POTTER TWP. -- The Keystone Opportunity Expansion Zone on the site of Shell Oil Co.’s proposed $2.5 billion petrochemical plant is now a reality for western Pennsylvania.
The Potter Township Supervisors passed two ordinances regarding the KOEZ Wednesday, the final piece of the KOEZ puzzle.
Both Central Valley School District and the Beaver County Commissioners already approved the KOEZ. The state issued its approval last year after Shell expressed interest in the site, the current home of the Horsehead Corp. zinc smelter.
While the KOEZ doesn’t mean Shell is definitely moving in, it's certainly another step in the right direction, officials said.
“What you may have witnessed tonight is a very historic event -- the approval of the KOEZ is something that is critical to the process Shell is working through,” Beaver County Commissioner Dennis Nichols said. “This doesn’t guarantee that Shell will build (the cracker plant) here, but I can tell you that if this hadn’t occurred tonight, they may well not have.”
Granted to any company that makes a capital investment of at least $1 billion and creates 400 permanent full-time jobs, the KOEZ would exempt Shell from property taxes, while net profits, earned income, business privilege and mercantile taxes would be abated. The KOEZ has also been extended to a duration of 22 years.
The supervisors also approved a PILOT agreement with Shell, which means that in lieu of taxes, Shell would pay 110 percent of what Horsehead would owe to the taxing bodies in real estate taxes. Through PILOT, Shell would pay this amount each year from when it actually occupied the property through the duration of the KOEZ.
But officials also said not all taxes would be exempted. If Shell does move in, it would still have to pay local services taxes, said Rebecca Matsco, Potter Township supervisor.
“That was actually very important to us that it will not be an exemption,” she said. “It will represent a considerable amount of income for us,” she said. This particular tax, bolstered by the project's expected 7,000 temporary workforce, would benefit both the township and the school district, she said.
It's another milestone in what has been a rocky road. In June, Shell signed another six-month extension with Horsehead, its second. The original decision deadline was Dec. 31, 2012, but Shell asked for its first extension just days before that.
Potter Township solicitor Mike Jones said Wednesday he expects Shell to make a decision at the beginning of 2014.
"What happened here tonight was critical to making that final decision," he said.
But others say the approval of the KOEZ is a good sign regardless of Shell's decision.
“Whether Shell comes here or not, there are good times ahead for Beaver County,” Nichols said.