Almost a year’s worth of negotiations and behind-the-scenes work came to fruition Thursday morning with two brief votes by the City Council that will cement Brownfield’s long relationship with oilfield services giant Halliburton for many years to come.
With a unanimous vote, the council approved an economic development agreement to aid the “multi-year, multi-million dollar expansion plan and job creation” by Halliburton.
The project requires the construction of municipal water and sanitary sewer lines by the city to a 100 acre tract of land just north of the city limits in Hogue Industrial Park. The city anticipates installation of the infrastructure to cost $1.5 million.
In return, Halliburton agrees in the contract to invest at least $40 million in the Brownfield location, including improvements to the tract, machinery and equipment and hire a minimum of 65 additional employees, however it is anticipated that those numbers will be exceeded before the five-year agreement expires.
One facet of the contract stipulates that Halliburton “shall make reasonable efforts to recruit residents of the City of Brownfield area as employees.”
No start date has been announced for the project, however the contract states that the five-year agreement “shall be completed by March 31, 2019, indicating it would begin by March of next year.
Brownfield Mayor Bob Simpson told the Brownfield News following the council session that although today’s votes passed with little discussion, they are the result of many hours of diligence and hard work on the part of city administrators and council members.
“Over the past months, we have had numerous work sessions dealing with this important project and spent countless hours on it,” he said. “The contract that was approved today was sent back and forth probably eight times to make adjustments and refinements, but the end result is a document that both parties are pleased with.”
Simpson said the contract provides incentives to Halliburton, while also protecting the citizens of Brownfield and their tax monies.
He said City Manager Eldon Jobe and Economic Development Director David Partlow both performed their duties during the process.
“Eldon did his job of protecting our tax payers and David did a tremendous job of keeping things on track and maintaining the lines of communication throughout the entire process,” he said.
Simpson declined to offer specifics on the Halliburton project, citing confidentiality agreements between the oilfield company and everyone involved at the city level.
In a related matter, the council also gave unanimous consent to an Industrial District Agreement with Halliburton.
The agreement gives the company the advantages of annexation and generates revenue for the city without undergoing the sometimes contentious process of annexation beyond the city limits.
As many as 10 property owners lie between the current city limits and Hogue Industrial Park.
If any one of them were to protest an attempt at annexation, the legal proceedings could delay the process for as much as three years.
“That’s not a risk we were willing to take while we were negotiating to get Halliburton to stay in Brownfield and expand in the Hogue park,” Simpson said.
Under the agreement, the city will provide municipal services such as utilities, police, fire and ambulance protection in exchange for a pre-determined fee in leu of taxes.
The eight-year agreement will have the oilfield services giant paying a fee equal to 50 percent of the assessed property value in the first year, increasing to 95 percent in year eight.
There after payments will be at 100 percent of the assessed property value unless renegotiated and agreed to by both parties.
Assessments will be made each year using the city’s tax rate as set by the council and using valuations from the Terry County Tax Appraisal District.
The industrial district contract or possible annexation of the land will be revisited prior to its expiration at the close of 2022.
The Mayor reiterated that working with Halliburton through the contract negotiations was a pleasant process.
“They were very easy to work with and we appreciate the relationships that we have forged” he said. “It was a good negotiation. They gave a little and got a little and we did the same, which is how it should go. I look forward to working with them for many years to come. I can say without reservation that the future of Brownfield is bright and I feel like this is the beginning of a real transition for our community.”