE TO UTILIZE.
THE FIRST IS A BISTRO SPACE, SO LOOKING AT THE SPACE ADJACENT TO A PROPERTY.
A CAFE SPACE WOULD ALSO BE ADJACENT TO THE PROPERTY, BUT A SLIGHTLY LARGER SPACE.
UM, THIS IS A, SOMETHING THAT I COULD REFERENCE THE CURRENT CONFIGURATION THAT WAS ENABLED BY THE MORE SPACE MAIN STREET, SORT OF 1.0 PROGRAM.
UM, IF YOU CAN IMAGINE IN YOUR MIND, FINN HALL, THEY HAD, UH, SORT OF A TEMPORARY OUTDOOR PATIO EXPERIENCE ADJACENT TO THE SIDEWALK THAT THEIR, UM, F AND B TENANTS WERE ABLE TO UTILIZE THEIR PATRONS.
IT'S EXACTLY THAT SAME TYPE OF EXPERIENCE.
SO IT LEAVES THE SIDEWALK OPEN FOR FOLKS TO MOVE UP AND DOWN.
UM, AND THEN THAT OUTDOOR DINING EXPERIENCE IN THE FORMER ROADWAY OUTDOOR ROOM.
AND THEN THE INTERIOR EXTENSION.
AND THIS IS REALLY WHERE WE CREATE SOMETHING, UM, WITH A BUSINESS ADJACENT TO THEIR SPACE THAT COMPLIMENTS AN EXISTING, UM, PORTION OF THEIR INTERIOR FOOTPRINT.
AGAIN, BECAUSE THE MAIN STREET PROMOD IS CREATING SO MUCH, UH, NEW AND UNIQUE SPACE, WE HAVE PUT TOGETHER ALTERNATIVE CONFIGURATIONS FOR TENANT FLEXIBILITY.
HERE ARE A FEW EXAMPLES OF THAT HERE.
AND HERE ARE SEVERAL MORE EXAMPLES.
ONE OF THE KEY POINTS I WOULD LIFT UP WITH THESE, UM, ALTERNATIVE CONFIGURATIONS IS THAT WE AS DOWNTOWN HOUSTON, UM, ALONG WITH THE CITY, WILL BE IN A POSITION TO HELP BUSINESSES WORK TOGETHER IF THEY WANTED TO SHARE AN OUTDOOR SPACE, OR IF ONE BUSINESS IS TOTALLY UNINTERESTED IN HAVING ANY SORT OF OUTDOOR PATIO, MIGHT THE SPACE IN FRONT OF THEM IN THAT OUTDOOR ROOM BE UTILIZED BY THEIR NEIGHBOR.
UM, THAT'S SOMETHING THAT WE ALSO TESTED OUT DURING MORE SPACE, MAIN STREET 1.0.
SO THERE'S PRECEDENT FOR THIS, UM, AND IT'S SOMETHING THAT BUSINESSES ARE, ARE HAPPY TO SEE IN THE PLAN.
IN ADDITION TO MAKING IT EASY AND
[00:10:01]
CLEAR TO UNDERSTAND THE OPPORTUNITY FOR OUTDOOR DINING IN FRONT OF ONE SPACE, WE ALSO HAVE PUT FORTH OUTDOOR DINING GUIDELINES FOR THE FIXTURES AND FURNITURE.UM, GIVEN THAT WE'LL BE WORKING WITH THE CITY TO EXECUTE SUB LICENSEES FOR THESE SPACES, WE WANTED TO MAKE SURE THAT THERE ARE, UM, MATERIALS OUT THERE THAT ARE STURDY AND RELIABLE, GIVEN THAT THERE'LL BE, UM, A NEW SORT OF HEAVY FLOW OF PEDESTRIAN USE OF THE SPACE.
UM, ALSO HAVING THESE GUIDELINES, GUIDELINES WILL HELP THE CITY TO REVIEW THESE NEW DISTINCT TYPE OF OUTDOOR DINING EXPERIENCES.
SO THE NEXT STEPS, AS WE'VE MAPPED THEM OUT WITH THE CITY, UM, WE'RE EXCITED TO CREATE VISIBLE CHANGE IN DOWNTOWN FOR RESIDENTS AND VISITORS WITH THIS PROJECT.
BUT REALLY WITH THIS ORDINANCE, IT'LL ALLOW US TO COMPLETE THE VISION OF THE PROJECT.
UM, WE'RE HAPPY TO SEE THAT THE ORDINANCE WILL ENSURE BOTH PUBLIC SAFETY, BUT ALSO GUIDELINES THAT WILL CREATE, UM, A COMFORTABLE, WARM, SAFE EXPERIENCE FOR, FOR VISITORS, FOR RESIDENTS, BUT ALSO FOR BUSINESSES, SOME CLARITY AS TO HOW THEY CAN TAKE ADVANTAGE OF THE MORE SPACE.
AND WE LOOK FORWARD TO, TO THE ORDINANCE COMING BEFORE THE COUNCIL, UM, ALONG WITH THE GUIDELINES.
UM, AND THAT WILL ALLOW US TO FACILITATE WHAT WE JUST WENT OVER AS WELL AS THE PROGRAMMING AND IMPROVED MAINTENANCE FOR THE STREET.
UM, IT WASN'T LIFTED UP IN THE PRESENTATION, BUT I WILL ADD, UM, MY PURVIEW ALSO INCLUDES ECONOMIC DEVELOPMENT.
AND FOR THE LAST YEAR, WE'VE HAD THE PLEASURE OF, UM, REVIVING OUR STOREFRONT GRANT PROGRAM.
AND SO WE'VE BEEN WORKING WITH SMALL BUSINESSES, RIGHT, UM, ALONG THE MAIN STREET PROMENADE AND AROUND DOWNTOWN ON HOW THEY CAN BEST LEVERAGE THESE GRANTS FOR BUILDING OUT THEIR NEW OUTDOOR SPACES.
SO WE REALLY WANTED TO BE AS SUPPORTIVE AS POSSIBLE FOR ALL THE BUSINESSES, AND IT'S BEEN GREAT TO WORK WITH ALL OF THEM.
THAT CONCLUDES OUR PRESENTATION.
UM, PLEASE LET ME KNOW IF YOU HAVE ANY QUESTIONS.
THANK YOU, CASSIE, FOR THE PRESENTATION.
UM, HAVE Y'ALL DETERMINED WHAT, WHAT THE LICENSES WILL COST? THAT'S STILL BEING DECIDED.
AND WHAT, UH, WHAT WILL Y'ALL RELY ON TO TRY TO FIGURE THAT OUT? WE HAVE PRECEDENT FOR THE MORE SPACE MAIN STREET, WHICH WAS A TEMPORARY PROGRAM, AND THERE WASN'T A COST FOR THE LICENSE.
AND THEN TODAY, SHOULD AN INDIVIDUAL BUSINESS WANT TO GO FORTH WITH SECURING A SIWA CAFE LICENSE, THERE'S A SET FEE ESTABLISHED BY THE CITY.
SO AS WE WORK WITH THE PERMITTING AGENCIES, WE'RE SORTING THROUGH WHAT THAT COST WOULD MAKE SENSE TO BE.
AND, UH, WHEN DO YOU THINK THIS WILL ALL BE, UH, MAYBE COMPLETE'S NOT THE RIGHT WORD, BUT, UH, IN TIME FOR THE WORLD CUP OR MM-HMM
THE CONSTRUCTION OF THE PROJECT IS INTENDED TO BE COMPLETE BY THE WORLD CUP AND CONFIRMED WITH OUR HEAD OF CAPITAL PROJECTS THAT WE'RE ON TRACK.
UM, WE'VE COMPLETED OVER HALF OF THE PROJECT AT THIS POINT.
UM, AND CONSTRUCTION'S BEEN BEEN MOVING SMOOTHLY.
AND THANKS FOR THE PRESENTATION.
I HAVE WALKED DOWN THERE AND IT'S AMAZING.
SO BASICALLY THESE GUIDELINES WERE, WERE THE, ANY OF THE RETAILERS AND PEOPLE INVOLVED IN CREATING 'EM? I THINK YOU MAY HAVE SAID THAT AND I MISSED IT.
WE'VE, WE'VE HAD PUBLIC MEETINGS AND FOCUS GROUPS WITHIN PLUS YEARS.
SO THIS IS ALL NOT GONNA BE NEW TO THEM, BUT WHAT, SO THEY GET THE LICENSE, THEN THEY KIND OF HAVE TO CONFORM TO THESE GUIDELINES RIGHT, THAT THEY KNOW ABOUT? CORRECT.
AND, UM, FOR BUSINESSES ON MAIN STREET, THIS IS EXPANDING SPACE FOR THEM.
SO THAT MEANS MORE, UH, FOLKS, MORE PATRONS FOR THEM.
SO THEY'RE ALL, THEY'RE ALL EAGERLY AWAITING, THEY'RE EXCITED.
SO UP TO NOW IT'S JUST KIND OF IN THE WILD WEST, DO WHATEVER YOU WANT OUTSIDE.
ANY OTHER QUESTIONS? CAN YOU TALK A LITTLE BIT ABOUT, UM, ON THE MAP THAT SHOWS THE ENTIRE MAIN STREET, LIKE THE SIDE STREETS, WHAT, WHAT ACTUALLY WILL TAKE PLACE ON THOSE, ON THOSE SIDE STREETS? SO IN TERMS OF PHYSICAL IMPROVEMENTS TO THE SIDE STREETS, THOSE HAVE NOT BEEN A PART OF THE CONSTRUCTION PLANS.
RATHER, THOSE SIDE STREETS WILL FALL UNDERNEATH THE ORDINANCE, AND THAT'S TO ALLOW FOR BUSINESSES, UH, OR, OR PROPERTIES THAT WRAP AROUND THE CORNER TO BE INCLUDED IN THE GUIDELINES AND NOT BE CONFUSED BY WHETHER OR NOT THE GUIDELINE APPLIES TO HALF OF THEIR PROPERTY OR ALL OF THEIR PROPERTY.
UM, AND SO WE LOOKED AT THE CONDITIONS OF A NUMBER OF THE PROPERTIES ALONG THE MAIN STREET PROMENADE AND, AND THEY DO WRAP AROUND THE CORNER.
SO THIS PROVIDES CLARITY FOR THE APPLICABLE FOOTPRINT OF THE ORDINANCE.
IF NO FURTHER QUESTIONS, THANK YOU VERY MUCH FOR THE PRESENTATION.
WE LOOK FORWARD TO THE COMPLETION.
UH, IT DOES LOOK GREAT DOWN THERE.
UM, AND WE THINK THAT SO MANY OF OUR BUSINESS OWNERS WILL TAKE ADVANTAGE OF IT AND PROVIDE SOME ADDITIONAL SPACE FOR HOUSTONIANS AND OUR VISITORS TO EAT OUTSIDE.
OUR NEXT PRESENTATION WILL BE DONE BY SENIOR STAFF ANALYST ANDREW BUSKER, WITH THE MAYOR'S OFFICE OF ECONOMIC DEVELOPMENT, WHO WILL PRESENT ON A TAX ABATEMENT PROPOSAL.
MR. BUSKER, THANK YOU FOR BEING HERE AGAIN.
UM, THANK Y'ALL FOR HAVING US.
WE'RE READY FOR YOUR PRESENTATION WHEN YOU'RE READY.
[00:15:08]
GOOD AFTERNOON.I'M ANDREW BUSKER IN THE MAYOR'S OFFICE OF ECONOMIC DEVELOPMENT.
UH, TODAY WE'LL BE DISCUSSING A TAX ABATEMENT PROPOSAL FOR NRG GREENS BAYOU SIX LLC.
SO THE WAY THIS PRESENTATION WILL GO, JUST LIKE MANY OTHER TAX ABATEMENT, UH, PROPOSALS, IS WE'LL HAVE SOME TIME TO DISCUSS THE PROJECT AND INTRODUCE THE PROJECT TO YOU ALL.
AND THEN WE'LL DISCUSS THE, UH, ECONOMIC DEVELOPMENT TAX ABATEMENT AND HOW THAT'S APPLICABLE TO THE PROJECT.
AND THEN WE'LL HAVE ROOM, UH, FOR QUESTIONS AT THE END.
UM, SO I WOULD LIKE TO, BECAUSE ENERGY, UM, IS A VERY TECHNICAL COMPANY WITH A LOT OF, UM, EXPERIENCE THAT IS BEYOND JUST WHAT OUR, UH, MAYOR'S OFFICE OF ECONOMIC DEVELOPMENT CAN SPECIALIZE IN.
I WOULD LIKE TO BRING UP, UH, TONY SCH FROM KROLL.
UH, HE'S THE CONSULTING FIRM, UH, REPRESENTATIVE FOR THIS PROJECT.
SO TONY WILL GO THROUGH THE PROJECT IN, UM, INTRODUCTION, UH, FOR YOU ALL, AND THEN I WILL, UM, PICK IT UP AGAIN TO TALK ABOUT THE ABATEMENT.
I'M A MANAGING DIRECTOR IN OUR SITE SELECTION AND INCENTIVES ADVISORY PRACTICE.
UM, MORE BROADLY, KROLL ADVISES COMPANIES ON WHERE TO PUT MAJOR CAPITAL INTENSIVE PROJECTS THAT WE FEEL IS A COMPOSITE THAT THE TARGET SITE IN HOUSTON IS A VERY APPROPRIATE PLACE FOR THIS PROPOSED INVESTMENT.
UH, IN SHORT, THIS WOULD BE A 455 MEGAWATT PEAKING POWER UNIT THAT WOULD BE ADDED TO AN EXISTING POWER GENERATION COMPLEX.
UH, AND PEAKING POWER IS DIFFERENT THAN BASE LOAD GENERATION OR RENEWABLES IN THE SENSE THAT IT COMES ON WHEN THERE ARE TIMES OF GRID STRESS.
IF WE COULD ADVANCE ONE PERFECT.
UH, AND IT WOULD PROVIDE POWER THAT IS ABOVE AND BEYOND THE MARGIN THAT IS REQUIRED TO BASE LOAD GENERATION PLAN ON THE AMOUNT OF ELECTRICITY THAT ERCOT NEEDS ON ANY GIVEN DAY.
SO, UH, THEY DO A TREMENDOUS JOB OF FORECASTING THE ELECTRIC NEEDS, BUT WHAT THEY DON'T KNOW IS WHEN, UH, SUN IS GONNA SHINE, WHEN WIND IS GONNA BLOW, AND, UH, WHEN ADDITIONAL POWER AND STRAIN ON THE GRID IS GONNA BE PRESENT FROM, SAY, AIR CONDITIONERS OR HEATERS IN THE WINTER.
UM, THE PROPOSED PRICE TAG OF SOMETHING LIKE THIS IS PRETTY, UH, HIGH IN GETTING HIGHER, UH, AS WE GO ALONG.
THE ORIGINAL PRICE TAG THAT WE SAW WAS CLOSER TO 300 MILLION.
THE, UH, ESTIMATED CAPEX IS NOW CLOSER TO $570 MILLION.
UM, AT PEAK, IN ORDER TO CONSTRUCT THIS FACILITY, IT WOULD TAKE 250 CONSTRUCTION JOBS.
SO A HEALTHY SLICE OF CONSTRUCTION ACTIVITY WOULD TAKE PLACE OVER TWO TO THREE YEARS.
UM, AND IT WOULD GENERATE 14 FULL NEW JOBS.
SO THAT WOULD BE NET NEW TO THE EXISTING POWER GENERATION COMPLEX HEADCOUNT NEXT DOOR, UH, IT WOULD TAKE PLACE ON A RELATIVELY MODEST SIX ACRES, UH, INSIDE BELTWAY EIGHT, UM, AND CLOSE TO HIGHWAY 90 ON IRENE ROAD.
AND THAT SPACE IS CURRENTLY UNUTILIZED BY ANY EXISTING IMPROVEMENTS OR DEVELOPMENT.
UM, MAJOR CONSTRUCTION WOULD TAKE PLACE AT THE END OF THIS YEAR IN 2026, AND IT WOULD BE PROJECTING AN IN-SERVICE STATE OF 2028.
IT COULD PUT COMMERCIALLY OPERABLE ELECTRICITY ON THE GRID.
UM, STATE-OF-THE-ART TECHNOLOGY WOULD BE EMPLOYED IN THESE TYPES OF PEAKING UNITS.
SO GENERAL ELECTRIC SEVEN H TURBINE, WHICH IS, UH, LIGHT YEARS AHEAD OF THE, UH, LEGACY UNITS THAT, UH, THE STATE OF TEXAS IS USED TO THAT WERE CREATED IN THE SEVENTIES AND EIGHTIES.
UM, MEANS GREATER EFFICIENCY, DOING MORE WITH LESS GAS, UM, AND THE, UH, COMBUSTION TURBINE WOULD RESULT IN MUCH LOWER EMISSIONS.
SO, UM, THAT IS A, A POTENTIAL ENVIRONMENTAL BENEFIT.
THAT IS, UM, I THINK WELCOME NEWS WHEN WE ALL KNOW THAT WE NEED, UH, EXTENSIVE SOURCES OF POWER TO BE ABLE TO MANAGE NEW ELECTRICITY ON THE GRID.
UH, EXTENSIVE POPULATION GROWTH IN THE GREATER HOUSTON AREA.
THIS WOULD BE ABLE TO POWER 300,000 HOUSEHOLDS WHEN TURNED ON AND RAMPED UP TO FULL CAPACITY.
SO, UM, I THINK WE ALL HAVE, UH, BROAD MEMORIES OF WINTER STORM MURRY, NONE OF THEM PLEASANT.
SO, UM, SITTING AROUND WAITING FOR POWER TO COME BACK ON OR SHORTENING BLACKOUTS, UM, THAT IS SOMETHING THAT THIS TYPE OF INVESTMENT WOULD SEEK TO AVOID.
UM, AS FAR AS THE DECISION MAKING MATRIX IS CONCERNED, UM, THERE IS SIGNIFICANT PROPERTY TAX EXPOSURE BECAUSE OF HOW TEXAS'S ADVIL, AVALOR PROPERTY TAX SYSTEM, UH, WORKS COMPARED TO SOME OF THE OTHER LOCATIONS THAT ARE UNDER CONSIDERATION FOR THIS INVESTMENT CAPITAL.
UM, ANYBODY THAT GETS A PROPERTY TAX NOTICE AT THE END OF THE YEAR RECOGNIZES THAT WE HAVE RELATIVELY HIGH AVALOR PROPERTY TAX HERE.
SAME IS TRUE FOR CAPITAL INTENSIVE ASSETS, BUT MORE SO, UM, SO WE'RE LOOKING AT WAYS THAT WE CAN TRY TO DEFRAY THAT WITH STATE LEVEL PROGRAMS AND LOCAL PROGRAMS. UM, THE LOCAL TAX ABATEMENT THAT MR. BUSKER, UM, REFERENCED AS AN APPLICATION THAT WE TURNED INTO THE CITY IN SEPTEMBER OF 2005.
SINCE THEN, WE'VE BEEN FORTUNATE ENOUGH TO HAVE THE PARTICIPATION OF GALENA PARK ISD WITH A JETTY, WHICH IS A JOBS ENERGY TECHNOLOGY AND INNOVATION VALUE LIMITATION AGREEMENT, WHICH WAS
[00:20:01]
RECENTLY APPROVED AND EXECUTED BY THE SCHOOL DISTRICT.AND THEN THERE WOULD BE SEVERAL OTHER COMPLIMENTARY PROGRAMS THAT THE STATE HAS DESIGNED TO INDUCE NEW ELECTRIC GENERATIONS SPECIFICALLY, UM, PEAK LOAD GENERATION, UM, WITHIN THE STATE, UM, WITH SB SIX.
SO THESE PROGRAMS ARE ALL DESIGNED TO DOVETAIL TOGETHER.
UM, I THINK WE CAN PROVIDE ADDITIONAL DETAILS ON THOSE ENERGY FUND, UM, UM, UH, MECHANICS.
BUT ESSENTIALLY WHAT IT IS, IS IT'S A LOW INTEREST LOAN THAT'S OFFERED BY THE STATE AT 3%.
UM, AND THAT IS THE REAL BENEFIT OF THAT IS A STABLE RATE.
IT DOES NOT FLUCTUATE LIKE AN ADJUSTABLE RATE MORTGAGE.
IT STAYS FLAT FOR THE ENTIRE TERM OF THE LOAN.
UM, IN ORDER TO, UH, TRY TO FIGURE OUT WHERE THIS FITS IN THE GRAND SCHEME OF THINGS, UM, THE, UH, THE, THE STATE OF TEXAS HAS ALREADY APPROVED THAT LOAN, SO THIS IS REALLY THE FINAL PIECE OF THE PUZZLE.
UM, WE SEE THIS AS KIND OF A MULTI LEGGED STOOL.
IF YOU PULL AWAY ANY OF THESE POTENTIAL SOURCES OF PUBLIC PRIVATE PARTNERSHIP, UM, THE PROFORMA NEEDS TO BE COMPLETELY RECONFIGURED.
UM, AND ENERGY IS A NATIONWIDE FOOTPRINT OF POWER GENERATION AND OTHER INVESTMENT OPPORTUNITIES.
SO WHAT WE'RE TRYING TO GET THEM TO DO, UM, BY VIRTUE OF SECURING THESE PUBLIC PRIVATE PARTNERSHIP AGREEMENTS IS FIND THAT REASON TO INVEST ALL THAT CAPITAL IN HOUSTON AND NOT FIND A, A GREATER ROI SOMEWHERE ELSE OUTSIDE OF THE HOUSTON REGION.
UM, AS FAR AS THE, THE TWO PREMISES THAT WE'RE BRINGING TO COUNCIL, UM, THERE ARE TWO MAIN CATEGORIES.
WE SAY, KEEP THE LIGHTS ON AND KEEP THE DOOR OPEN.
THIS IS REFLECTED BY THE STATE'S COMMENTS AROUND NEW ELECTRICITY GENERATION, UM, REDUCING POWER OUTAGES FOR CUSTOMERS, SHORTENING THE OUTAGE DURATION FOR AFFECTED CUSTOMERS, AND THEN PREVENTING DRASTIC COST INCREASES TO RATE PAYERS.
THAT'S EXACTLY WHAT YOU WANT IN PEAKING POWER.
UH, THE MOST EXPENSIVE ELECTRICITY YOU CAN GET IS PEAKING POWER.
SO THIS NEW ASSET WOULD HELP KEEP THOSE COSTS UNDER CONTROL.
UH, AND THEN AS FAR AS, UM, THE, THE CITY OF HOUSTON'S ABILITY TO ATTRACT NEW CAPITAL PROJECTS, WHEN YOU HAVE PROJECTS THAT ARE CONSIDERING THE REGION, ONE OF THE FIRST THINGS THEY ASK IN THE SITE SELECTION INDUSTRY IS, DO YOU HAVE ADEQUATE POWER? DO YOU HAVE WATER? DO YOU HAVE AVAILABLE LAND? DO YOU HAVE THE RIGHT WORKFORCE, TAXES, UTILITIES, ET CETERA.
THIS HELPS ANSWER ONE OF THOSE KEY COMPONENTS IS WE'VE GOT THE POWER.
UM, IN ADDITION TO THAT, UM, THESE TYPES OF, OF UNITS ARE BEST DESIGNED AND BEST DEPLOYED, UH, WHEN THERE IS TREMENDOUS GRID STRESS.
SO ERCOT WOULD BE, UH, WELCOMING ASSETS LIKE THIS WITH OPEN ARMS TO TRY TO MAKE SURE THAT THEY'RE FORECASTING AND, AND ADEQUATELY CREATING A MARGIN AROUND WHAT WE MIGHT NEED, NOT JUST TOMORROW, BUT FIVE YEARS FROM NOW, WE COULD HAVE A SIGNIFICANTLY DIFFERENT ENERGY MIX.
UM, I DID MENTION WINTER STORM URI.
A COUPLE OF MY COLLEAGUES AND I LIVED IN THE OFFICE DURING WINTER STORM URI.
WE WERE EXTREMELY FORTUNATE TO MAKE IT THERE.
UM, I'VE HEARD HORROR STORIES ALL OVER THE STATE OF TEXAS AND, UM, THE STATE OF TEXAS'S, UH, REPUTATION WAS SEVERELY HARMED BY WINTER STORM URI.
SO WE WANNA MAKE SURE THAT WE DO EVERYTHING WE POSSIBLY CAN WHILE WE DON'T HAVE THOSE EVENTS, UM, IN THE OFF YEARS TO MAKE SURE THAT WE'RE PLANNING FOR RESILIENCY AND, UH, THE MARGIN AHEAD.
UM, WE HAVE, UH, ESSENTIALLY, UM, A WINDOW OF OPPORTUNITY HERE.
UM, GIVEN THAT MOST OF THE EQUIPMENT IT TAKES TO BUILD A FACILITY LIKE THIS AS LONG LEAD TIME EQUIPMENT TURBINES ARE AN EXTREMELY SHORT DEMAND, UM, THE, THE, UM, ELECTRICAL EQUIPMENT AND THE LINES AND THE TRANSFORMERS AND THE SUBSTATIONS THAT YOU NEED TO BUILD TO SUPPORT SOMETHING LIKE THIS ALL OR YEARS IN ADVANCE.
AND SO IF THE, THIS WINDOW WERE TO CLOSE AND THIS CAPITAL WOULD BE, UH, REDEPLOYED ELSEWHERE WITHIN THE NRG NETWORK, TEXAS WOULD LOSE OUT ON AN OPPORTUNITY TO SECURE THIS TODAY.
UM, SO OUR BLUEPRINT FOR SUCCESS IS WE RECEIVE SUFFICIENT INCENTIVE SUPPORT FOR THE PROPOSED PROJECT AT GREENS BAYOU, UH, SIXTH UNIT, SIXTH OPERATING UNIT THERE.
UM, THE ROI TARGET IS ACHIEVED.
N'S BOARD CAN APPROVE THIS, AND THE CITY OF HOUSTON RECEIVES NEW TAX REVENUE THAT IT WAS NOT COUNTING ON YESTERDAY.
UM, THE, UH, LACK OF, OF SUFFICIENT INCENTIVE SUPPORT FROM THE STATE OF TEXAS AND FROM OUR, OUR LOCAL PARTNERS, UM, RESULTS IN HAVING TO GO BACK TO THE DRAWING BOARD, TRY TO INCREASE THE ROI, AND IF THE ROI IS NOT THERE, THEN OBVIOUSLY THE, THE BOARD CORPORATE BOARD'S GOT A VERY DIFFICULT DECISION TO MAKE.
UM, SO THAT CONCLUDES MY REMARKS.
UM, I, I THINK, UM, MR. BUSKER AND, AND, UM, UH, MS. TILLSON HAVE BEEN INCREDIBLY GRACIOUS IN, IN, UH, EVALUATING THIS APPLICATION FOR US.
AND WE'RE CERTAINLY AN OPEN BOOK AND WANT TO ANSWER ANY QUESTIONS THAT WE CAN HERE AT THE END OF THE PRESENTATION OR GOING ONWARD, UH, FOR POTENTIAL FUTURE ACTION BY THE COUNCIL.
THANK YOU FOR THE PRESENTATION.
UH, MR. BUSKER, YOU WANT TO TAKE IT FROM HERE? YES.
OR DO YOU WANT US TO OPEN UP FOR QUESTIONS? UH, NOW I'LL TAKE IS YOUR QUESTION FOR THE, THE SPEAKER.
SO NOW TALK ABOUT THE, UH, TAX ABATEMENT ITSELF.
SO, AS A REFRESHER, UH, OUR TAX ABATEMENT ORDINANCE IS CHAPTER 44, ARTICLE FOUR OF OUR CODE OF ORDINANCES.
WE HAVE FIVE DIFFERENT TYPES OF TAX ABATEMENTS CURRENTLY.
[00:25:01]
AND THE ONE WE'RE TALKING ABOUT SPECIFICALLY IS THE ECONOMIC DEVELOPMENT ABATEMENT, WHICH IS SECTION 44 DASH 1 27.SO THE ELIGIBILITY CRITERIA, CRITERIA IN A GENERAL SENSE IS, UM, AN ECO, AN ECONOMIC BENEFIT TO THE CITY AS A WHOLE, UH, PROJECTED TO INCREASE PROPERTY VALUE ON THAT SITE BY $1 MILLION, UH, OR FOR CERTAIN CENSUS TRACKS, UH, $500,000.
UM, THEN THE PROJECT WILL CREATE, RETAIN, OR PREVENT THE LOSS OF PERMANENT JOBS.
UH, AND THEN WITHIN THAT ORDINANCE AS WELL, IT GIVES US SOME FLEXIBILITY TO GO UP TO 90% OF AN ABATEMENT.
UM, AND THEN THE, THE ORDINANCE ALSO REQUIRES A CERTAIN AMOUNT OF COMMUNITY BENEFITS THAT ARE ALL NEGOTIATED WITH THE COMPANY BASED ON THE PROJECT AND WHAT'S REALISTIC.
SO, THIS PROJECT IN PARTICULAR IS PRETTY UNIQUE FOR OUR OFFICE.
UM, WE TRADITIONALLY HAVE A, YOU KNOW, A TIER STRUCTURE ON DIFFERENT PROJECTS THAT WE'RE FOCUSED ON.
UM, AND UNIQUELY, UH, THIS PROJECT DOESN'T FIT INTO OUR NORMAL MOED PRIORITIES.
THAT DOESN'T, THAT DOESN'T MEAN THAT IT'S A BAD PROJECT BY ANY MEANS.
IN FACT, THIS IS A FANTASTIC PROJECT.
THE, UH, WHAT MAKES THIS UNIQUE REALLY IS JUST THE INVESTMENT AMOUNT, UM, THE SCALE OF THIS PROJECT, UH, WHAT LASTING IMPACT IT CAN HAVE TO THE COMMUNITY AND THE REGIONAL GRID.
AND SO HERE, UH, YOU KNOW, ECONOMIC DEVELOPMENT IS LIMITED WITHOUT RELIABLE ENERGY INFRASTRUCTURE.
SO AS WE SEE MORE INVESTMENT WITH MORE PEOPLE COMING HERE, UH, WITH DISCUSSIONS OF, UM, YOU KNOW, AI AND DATA CENTERS THAT ARE IN DIFFERENT PARTS OF THE STATE, ALL OF THAT IMPACTS THE GRID.
SO THE MORE WAYS WE CAN INCREASE THE RESILIENCY OF OUR GRID, THE BETTER, UM, ON TOP OF JUST THAT GENERAL INVESTMENT.
UM, THE SITE IS SPECIFICALLY IN AN ENTERPRISE ZONE, WHICH IS AN AREA DESIGNATED BY THE STATE TO TRY AND BRING IN INVESTMENT TO THAT AREA.
AND THEN, UH, FINALLY, YOU KNOW, WE WANT TO BE GOOD NEIGHBORS WITH OUR OTHER ECONOMIC DEVELOPMENT PROGRAMS. AND SO FOR THIS PROJECT TO ALSO BE, UH, RECEIVING, UM, ECONOMIC INCENTIVES FROM THE STATE AS WELL AS FROM THE SCHOOL DISTRICT, UM, THAT SHOWS THAT THERE'S COMMUNITY-WIDE SUPPORT FOR THIS ON A LOT OF DIFFERENT LEVELS.
AND SO THAT'S SOMETHING THAT, UM, OUR OFFICE TAKES SERIOUSLY.
SO, LOOKING AT THE SITE A LITTLE BIT MORE SPECIFICALLY, UM, SO THE, AS, UH, TONY MENTIONED, YOU KNOW, THE SITE IS LOCATED IN DISTRICT, I, UH, IT'S NORTHEAST OF SIX 10 AND JUST SOUTH OF HIGHWAY 90, ALONG GREEN BAYOU, UH, GREENS BAYOU GREENWAY, UM, SEVERAL, UM, HED, SORRY, SEVERAL HCA PARCELS OWNED BY ENERGY, FORMED THE PROJECT SITE AND ENERGY PLANS TO CREATE A NEW HCA PARCEL SPECIFIC TO THIS PROJECT.
AND SO THROUGH THAT PROCESS, THE PROPOSED TAX AB ABANDONMENT REINVESTMENT ZONE WILL COMPRISE OF ONLY THIS PROJECT SITE.
SO THAT'S SOMETHING THAT, UM, IS AN ONGOING PROCESS RIGHT NOW.
SO, LOOKING KIND OF MORE AT THE NITTY GRITTY OF THE ABATEMENT ITSELF, UM, BASED ON THE PROJECT TIMELINE, WE'RE ANTICIPATING THAT THE EFFECTIVE DATE OF AN ABATEMENT WOULD BE JANUARY 1ST, 2029.
UM, THEN AS FAR AS THE ELIGIBLE COST OF THE PROJECT, WE'RE LOOKING AT BUILDING IMPROVEMENTS AND MACHINERY EQUIPMENT.
AND SO OUT OF THAT $570 MILLION PROJECT COST, UM, THE MOST IMPACTFUL INTO PROPERTY VALUE INCREASES WE'RE LOOKING AT IS ABOUT $328 MILLION FOR BUILDING IMPROVEMENTS AND $174 MILLION FOR MACHINERY EQUIPMENT.
UM, IT'S A SIGNIFICANT AMOUNT OF INVESTMENT.
SO ACCORDING TO THAT, THEN LOOKING AT OUR, UM, ABATEMENTS, WE'RE PROJECTING AN ESTIMATED ABOUT 1 MILLION, UH, ALMOST 1.1 MILLION, UH, FOR THE FIRST YEAR OF ABATEMENT.
AND THE AVERAGE ANNUAL ABATEMENT WOULD BE ABOUT $1.1 MILLION.
UM, THE FULL ABATEMENT TERM, UM, STATE LAW REQUIRES THAT WE CAN'T GO LONGER THAN 10 YEARS ON AN ABATEMENT.
SO WE'RE LOOKING AT ABOUT $11 MILLION, UM, 11.2, ALMOST $11.3 MILLION OR 10 YEARS, WHICHEVER IS ACHIEVED FIRST.
NOW, BECAUSE THIS IS A UNIQUE PROJECT, UH, THERE ARE SOME VARIANCES THAT COME UP WITH OUR, UH, ECONOMIC DEVELOPMENT ORDINANCE.
SO SECTION 44 1 25 IN OUR ORDINANCE ALLOWS FOR VARIANCES OF, UM, OF REALLY ANYTHING EXCEPT FOR THE DURATION OF THE INCENTIVE.
SO THE FIRST VARIANCE REQUEST THAT'S RELATED TO THIS PROJECT IS THE INELIGIBLE PROPERTY.
SO IN OUR ECONOMIC DEVELOPMENT ABATEMENT, IT'S GENERALLY FOCUSED ON, UH, WHAT'S HAPPENING ON THE SITE AND THE IMPROVEMENTS HAPPENING ON THE SITE BECAUSE THIS IS, UM, IMPROVEMENTS RELATED TO GENERATION TRANSMISSION OF ELECTORAL ENERGY THAT'S NOT CONSUMED BY THE SITE ITSELF.
THE, UH, CURRENT LANGUAGE IN OUR ECONOMIC DEVELOPMENT TAX ABATEMENT, UH, HAS
[00:30:01]
THIS AS AN INELIGIBLE PROPERTY.AND SO THE FIRST REQUEST WOULD BE TO MAKE THIS AN ELIGIBLE COST FOR THIS PROJECT.
SECONDLY, THE OTHER VARIANCE, BECAUSE THIS PROJECT IS LOCATED WITHIN AN ENTERPRISE ZONE, UH, THERE ARE, UM, SOME LOCATION REQUIREMENTS AND SOME, UM, HIRING RESTRICTIONS BASED ON THAT.
AND SO THAT'S UNDER SECTION 44 1 27 H AND SO HERE, BUT THAT SHOULD BE, THEY'RE MEETING THE HIRING, UH, COMPONENT OF IT, OF AT LEAST FIVE JOBS, BUT THEY, YOU JUST HAD, THERE'S SOUND YEAH.
BUT THEY'RE, UH, REQUESTING A VARIANCE, UH, BASED ON THE, UH, THE RESIDENCE OF THE ENTERPRISE ZONE, BECAUSE AS YOU CAN SEE WITH THIS BEING A, UH, POWER GENERATION FACILITY, MOST OF THE ENTERPRISE ZONE DOES NOT HAVE RESIDENCES WITHIN CITY LIMITS.
AND THEN, UM, SECONDLY, ECONOMICALLY DISADVANTAGED AS THE TERM APPLIES BY THE TEXAS ENTERPRISE ZONE ACT.
THE JOBS, THE 14 JOBS CREATED HERE ARE HIGHLY SPECIALIZED FOR, UM, THE FACILITY.
UH, AND SO THAT, UH, THE, BY THE NATURE OF THE WORK, UH, IS UNLIKELY TO FIT THE ECONOMICALLY DISADVANTAGED BASED ON THE TEXAS ENTERPRISE ZONE ACT.
HERE'S OUR PROJECTION ON, UM, THE ABATEMENT BASED ON THE INFORMATION WE HAVE FROM, UM, THE COMPANY AND THE CONSULTANT TEAM.
UM, THIS PROJECTION, AS YOU SEE, IS ABOUT ONE POINT, ALMOST $1.3 MILLION OVER THE 10 YEARS.
UM, THE PROJECTION, UM, IS A MODEL FROM OUR DISH, OUR TRADITIONAL INDUSTRIAL PROJECTS.
HOWEVER, IT'S OUR UNDERSTANDING THAT HCAD EVALUATES ENERGY INFRASTRUCTURE DIFFERENTLY THAN TRADITIONAL INDUSTRIAL IMPROVEMENTS STRUCTURES AND MACHINING EQUIPMENT.
SO OUR OFFICE IS WORKING WITH NRG AND KROLL AND HCA TO FURTHER REFINE THIS PROJECTION TO GIVE YOU, UM, A MORE ACCURATE NUMBER MOVING ON.
UM, ALSO IN PAST TAX ABANDON PROPOSALS, I'VE USUALLY SHARED A PROPOSED COUNCIL ACTION TIMELINE.
UH, DUE TO THE COMPLEXITY OF THIS PROJECT, I'M NOT PROVIDING THE PROPOSED TIMELINE TODAY, BUT OUR OFFICE WILL KEEP YOU ALL INFORMED AS WE CONTINUE TO MOVE THROUGH THAT PROCESS.
SO AT THIS TIME, I'LL TAKE ANY QUESTIONS.
CAN YOU GO OVER THE VARIANCES AGAIN? SURE.
AT THE FIRST ONE,
THE, IN SECTION 44 1 27 D HAS A LIST OF ALL THE TYPES OF PROPERTY THAT HAD RECORDS THAT WOULD BE IN TYPICALLY INELIGIBLE FOR A TAX ABATEMENT THROUGH THE CITY.
AND THAT IS DESIGNED JUST FOR THE ECONOMIC DEVELOPMENT ABATEMENT.
SO WHENEVER THAT WAS CREATED, AT SOME POINT THAT DICHOTOMY WAS CREATED BETWEEN INELIGIBLE AND ELIGIBLE.
SO HERE WE'RE ASKING TO, UM, MAKE ONE OF THOSE, UM, INELIGIBLE COST LINES, INELIGIBLE COSTS JUST FOR THIS PROJECT, AND THE VARIANCE WOULD ONLY APPLY TO THIS PROJECT.
UM, ANY OTHER, UH, PROJECT APPLYING FOR AN ECONOMIC DEVELOPMENT OF BAIN, WE WOULD STILL MEET THE STANDARD REQUIREMENTS FOR SECTION 44, 1 27, UH, E FOR ELIGIBLE AND D FOR INELIGIBLE.
SO WHAT WOULD WE NEED TO CHANGE TO MAKE THIS AN ELIGIBLE COST FOR THE PROJECT IN THE ORDINANCE THAT WOULD APPROVE THE TAX ABATEMENT IN THE TAX AMENDMENT AGREEMENT? UM, THERE WOULD JUST BE A, UM, LANGUAGE IN THAT ORDINANCE SAYING, THIS IS A VARIANCE THAT WE RECOGNIZE AND WE'RE GOING TO APPROVE THAT.
IT WOULD NOT BE A SEPARATE ACTION ON TOP OF THE ORDINANCE APPROVAL.
IT WOULD BE WITHIN THAT ONE ORDINANCE.
AND THEN THE, THE SECOND VARIANCE IS BECAUSE OF THE SPECIALIZATION OF THE ACTUAL 14 JOBS? THAT'S CORRECT.
THE, UM, THE 14, UH, JOBS THAT WOULD BE CREATED UNDER THE PROJECT, ADDITIONAL, ADDITIONAL, THEY'RE, SO THEY'RE NEW JOBS.
UM, THEY ARE RELATED TO THE ONGOING OPERATION AND MAINTENANCE OF THIS ENERGY, UH, PRODUCING FACILITY.
SO THEY'RE HIGHLY SPECIALIZED, UM, THEY PAY VERY WELL.
UH, AND SO BECAUSE OF THE NATURE OF THIS JOB AND THE, THE TECHNICAL REQUIREMENTS NEEDED TO FULFILL THOSE POSITIONS, UH, IT, IT WARRANTS A, A VARIANCE FOR, UM, THE ECONOMICALLY DISADVANTAGED.
SO IS THERE A WAY TO NOT NECESSARILY WAIVE, UM, THE RESIDENCY AND ECONOMICALLY DISADVANTAGED REQUIREMENTS, BUT, UM, TRY TO FIND SOMEBODY IN THE, IN THAT AREA? SURE.
WE, UM, WITH, UH, WITH OUR COMMUNITY BENEFITS PAR PORTIONS OF OUR TAX ABATEMENTS, WE STILL INCLUDE LIKE GOOD FAITH EFFORTS TO HIRE, UM, WITHIN CERTAIN CENSUS TRACKS OR CERTAIN AREAS OF
[00:35:01]
THE PROJECT AND THOSE SORT OF THINGS.SO WE WOULD STILL, UH, PUT THOSE SAME GOOD FAITH LANGUAGE IN THERE.
UH, IT'S MORE SO WE DON'T WANT TO, UM, OPEN OURSELVES UP FOR AN ISSUE OF, IF, IF WE'RE USING A TERM THAT'S DEFINED BY THE TEXAS ENTERPRISE ZONE ACT AND THEN WE APPROVE THIS PROJECT AND IT DOESN'T MEET THAT DEFINITION, WE'RE OPENING OURSELVES UP.
SO WE'RE THE VARIANCE, BUT WE ARE GOING TO USE A GOOD FAITH EFFORT TO TRY TO HIRE SOMEBODY FROM THE, FROM THE AREA.
BUT WE JUST DON'T WANT TO FORCE THEM INTO A POSITION THAT THEY CAN'T ACHIEVE.
UM, I'M TYPICALLY SKEPTICAL OF A LOT OF THESE, AND WE'VE HAD SOME DISCUSSIONS IN THE PAST.
I THINK THIS IS THE BEST ONE Y'ALL BROUGHT FORWARD.
I DON'T THINK IT'S EVEN CLOSE.
UH, THIS DOES A NUMBER OF THINGS.
UH, FIRST OF ALL, IT WILL GENERATE A LOT OF PROPERTY TAX REVENUE, EVEN THOUGH WE'RE GIVEN AWAY CONSIDERABLE PERCENTAGE OF THE INCREMENT FOR THE FIRST 10 YEARS.
UH, THIS PLANT'S GONNA LAST A LONG TIME.
IT'S GONNA GENERATE A LOT OF REVENUE FOR THE CITY.
AND THE REALLY NICE THING ABOUT IT IS IT'S NOT GONNA ADD A LOT OF COST TO THE CITY.
I MEAN, THIS GENERATION PLAN IS NOT GONNA REQUIRE A LOT OF FIRE AND EMS AND POLICE AND THAT TYPE OF STUFF.
SO WE'RE CITY'S GONNA BE GETTING A LOT OF REVENUE WITHOUT A LOT OF EXPENSE.
YOU'VE ALREADY GOT A GENERATING PLANT THERE.
SO, YOU KNOW, ANY ISSUES OF NIMBYISM, I THINK ARE PRETTY MUCH OFF THE BOARD BECAUSE IT'S ALREADY THERE.
UM, YOU KNOW, AND THEN THE TYPE OF POWER THAT YOU'RE ADDING.
UM, IN FACT, UH, I MEAN, THE STATE HAS MADE THIS SUCH A BIG DEAL THAT THEY PUT A TON OF MONEY.
IN FACT, I THINK Y'ALL ARE GETTING, WHAT, 330 MILLION, UH, FOR OF A LOAN FROM THE, THE STATE ON THESE VERY FAVORABLE TERMS, UH, OUT OF THE FUND.
UH, SO, YOU KNOW, THIS IS SO IMPORTANT BECAUSE THE SUN DOESN'T ALWAYS SHINE AND THE WIND DOESN'T ALWAYS BLOW.
UH, SO YOU NEED THIS POWER THERE.
UH, I THINK THIS IS ALSO KIND OF A CAUTIONARY TALE FOR US.
UH, I MEAN, BASICALLY THE PROGRAM, THE STATE PUT INTO EFFECT WAS REQUIRED BECAUSE THE INCENTIVES GIVEN TO WIND AND SOLAR ARE SO GREAT THAT THEY CAN ACTUALLY MAKE A PROFIT WHEN THE WHOLESALE PRICE OF ELECTRICITY GOES DOWN TO ZERO.
AND, AND OBVIOUSLY YOU CAN'T DO THAT.
SO THE, YOU KNOW, THE STATE HAD TO DO THIS.
UH, REALLY GLAD TO SEE Y'ALL ARE STEPPING UP AND DOING THIS.
ALSO, THE ELECTRICAL GENERATION WILL, UH, PROVIDE FURTHER ECONOMIC GROWTH WITH OTHER COMPANIES IN THE FUTURE BECAUSE THE POWER'S AVAILABLE.
SO AGAIN, I, I THINK THIS IS BY FAR THE BEST ONE YOU'VE HAD, AND THANK YOU.
AND, UH, I'LL SECOND WHAT, UH, MY COLLEAGUE SAID ABOUT THAT.
CLEARLY THERE IS A NEED FOR THIS TYPE OF POWER AND, UH, ESPECIALLY IN THE HOUSTON AREA.
I APPRECIATE THE OPPORTUNITY WE HAD TO MEET FRIDAY AFTERNOON AND GET A LOT OF THE QUESTIONS ANSWERED.
AND TO, UH, COUNCIL MEMBER FLICKINGER POINT, THE ABATEMENT WILL LAST 10 YEARS, BUT THIS, THIS PLANT OF THIS KIND, UH, I BELIEVE YOU SAID, COULD LAST 40 OR 50 YEARS, OR MAYBE EVEN LONGER THAN THAT.
AND SO DURING, DURING THE, THE, THE BULK OF THAT PERIOD, UH, THE CITY WOULD BE COLLECTING TAX REVENUE, PROPERTY TAX REVENUE FROM, FROM THE, UM, FROM THE PROPERTY, WHICH CURRENTLY, UH, IS NOT VERY VALUABLE BECAUSE IT'S, IT'S NOT DEVELOPED.
SO I, I DO SEE THIS AS A BENEFIT TO THE CITY.
AND, AND LIKE MY COLLEAGUE, I'M SKEPTICAL OF A LOT OF THESE ABATEMENT, UH, PROPOSALS THAT ARE BROUGHT TO COUNCIL.
I I DO HAVE A QUESTION REGARDING THE VARIANCES REQUESTED AND, AND, AND SPECIFICALLY THE ONE ON SUB SUBSECTION SEVEN.
SO, SO THIS TYPE OF PROJECT IMPROVEMENT FOR THE GENERATION OR TRANSMISSION OF ELECTRICAL ENERGY NOT WHOLLY CONSUMED BY A NEW FACILITY OR EXPANSION IS NOT NORMALLY ALLOWED.
AND I DON'T KNOW IF YOU CAN SPEAK TO ANDREW, WHY THIS TYPE OF PROJECT WOULD NOT NORMALLY BE ALLOWED UNDER THE GUIDELINES.
SO CURRENTLY, UNDER, UNDER THE GUIDELINES BEING A POWER GENERATION FACILITY, THE PURPOSE OF ITS, UM, OF ITS CREATION AND FUNCTION IS TO SEND, UM, THE TRANSMISSION OF ELECTRICAL ENERGY OUTSIDE OF THE FACILITY.
WHERE, SO SAY IF WE HAD A MANUFACTURING FACILITY THAT THEN ADDED, WANTED TO SAY, I DON'T KNOW, LIKE SOLAR PANELS ON TOP OF THEIR BUILDING OR SOMETHING, AND INCLUDE THAT AS PART OF THEIR BUILDING IMPROVEMENTS, IF THAT SOLAR PANEL'S ENERGY WAS ONLY GOING TO STAY ON SITE AND NEVER EVEN CONNECT TO THE GRID, THAT COULD BE AN ELIGIBLE COST.
BUT IF THEY WERE CONNECTING TO THE GRID AND ANY POWER WAS NOT GOING TO BE CONSUMED BY THE COMPANY AND WAS GONNA GO INTO THE GRID, THAT WOULD NOT BE ELIGIBLE.
SO THAT'S, THAT'S WHERE THAT DIFFERENTIATION WOULD APPLY FOR MANUFACTURING.
BUT THEN HERE, THE NATURE OF THIS IS TO, TO BOLSTER THE GRID.
AND RIGHT NOW, WE DON'T HAVE A CLEAN ORDINANCE OR A CLEAN TAX ABATEMENT FOCUSED SPECIFICALLY ON THAT.
[00:40:01]
ECONOMIC DEVELOPMENT, UM, ORDINANCE IS THE BEST FIT, BUT IN ORDER TO STILL FIT IT, WE HAVE TO MAKE SOME VARIANCES.WELL, I THINK CLEARLY, UH, THE ADDITION OF THE, THE POWER GENERATION WOULD BENEFIT THE ENTIRE CITY ECONOMICALLY.
UM, I APPRECIATE YOUR BRIEFING ME ON THIS AND, AND, UH, YOU KNOW, GOT MY QUESTIONS A ANSWERED AND I, I THINK WE'RE IN AGREEMENT THAT WE NEED
IN THE, IN THE STATE, AND THIS WILL BE A STEP IN THE RIGHT DIRECTION.
ANY OTHER QUESTIONS, COLLEAGUES? IF NOT, THANK YOU VERY MUCH FOR THE PRESENTATION.
WE APPRECIATE YOU ALWAYS GIVING SUCH GOOD INFORMATION.
WE DIDN'T HAVE ANYONE THAT SIGNED UP, UM, PRIOR TO THE MEETING TO SPEAK.
IS THERE ANYONE HERE THAT WOULD LIKE TO SPEAK? NO ONE ELSE SIGNED UP.
ALL RIGHT, COLLEAGUES, THEN WE'RE GOING TO GIVE YOU BACK SOME TIME IN YOUR DAY.
UH, BEFORE WE ADJOURN, I'D LIKE TO LET EVERYONE KNOW THAT OUR NEXT SCHEDULED ECONOMIC DEVELOPMENT COMMITTEE MEETING IS MARCH THE 18TH, 2026.
IF YOU'RE INTERESTED IN RECEIVING AN INFORMATION ON THE ECONOMIC DEVELOPMENT COMMITTEE MEETING, CONTACT THE DISTRICT, A OFFICE AT DISTRICT A@HOUSTONTX.GOV, AND THE TIME IS 2 46 AND WE ARE ADJOURNED.