Cameron County delays vote on Saronic shipyard tax break deal — again. Here’s why

Cameron County leaders delayed a vote on whether to approve an economic incentive deal for a company promising to bring 10,000 jobs and $3.2 billion in investment to the Port of Brownsville on Tuesday. 

That’s the second time a vote on the deal has been delayed in the past three months for a project in which Texas is competing against alternative sites in California and Virginia.  

After several hours of public testimony, both in favor and against the project by Austin-based Saronic Technologies, county commissioners unanimously decided to table the agenda item until at least the next meeting on June 16. 

The deal on the agenda offered Saronic a 95% property tax abatement on its estimated $2.7 billion property tax value over four phases of development, stretching beyond the typical 10-year mark to 19 years, ending in 2048. The value of the property tax break is estimated to be at least $100 million. 

Saronic plans to build a next-generation shipyard to manufacture autonomous vessels for the U.S. Navy for wartime operations and commercial customers. 

Cameron County Judge Eddie Treviño Jr. previously called the project a “win-win” for the community. 

During the meeting, Treviño Jr. asked Saronic officials about the project’s environmental impact and scope, and publicly lamented that the county was potentially giving away too much money in the property-tax-break deal to secure high-paying jobs, even though the undeveloped land isn’t generating much revenue at all. 

“Saronic is asking the people of Cameron County to support a 95% tax [break], and I don’t know quite at the moment what the lease rate is [at the Port of Brownsville] and how that compares to other tenants at the port. The other part of the equation that nobody’s discussed is exactly what the other tax abatements are,” Treviño Jr. said during the meeting. “I understand that this is not an easy decision. I don’t like 95%, I think it’s a lot, but I also know that if they don’t come here, we’re not getting anything — zero.” 

Saronic declined to share the Port of Brownsville’s lease rate during the public meeting. 

Treviño Jr. previously voted in favor of property tax deals for wind turbine farms, SpaceX, and LNG export terminals, but has said he would deny a similar deal for a proposed oil refinery at the port. But it’s unclear whether he’ll still be county judge when the economic incentive for the oil refinery is up for debate. 

Steve Guerra, former chairman of the Brownsville Navigation District, won the primary election against Treviño Jr. in a runoff in late May, which prevents Treviño from running for the post in November’s general election. 

Company officials told county commissioners on Tuesday that their decision to invest in the Port of Brownsville — a deal that would develop 4,300 acres at the port — is contingent on an agreement for a property tax break. 

Company executives said they are committed to environmental stewardship by intentionally avoiding wetlands and choosing an old dredge site, and expect some impact from cutting metal and using spray paint, but don’t expect air or water quality issues. 

Its operation in Louisiana secured a 100% tax break for 25 years, and the company now has more than 350 workers there, with plans to increase to 700 employees. 

“I think we’re providing technology that actually enhances [emissions and safety] standards and creates a safer maritime industry for the world,” Doug Lambert, chief operating officer of Saronic, told county officials. 

Lambert said the Valley was a good fit for the company’s needed workforce. 

“The Rio Grande Valley provides some of the best tradespeople in the country, and that’s incredible and something that we would like to be a part of,” he said. 

In exchange for incentives, Saronic outlined the types of jobs it would create, from welders to administrators, with a minimum wage of $25 an hour and an average closer to $36 an hour. 

The median household income in Cameron County is about $24 an hour, according to the Workforce Solutions office. That could account for two adults working $12-an-hour jobs each, or one earning a minimum wage of $7.25 and the other working closer to $17 an hour. 

Saronic promised that 35% of its workforce would be Cameron County residents, and it would participate in job fairs and educational training. 

Saronic already secured property tax breaks from the Point Isabel School District — a board that voted against incentive deals for other projects, including an LNG export terminal. 

On Tuesday, Point Isabel School District officials, including a board member and the superintendent, testified in favor of the Saronic project. 

“For years, our students had to leave to get educated because the Valley did not have numerous opportunities for them. And we know what happens when they leave. Many of them do not come back, but you know what? The educational landscape has changed. Our community colleges have now added the trades…and are now working with industry to make sure that there is alignment,” Point Isabel ISD Superintendent Teri Capistran said Tuesday. 

In the school district, about 85% of students are economically disadvantaged compared to the Texas average of 63%, she said. And now the job market is changing, just like the education system did, she said. 

“It is our moral obligation to do anything and everything that we can, but we can’t just educate them if there are no jobs available for them,” Capistran said. 

Brownsville Mayor John Cowen, the Brownsville Economic Development Corporation (EDC), Los Fresnos EDC, and Harlingen EDC executives all spoke in favor of the potential deal, which could not only create thousands of jobs but also build out a supply chain and support local small businesses across the Rio Grande Valley. 

“This is a project that’s considered a regional economic engine. A project of this scope, size, scale, and magnitude does not operate in isolation, which means that a project like this will create an ecosystem around it,” Greater Brownsville EDC CEO Gilberto Salinas said. “We have huge momentum right now, which is helping us attract additional companies, suppliers, skilled workers, and the related industry, which continues to grow.” 

Brownsville EDC estimates that the Saronic Technologies shipyard could generate an economic impact of $4.9 billion, 20,000 jobs when indirect jobs are included, and $1.4 billion in annual wages for 10,000 workers, thereby increasing the community’s total gross domestic product. 

“This increase in GDP will ultimately result in the creation of generational wealth,” Salinas said. 

Environmental activists concerned about potential pollution, habitat destruction, and water scarcity at the port voiced opposition to the deal. Activists argue that the shipyard jobs are not good for the community because they contribute to warfare, and that the vessels rely on artificial intelligence data centers to operate autonomously. 

Brownsville native and now law student Alejandra de Maar told Cameron County commissioners that she hopes to return to the Valley after college to work in the region. 

“I hope it’s obvious how unfair it would be for one of the poorest regions to give a multi-billion dollar company a free pass to avoid paying taxes for [nearly] 20 years, stiffing the community it plans to depend on for labor out of millions of dollars of tax revenue that could go towards education and healthcare,” Maar said. “Cameron County is just not a manufacturing or engineering hub. Despite what Saronic representatives claim about building the workforce from the ground up, it will be years before the students they claim they will train will enter the workforce.” 

Cameron County Commissioner Sofia Benavides said she was criticized for supporting other tax break deals for SpaceX and LNG, and that the shipyard is yet another tough decision. Benavides pushed to table the agenda item since Commissioner Joey Lopez was attending the meeting remotely and Commissioner David A. Garza was absent. 

“It’s not an easy decision. But I have always believed that we have a responsibility to ensure that our communities grow,” Benavides said. “Whether you all want to recognize it or not, people have [these types of jobs] now. People that have to leave here and go work in the same industries and leave their families behind. I am in favor of this, but I still believe that all five of us should be here to make the ultimate decision.” 

Commissioner Lopez said he needed more time to decide, but generally supports economic development. 

Commissioner Gus Ruiz is a U.S. military veteran who served during the Iraq War but has since decided to oppose the wars in Iraq and Iran.

“As a student, I even protested the war in Iraq, but as a U.S. Marine, I took an oath, and we deployed,” he said. 

Ruiz refuted activists’ claims that the property tax break deal, under which a shipyard producing vessels for the defense industry was operating, was promoting war. 

“I understand that during peacetime or wartime, it’s important to have a strong national defense,” he said.