The Louisiana Bond Commission voted last week to issue ExxonMobil Corporation $12 million more in tax-free, low-interest bonds to finance an upgrade of the petro giant's Baton Rouge facility.
The $12 million approved Thursday comes on top of $300 million in Gulf Opportunity Zone bonds issued for the refinery in August. The company had requested $200 million.
The $312 million tax-free loan will create four permanent jobs and help retain 17 existing jobs, according to analysis submitted to the commission by attorneys for the corporation.
The tax-free government loan program, created in the wake of hurricanes Katrina and Rita, was intended to spur recovery in areas struggling to attract the investment needed to rebound from the storms. Though the state has to grant access to its specially issued borrowing power, taxpayers are in no way responsible for the loan if ExxonMobil does not make the necessary repayments.
Five years after the GO Zone bonds were created, and as the program approaches a Dec. 31, 2010 expiration date, the vast majority of the program's money has flowed to businesses far from Katrina-devastated New Orleans. As of last week, the state had issued $6.1 billion and set aside another $1.6 billion for approved projects, leaving only $36.5 million still to be allocated. But of the $7.7 billion issued or approved, only $90 million -- 1.1 percent of the total -- went to New Orleans projects, according to the Industrial Development Board of the City of New Orleans, which is responsible for submitting bond applications to the state.
At least $2 billion went to oil and gas industry projects, according to available documents. (The number may increase when The Lens receives documentation it has requested showing all bonds issued or approved to date.)
In October, Bond Commission officials estimated that $700 million in projects were competing for the remaining bonds. The development board is not aware of any projects in the running that are in New Orleans, and none of the bonds so far issued for New Orleans projects went to development in hard-hit and still-struggling areas like the Lower 9th Ward or eastern New Orleans.
The analysis received by bond commission members in advance of last week's vote on the latest ExxonMobil bond appropriation said construction of the refinery would generate 2,904 temporary jobs, in addition to the 4 permanent jobs.
In 2009, the Texas-based oil company earned $442.85 billion in revenue, up almost 19 percent from 2007. The company also took in the biggest annual profit of any Fortune 500 company, earning $45.2 billion, according to the Associated Press.
The Lens is a nonprofit investigative journalism website based in New Orleans. To learn more about it, click here.