City Council nominates Nexolon America as State Enterprise Project

The San Antonio City Council voted Thursday to nominate Nexolon America’s solar manufacturing plant for designation as a State Enterprise Project.

Nexolon must still compete against other businesses statewide, but if approved, would join other local powerhouse job-creators like Valero, Tesoro, Rackspace and NuStar Energy, which have already been designated State Enterprise Projects.

Designation as a State Enterprise Project translates into a potential refund for some state sales and use taxes for up to five years, based on the number of jobs created or retained in economically-distressed areas.

The program, run out of the Texas Governor’s office, is part of the larger Texas Enterprise Fund, which has helped make Texas the number one state in attracting new business.

It allows cities and communities to nominate companies for the designation “to offer a package of local and state tax and regulatory benefits to assist businesses seeking to locate, expand or retain jobs in economically distressed areas,” according to the City of San Antonio’s website.

Nexolon America was nominated by the city based on its $121 million investment in a solar component manufacturing plant currently under construction at Brooks City Base, which is already designated as a state enterprise zone. The plant will employ 400 people.

The development of Brooks City Base has been key in the city’s economic development efforts, specifically in the growth of the south side of the city, said Mario Hernandez, president of the San Antonio Economic Development Foundation.

“We see the continuing development of Brooks City Base bringing more businesses, jobs and affordable housing to our city,” said Hernandez.

Considered an anchor and catalyst tenant, Nexolon America leases 87 acres at the the former Air Force base, which is being transformed into a thriving mixed-use community in the south east quadrant of the city.

“Brooks City-Base has served as a catalyst for jobs and positive development on the south side,” said Brooks City-Base President and CEO Leo Gomez. “We are thrilled at the opportunities that Nexolon America brings, with its 400-person workforce, making an average annual salary of $44,000.”

The value added to the community is particularly great for the students at the Brooks Academy of Science and Engineering, a top-performing charter school, Gomez said.

“Solar energy is the cornerstone of the new energy economy and by bringing this type of facility to the south side, we’re not just bringing jobs, we’re bringing education and exposure which is really invaluable.”

To receive the tax refund, Nexolon America must commit that at least 100 people it hires will either be low income residents, or live in the enterprise zone.

The state has a maximum of 105 project designations that can be awarded each biennium, of which the city of San Antonio is allowed nine nominations. If Nexolon America is designated, the city will still receive its portion of the sales and use taxes collected from Nexolon America.

Nexolon America is a consortium partner of OCI Solar Power in its deal to build 400 MW of solar farms and sell that power to CPS Energy.

OCI Solar Power recently acquired a 57 percent stake in Nexolon America, ensuring the company will have the financial backing necessary to continue meeting its milestones under the CPS Energy contract.

CPS Energy only pays for the power that is produced under the contract. There is no risk to CPS Energy customers if OCI Solar Power and its partners do not deliver.

To date, OCI Solar Power and its partners have met every milestone, and CPS Energy remains bullish on the project.

The strong financial position of OCI Solar Power’s parent company, OCI Co., a large South Korean chemical company, factored greatly into CPS Energy’s reasons for awarding OCI Solar Power a 25-year contract to buy the output of 400 MW of solar farms it will build.

OCI “is a multi-billion dollar company,” said Fatima Toor of Lux Research. “It’s strong financial footing will ensure the survival of Nexolon America. It’s a good strategic move.”

Tracy Idell Hamilton

Tracy Idell Hamilton was part of the Corporate Communications team at CPS Energy.

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