Government bodies in St. John the Baptist Parish are set to miss out on over $200 million in tax revenue as part of a tax-reduction agreement the Port of South Louisiana entered into with a Colorado-based company that’s seeking to construct a grain elevator, according to a recent analysis.
The cooperative endeavor agreement (CEA) that the Port of South Louisiana, a political subdivision, entered into with Greenfield Louisiana, LLC and the parish’s sheriff’s office in April is set to deprive local government bodies — including public schools, courts and the parish council for general government services — of $209 million over the course of 30 years, compared to the property taxes for which the company would otherwise be liable, according to a recent memo authored by Erin Hansen, an analyst for the group Together Louisiana.
Under the agreement — known as a payment in lieu of taxes (PILOT) deal — Greenfield will transfer the land where it intends to build the grain elevator to the port, which is a public agency not subject to property taxes. Instead of paying taxes based on the property’s assessment, Greenfield will send the parish a $4 million one-time payment by the end of this year, followed by $2 million annual payments beginning in 2025 or when the grain elevator goes into operation, whichever comes first.
“It’s very strange, unsettling and possibly more to have the port making decisions about tax revenue that [affect bodies other than] the port,” Hansen told The Lens. “It affects the residents of St. John, it affects the school board, it affects the parish council, it affects the sheriff – and all the constituents of those elected bodies. The port is not an elected body.”
Meanwhile, the port itself is set to collect nearly $7 million in administrative fees as part of the agreement.
During the length of the lease, the St. John Parish school board could miss out on more than $52 million in revenue, Together Louisiana found. The parish government and the parish’s law enforcement bodies would miss out on $85 million and $64 million, respectively, according to the analysis. The parish’s school district is ranked in the state’s bottom third, with one school registering an “F” grade in 2019.
Greenfield bought the tract of land in Wallace last year for $40 million and plans to build an enormous grain elevator on the property, worth more than $400 million.* The project would include 54 grain silos, a conveyor belt, railroad infrastructure, and a dock on the Mississippi River.
The Descendants Project, a local nonprofit opposed to the proposed site, sued the parish – located in the so-called Chemical Corridor along the Mississippi River between Baton Rouge and New Orleans — in November in order to nullify the zoning ordinance upon which the construction would rely.
The Descendants Project, led by twin sisters Jo and Joy Banner, is opposed to the project based on the health and environmental hazards they say it poses to the community, along with the irreparable damage it’s likely to inflict on the unmarked graves of their ancestors, they’ve argued in the lawsuit. The Army Corps of Engineers has yet to issue a permit for the project, although Greenfield has commenced with pile-driving and other work on the site in the interim.
“Not only does the project have a cost to our health, a cost to our emotions, but it’s also a cost in a monetary sense,” Jo Banner told The Lens, referring to the Together Louisiana analysis.
Greenfield, for its part, touted the economic benefits the project could bring to the region.
“The new grain terminal means more jobs, more economic activity and millions more in tax revenue for the parish and state,” Cal Williams, chief operating officer at Greenfield Louisiana said in a statement provided to The Lens.
“Its positive impact on tax revenue will be far greater than this group claims,” he said, pointing to a recent study produced by the economic development agency Greater New Orleans, Inc., which found that the grain elevator would produce, among other things, 100 direct jobs on the Greenfield site along with $8.4 million in annual local and state tax revenue once it’s in operation.
The report does not mention the CEA and does not say whether the added tax revenues would be generated from property taxes, which go to local governments, sales taxes, which are split between local governments and the state, or both. And the data cited in the report are not industry-specific and do not consider specific tax rates and incentives.
The port cited the same figures included in the Greater New Orleans report when reached for comment.
“The economic impact and taxes that will be generated from this project cannot be understated and they will have a huge impact in St. John Parish, especially within the West Bank which has historically been underdeveloped and is home to very few jobs,” Micah Cormier, spokesman for the port, told The Lens.
‘I am not comfortable’
For his part, Lucien Gauff, the St. John the Baptist Parish assessor, told The Lens that the grain terminal would stimulate the local economy and be a net-positive for the community, but the port could have gotten more out of the deal, namely an extra million dollars each year.
“I don’t want to handcuff anybody – after 10 years down the line, when someone comes into office and says, ‘Wow, who did that deal? Who allowed this?’” Gauff said. “And the way inflation is, and as we could perceive it to be, I just thought the deal could have been better by another million dollars a year, for each year,” he said, adding that the overall impact the project will have on the community would still be a net positive.
Still, it would have been nice for the local taxing authorities, whose jobs it is to weigh the benefits and drawbacks in a given tax abatement program, to have been included in the process before the port voted to approve the CEA, Hansen said. It appears they were not.
That was a point of contention Port Commissioner Joey Murray raised during an April 6 meeting before the CEA vote took place.
“I am not comfortable,” Murray said. “How is it that there is no communication in writing to any of the taxing bodies? How is that there are no communications and there are no responses?
“How is it we are sitting blindly looking at a [PILOT] that has been written and put in terms that have not been negotiated? There have not been any meetings between these bodies. There is not anything that [shows] us that they are accepting this,” he said.
The amount of money the CEA leaves on the table and the length of the agreements are also concerns, Murray said.
“I think we are giving away the farm, the cow, the farmer’s wife, the daughter,” he said. Murray was the only commissioner to vote against the CEA.
Louisiana offers a number of incentives to attract businesses to operate the state, including the Industrial Ad Valorem Tax Exemption Program, or ITEP. The ITEP program, by far the state’s largest tax abatement program, lasts for, at most, 10 years per project.
“Ten years I would vote right now,” Murray said during the meeting. “But I cannot support this 30 year at this number. I can support 30 years very grudgingly at three million dollars.”
But Paul Matthews, CEO of the port, said during the April 6 meeting that it’s not the port’s role to advocate on behalf of the local governmental bodies.
“It is the opinion of myself and staff that it is not our responsibility to negotiate the [PILOT] on behalf of the taxing bodies,” Matthews said. “If that were the case then there would be no need for taxing bodies to [negotiate] their taxes. Our role here as the Port is to move the project forward.”
For the port, the calculus makes sense, Hansen said – they earn money by acting as a stand-in, while St. John Sheriff Mike Tregre — an elected official and, as the parish tax collector, a necessary party to the deal — collects and distributes Greenfield’s payments. Whether the community benefits from their decision, however, is a separate matter, she said.
“There’s a reason we don’t give unelected, unaffiliated boards and commissions the authority to make decisions like this, because they’re giving away money that’s not really theirs to give.”
*Correction: An earlier version of this article misstated the estimated cost of the project. (Aug. 12, 2022)