With tax breaks, a new plant may locate on Industrial Canal. It will make oil out of Pongamia beans.

The New Orleans City Council is poised to approve more than $1 million in property tax breaks to a California-based company planning a processing plant for a type of bean-based oil along the Industrial Canal.

A council committee on Tuesday enthusiastically endorsed Terviva Industries’ application for the Industrial Tax Exemption Program, with At-Large Council member Helena Moreno noting that it met all of the council’s criteria for granting the sometimes-controversial incentives.

Terviva, which bills itself as a “food and ag innovation company,” wants to invest $25 million in machinery, equipment and other improvements on Port of New Orleans property along France Road. The resulting processing plant, which will create a product akin to vegetable oil, would be home to a dozen full-time employees with average salaries of $117,000, according to the application.

Terviva has pioneered the production of plant-based food products from Pongamia tree beans, which are native to Asia and Australia. The company has also set up Pongamia fields in Florida and Hawaii. Pongamia trees are considered climate resistant, and a potential alternative for vulnerable staples like Florida’s citrus groves. 

The tax exemptions on capital investments would be considered for renewal every five years, and are potentially worth up to $4.7 million over two decades.

Other incentives

The company is apparently also seeking Enterprise Zone incentives through the state, according to the city’s Office of Economic Development report, but an LED spokesperson said the state had received the application.  

The project is only expected to generate new tax revenue worth about half of the value of the incentives, according to Louisiana Economic Development officials, but the council’s criteria is focused on job creation and development in distressed areas.

Those requirements are “meant to ensure that, at a time when the city has great need, we are responsible and thoughtful when it comes to tax giveaways,” Moreno said Tuesday.

Council President JP Morrell and District D Council member Eugene Green joined Moreno in the 3-0 committee vote. The full council is expected to weigh the exemptions on Feb. 16.

Council approval for the industrial tax exemptions is a requirement of Gov. John Bel Edwards’ 2016 executive order setting up new rules for the program, in part to address complaints that the state for years had doled out what amounted to local tax breaks without the consent of parish and city governing authorities.

The Orleans Parish school board also has the right to weigh in under the new rules. As with other governing bodies, the board’s approval is automatic if it does not act within 60 days of the state’s approval, which came on Jan. 26. 

Morrell noted Tuesday that the next governor could quickly rescind Edwards’ order, again stripping local officials of any say over the use of property taxes as development incentives.

In that case, “locals will have absolutely no authority, because the way that ITEP is rigged is to work around local authority,” Morrell said.

“If there is a new governor, it doesn’t really matter what our opinion is,” Morrell said.