The Orange City Council Tuesday unanimously approved the requested annexation of the International Paper containerboard mill. The company asked for the annexation as part of negotiations with the city on a new industrial district contract.
City Manager Dr. Shawn Oubre said the economic development agreement has the city waiving its 1.5 percent sales tax on items sold by International Paper. That will save the company almost $400,000 a year. It is the same amount of sales tax that the Orange County Emergency Services District No. 3 started charging the plant five years ago.
Oubre told the council the removal of the sales tax will make the plant more of a global competitor because of the relief of a burden. International Paper will now be paying the same as “basically before the emergency services district levied the sales tax,” he said.
The emergency services district has the Little Cypress Fire and Rescue Department. During public hearings on the annexation, board members of the district pleaded with the city not to annex the paper mill. They said they would have to revert back to a volunteer fire department and not have professional firefighters on duty 24 hours a day. No one spoke Tuesday about the annexation.
Oubre said the city will continue getting a negotiated payment similar to the industrial district payment the city has had with the mill for nearly 50 years. The company will pay a 2.5 percent increase each year. The city has provided fire and police protection to the plant since the first industrial contract in 1968, he said.
The vote was on the first reading and must be approved a second time before it becomes official.
Also Tuesday, the council approved a resolution to make DuPont Sabine River Works as a Texas Enterprise Zone. The resolution will help the company get state economic development incentives for a $50 million investment to upgrade the plant during the next five years.
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