Item Coversheet

CITY OF HOUSTON - CITY COUNCIL

Meeting Date: 2/2/2021
District G
Item Creation Date:

MYR - TEZ Transocean Offshore Deepwater

Agenda Item#: 9.


 
                               
Summary:

RESOLUTION approving and authorizing the nomination of TRANSOCEAN OFFSHORE DEEPWATER DRILLING INC, located at 1414 Enclave Parkway, Houston, Texas, to the Texas Economic Development Bank established by the Texas Economic Development and Tourism Office within the Office of the Governor for designation as an Enterprise Project - DISTRICT G - TRAVIS

Background:

The Texas Enterprise Zone Program is an economic development tool for local communities to partner with the State of Texas to promote job creation and capital investment. A State Enterprise Zone is any census tract block group that has a 20% or higher poverty rate, as determined by the U.S. Census Bureau during each decennial census.

State law requires a municipality or county to nominate a project of a qualified business for designation as an Enterprise Project to participate in the Enterprise Zone Program. Legislation limits allocations to the state and local communities per biennium; the City is limited to a maximum of 9 project designations. Chapter 2303 of the Texas Government Code grants municipalities the authority to nominate projects located within their extraterritorial jurisdiction (ETJ).

Enterprise Projects are eligible to apply for state sales and use tax refunds on qualified expenditures. The level and amount of a refund is based on the capital investment and jobs created or retained at the qualified business site. Depending on the investment amount, there is a refund to the company of $2,500 and up to $7,500 per job.

City Council adopted an ordinance authorizing the City to nominate projects for this state-funded incentive. This project was presented to the Economic Development committee on January 25, 2021. The City is nominating Transocean Offshore Deepwater Drilling Inc. as its sixth TEZ project in the FY20 – FY21 biennium with a planned capital investment of $50 million, retention of 426 jobs, and creation of 10 jobs. The amount of the investment for this project will produce a maximum reimbursement of $2,500 for up to 500 jobs or $1,250,000 over a five-year term, at an annual rate not to exceed $250,000. The project site is not located within a Texas Enterprise Zone and therefore 35% of new jobs must be filled by residents of an enterprise zone or individuals who are economically disadvantaged.

Transocean is a leading international provider of offshore contract drilling services for oil and gas wells. The company specializes in technically demanding sectors of the global offshore drilling business with a focus on deep-water and harsh environment drilling services. Transocean plans to incur $50M over the next 5 years to update technology and software required to improve efficiencies and reduce cost relating to the transportation of rigs to platforms.

 

________________________________________________

Andrew F. Icken, Chief Development Officer

Prior Council Action:
Ordinance 2015 – 0515, June 3, 2015
Amount and Source of Funding:
No City funding required
Contact Information:

___Gwendolyn F. Tillotson

Phone:  (832) 393-0937

ATTACHMENTS:
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CoversheetSigned Cover sheet