PRESENTER: Presenter
Jeff Jewell, Economic and Community Development Director
Body
SUBJECT: Title
Approval of the second amendment between the City of New Braunfels and CEMEX Construction Materials South, LLC, a Delaware limited liability company, and CEMEX Construction Materials Pacific, LLC, a Delaware limited liability company to include additional properties in the Industrial District Agreement.
Header
DEPARTMENT: Economic and Community Development
Body
COUNCIL DISTRICTS IMPACTED: N/A
BACKGROUND INFORMATION:
This action would add five (5) properties (approximately 140 acres) into the Industrial District Agreement (IDA) between the City and Cemex and extend the original agreement by 15 years from the effective date. Industrial District Agreements are authorized by Texas Local Government Code wherein a city contractually agrees with a landowner not to annex property in the City’s extraterritorial jurisdiction (ETJ). Cities can require contractual payments - Payments in Lieu of Taxes (PILOTs) - that function like property taxes even though the property is outside City limits.
Cemex is a global building material company that produces, distributes and sells cement, ready-mix concrete, aggregates and related building materials. The Company operates an aggregate and concrete plant on approximately 4,000 acres in the City’s extra-territorial jurisdiction (ETJ) and employed approximately 150 people in 2023. The property and net taxable improvements are valued at approximately $461.7 million. The IDA, which was renewed for a 15-year period in 2020, guarantees the continuation of the extraterritorial status and precludes the City from annexing the facilities and Cemex-owned properties for that time. In exchange, Cemex will make an annual cash payment based on a formula that is the product of the City adopted total ad valorem tax rate at the time the payment is due multiplied by the certified taxable value (net of non-taxable pollution control devices) of Cemex’s land facilities multiplied by the applicable IDA percent, which is 82.5% through the end of the term. The City is not obligated to provide any municipal services to Cemex except as required under the scope of the Interlocal Agreement between the City and Comal County for the City’s provision of certain fire suppression, EMS and hazmat services to the Emergency Services District (“ESD”) No. 7, at no additional cost to CEMEX beyond its current annual payment to the ESD No.7.
The proposed amendment would include properties Cemex has purchased near its existing facility since 2020. It is requesting the City consider the recently acquired parcels as part of the original and amended IDA. The Amendment has certain provisions that include:
1. Explicitly excludes the properties from receiving emergency response to structural fires or emergency medical services until such time that Cemex begins operations on the facilities; and
2. An extension of immunity from annexation for an additional fifteen years for a total of twenty-six years from the effective date of the original agreement in February 2015.
ISSUE:
Consideration of inclusion of additional properties into the non-annexation and PILOT payment by Cemex to the City of New Braunfels.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☐Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
In 2025, Cemex remitted approximately $1.557 million in PILOT payment to the City.
The 2025 appraised value of the five tracts is $875,315, which will generate an approximate PILOT payment increase of $2,952 annually.
Recommendation
RECOMMENDATION:
Staff recommends approval of the Second Amendment.