Halliburton gets a new deal
After threat to move, city again acts to keep company here
Halliburton Co. threatened to move its Eagle Ford Shale operation from the San Antonio area because the company said it was being taxed unfairly.
But a new agreement between the city and company officials could keep the operation here.
Under a complex deal struck in 2016, the Houston-based oil-field services giant avoided city annexation on its 150-acre property in southeastern Bexar County but agreed to pay the city for fire services.
But Halliburton wound up paying twice for fire protection when an overlapping jurisdiction that oversees emergency services in unincorporated Bexar County passed its own sales tax.
City Council members will vote on a proposal Thursday to annex the Halliburton property and rebate a portion of its property taxes to keep the company’s Eagle Ford operation here.
Halliburton won’t be required to add jobs under the proposal, said Rene Dominguez, the city’s economic development director.
Dominguez said the deal was necessary to keep Halliburton’s $270 million in assets — including land and mobile equipment referred to as “rolling stock” — in San Antonio.
“The idea of them actually moving those was a legitimate threat,” Dominguez said. “They certainly had the ability and still have the ability to move that rolling
stock to another part of Texas.”
The company, however, downplayed the possibility of moving the operation.
Halliburton “has a longterm presence in San Antonio and is heavily invested in the area in both our operations and our employees who live and work in the region,” company spokeswoman Emily Nir said in an email. “Our goal is to ensure that we operate in the most economically viable way which includes working with the city of San Antonio on local tax requirements.”
Halliburton opened the center in 2013 on Loop 1604 just west of Interstate 37 on the South Side. In January 2014, the Houston company’s site became part of a limited-purpose annexation area that encompasses 4 square miles of southeastern Bexar County.
Limited-purpose annexation
gives cities three years to decide whether they want to annex an area. Meanwhile, residents of the area may vote in City Council elections but don’t pay city taxes. Developers also must abide by certain city land-use regulations.
City officials warned that annexing Halliburton could spur the company to relocate its Eagle Ford operations, according to a 2016 agenda memo.
Amid the oil crash beginning in 2014, the city agreed in 2016 to remove Halliburton’s property from the annexation area and not to annex the site for 10 years in order to keep the company’s Eagle Ford Shale operations here. In exchange, Halliburton promised to:
• Keep 500 full-time jobs assigned to the San Antonio site.
• Pay all employees at the site at least $24,876.80 annually, the area’s living
wage in 2016 — and 70 percent of those employees at least $47,400.
• Pay $1.5 million annually to the city it would have paid in sales and use and property taxes.
• Pay $2 million toward community workforce development efforts.
• Pay the city $40,000 annually for fire service protection.
Shortly after that agreement was struck, Bexar County Emergency Service District 6 commissioners passed a 1.5 percent sales and use tax that went into effect in October 2017 — which, coupled with its annual $1.5 million payment to the city, Halliburton considered double taxation.
Halliburton told city officials last year it would consider moving its Eagle Ford Shale operations from the San Antonio area unless the issue was resolved, Dominguez said. Halliburton also
has offices in Alice and Corpus Christi.
“They were definitely looking at the viability of staying where they are currently located,” Dominguez said.
Under the proposed arrangement, the city would annex Halliburton’s property in a process initiated and paid for by the Houston company. The city would rebate 62 percent of the company’s property taxes for eight years — valued at $7.4 million.
The city would receive about $5 million annually in property and sales and use tax revenue in that period, Dominguez said.
Halliburton would not have to increase the number of workers based at the operations center, but would have to pay all workers at least $25,750, the city’s current living wage.