Abilene council approves creation of reinvestment zone to allow tax abatement for Lansium expansion

The Abilene City Council on a voice vote approved on first reading the creation of a new reinvestment zone covering about 940.89 acres to enable future tax abatement requests tied to expansion by Lansium.

City Manager Robert Hanna told the council the designation is required before members can consider tax abatement agreements at a February 13 meeting and said the move is intended to keep Abilene competitive for large facilities that often proceed on short timetables.

Hanna said the authority would be used for tax abatement under Chapter 312 of the Texas Tax Code and compared it to Chapter 311 reinvestment zones, noting they serve different statutory purposes. He described the proposed abatement as an 85% abatement of the company's tax liability, with the city receiving the remaining 15% each year. Hanna said those 15% receipts represent “millions” over the life of the project and estimated the initial agreement could generate roughly $70 million to $90 million in revenue to the city over a 20‑year term.

During a public hearing, resident Samuel Garcia urged the council to delay or reject the designation. Garcia cited the February 2021 winter storm that caused widespread outages and deaths, and said data centers can be intensive users of water and electricity. “What is the city's plan if we have another one of these episodes?” he asked, requesting studies or published answers on water and electric capacity and prioritization during outages.

Resident Tammy Fogle also asked how the expansion would affect city resources and whether the company would contribute to mitigation or resource planning.

Hanna responded that the data‑center cooling systems proposed for the site are closed‑loop and that the company expects to use industrial pretreatment so discharged water can be returned to stream cycles. He said the water demands and piping sizes stated by the company ‘‘are not gonna put an undue burden on our water supply.’’ On energy, Hanna said Lansium plans significant on‑site generation, including green energy, and that its location in Texas allows it to use energy that the ERCOT grid is not using at times. He also said the city is working to add backup generation at water plants after lessons learned from the 2021 winter storm.

Hanna confirmed the original Lansium agreement was amended and restated; under the amended terms the city is not pursuing a payment‑in‑lieu‑of‑tax (PILOT) and instead would use a straight abatement to reflect the larger amount of investment now planned. He said expanding the reinvestment zone to include the roughly 940.89 acres would allow the city to consider abatements for future construction and expansion on the site, which could increase the city's revenue base and local jobs if the company builds additional facilities there.

Councilman McAllister moved to approve the first reading creating the reinvestment zone; Councilman Yates seconded. The council approved the motion by voice vote; the mayor summarized the outcome as “All yeses. Motion carries.” The first‑reading approval establishes the zone but does not by itself grant a final tax abatement. Final abatement terms and any development agreement remain subject to a future council vote.

Public commenters asked that the city publish or otherwise make available the studies and capacity assessments they referenced and urged clearer public disclosure of the amended agreement terms before final abatement votes.

The council took the first‑reading action as Item 2 on the agenda; the item will return for consideration of specific abatements and related agreements at a later meeting.