Toxic Town Lures Industry While Residents Wheeze

Texas oil was first discovered near Port Arthur. For decades, the region nurtured industrial build-up with generous tax abatements. In return, the companies would promise to pay later and to create local jobs.

Ortiz defends the incentives as the only way to keep his city alive.

"The one main substance that keeps the city floating is the refineries," he said.

Refineries and chemical plants contribute about 67 percent of the city's budget through some taxes, Ortiz said. Still, without the abatements the city would have collected tens of millions of dollars more.

The city of Port Arthur has at least 28 tax-abatement deals with refineries and chemical plants. Surrounding Jefferson County has at least six, including with Motiva, Total, and Valero, which will pay no property taxes for the first two years of a nine-year contract, and then pay 10 percent of the taxes it would owe for the next seven.

Motiva will pay no taxes on a $3.5 billion expansion project for the next three years. Total taxes rise to $4.16 million by 2012.

Jeff Branick, assistant to Jefferson County executive Ron Walker, says the Motiva expansion is expected to create thousands of temporary construction jobs and 300 permanent jobs; Valero's project is expected to create 40 to 65 jobs, he said.

"It's going to be pumping a whole lot of money into the local economy," Branick said. "It creates hotel-motel tax revenue and will be attracting people from the outside who will be coming here to work and renting houses."

Ortiz also points to a new development on Pleasure Island, a resort with golf courses, new hotels and bustling shopping centers springing up on the city's south side. All, says Ortiz, spurred by the growth of the industrial complexes.

However, that prosperity bypassed Port Arthur's predominantly black west side and central city neighborhoods where singer Janis Joplin and sports legend Babe Zaharias were raised.

"This town is like a forgotten grandmother. It helped nourish the growth of the area, now all the wealth is moving (out)," said Kelley. "It's not fair to leave this entire community unnourished."

Boom Misses Many in Town

Despite the development, Port Arthur is not as prosperous as other refinery towns. Its median household income is two-thirds the Texas average; its homes are valued at less than half the state average. Port Arthur public high school students pass the test required for graduation at about half the state rate.

By comparison, the Houston suburb of Deer Park -- home to its own refinery row -- collects more taxes from its petrochemical complex. Before the state equalized school funding, its school district was nearly the richest in the state. The median home price is 25 percent higher than the state average and its median household income is 30 percent above the state average.

Both cities have roughly the same percentage of residents in chemical or construction fields.

Kelley is not the only one raising questions about how things are done in Port Arthur.

Some city officials have also started to question the benefits of the tax abatement deals.

In most, companies promise to "give Port Arthur residents a fair opportunity to apply for employment" but don't require jobs go to city residents. One company's pledge to use local labor and contractors defined "local" as covering a nine-county region.

Councilman Michael Sinegal says he frequently hears from residents who say they have been rejected for jobs at the plants. Overall unemployment here is about 6 percent, while among blacks it's 14 percent, he said; the state rate is 4 percent.

"The bottom line is that the people of Port Arthur are getting the negative byproduct from the plants, but should be getting an abundance of positive byproduct," Sinegal said.

Valero said the refinery has hired 161 people since Jan. 1, 2005. About 20 percent live in Port Arthur.

The city council recently ordered a study on contractors' hiring practices so it can devise a monitoring plan.

"We've let the community down," Sinegal said.

In late August, a group of 28 state lawmakers joined Kelley and others in urging Texas Gov. Rick Perry to block further shipments of VX hydrolysate to Port Arthur. Perry declined to intervene.

The latest assessment by state environmental regulators of Port Arthur showed that benzene had dropped to acceptable levels for the first time since 2000. Valero officials said they reduced emissions by more than 82 percent between 1996 and 2005, and had reduced "upset" emissions by 98 percent. Residents, however, still suffer higher rates of progressive pulmonary diseases than people elsewhere in the state.

Last year, Motiva agreed to give $3.5 million to help fund medical care, air monitors and a revitalization program for Port Arthur's west side community. The agreement was part of a settlement with Kelley's Community In-Power Development Association, after it challenged the plant's expansion.

And, 50 years after Carver Terrace was built, the Port Arthur Housing Authority plans to demolish the units and move residents to new homes throughout the city.

Was Carver Terrace's proximity to the refinery the authority's prime motivation? No, said authority chief Cele Quesada. "Of course, in the back of everyone's mind, there is awareness that we are on the fenceline. We would rather see a green area here than 180 families."

The likely buyer? Motiva Enterprises.

Kelley, who was born in Apartment 1202-E in Carver Terrace, commented: "When you appeal to the conscience of man, how these things are impacting our children, you can get them to see our point. But a lot of the times, the bottom line still wins."