Alcoa selling land to LCRA

Water and power contracts are keys to pending deal
Reporter Editor

It might be the end of an era.

If there was actually any of the Alcoa Era in Rockdale left to end.

Alcoa announced last Wednesday it had reached an agreement to sell 34,000 acres of land at its Rockdale Operations site to the Lower Colorado River Authority (LCRA).

Alcoa’s smelter, of course, has been shut down for almost four years.

The deal probably won’t become final before six months to a year. It would lead to the remaining four potlines of an industry once the economic lifeblood of Milam County, classified as permanently closed.

But what will actually change? Not much, although there’s a big wild card yet to be determined.

• The atomizer, which employs about 70 persons, remains open and no layoffs are planned.

• Alcoa retains ownership of the closed smelter, and still leaves open an unlikely glimmer of hope its four potlines could re-open if market conditions change by the anticipated closing date of Jan. 1, 2014.

• There will be no change in Alcoa’s applications to drill new water wells, which will come before the Post Oak Savannah Groundwater Conservation District (POSGCD) on Sept. 11. (See separate story, 6A).

• The proposed deal includes only the land at the former Rockdale Operations, not the structures on it. Alcoa, if it finds the need, could still lease buildings, including its “Building 80” headquarters from the LCRA, according to Jim Hodson, Alcoa spokesman.

• Power c ont ract s between Alcoa and Luminant—the subject of a bitter and high-dollar 2010 lawsuit won by Luminant—remain in place and would be transferred to LCRA, which is also in the power generating business.

WILD CARD—But there could be a change impacting taxpayers of Milam County and the Rockdale ISD.

As a conservation and reclamation district of the state, the LCRA is generally tax exempt, although its affiliates, LCRA Transmission Services and Centex Power Corp., pay both property and sales taxes.

Alcoa, even with the smelter closed, has continued to pay taxes to the county and school district.

If LCRA does not pay taxes, that could represent a revenue loss of about $200,000 to the school district, according to Supt. Dr. Howell Wright and an as yet undetermined amount to the county, according to County Judge Dave Barkemeyer.

Barkemeyer told The Reporter county officials are still trying to determine the amount of possible loss.

“There’s still a possibility they would pay some” he said Monday. “Some divisions of the river authority do pay taxes under some circumstances.”

Barkemeyer said if L CR A doesn’t pay taxes on the property it could cost the county between $100,000 and $200,000 in revenue.”

The person whose opinion matters most isn’t sure, yet, what her take will be on the LCRA tax-no tax question.

Milam AD Chief Appraiser Pat Moraw told The Reporter she is researching the complex question.

“It’s not going to be a quick answer, either,” she said. “This is going to take some time.”

WATER—The sale is mostly about water.

LCRA will acquire Alcoa Lake, which has a capacity of 10,500 acre/feet and Alcoa’s surface and groundwater rights.

Which are potentially substantial.

The property sits over the prolific

Carrizo-Wilcox Aquifer.

LCRA said preliminary estimates are that it could produce as much as 45,000 acre-feet per year in groundwater and even more in surface water from its new Rockdale acquisition.

LCRA says its goal is to “find” 10,000 acre-feet of water in the next five years.

The river authority promised it will be “in contact with local officials” to develop a master plan for the property’s use.

WHAT’S NEXT—All that formally happened last Wednesday was an authorization by the LCR A Board of Directors for General Manager Becky Motal to pursue a purchase agreement with Alcoa.

It is still contingent upon the completion of an environmental assessment.

Hodson said reclamation work done by Alcoa at the site of the former Sandow mine is “virtually complete.”

He said that Alcoa has signed off on the agreement and the work between now and the anticipated Jan. 1, 2014, closing will be LCRA’s.

“They will go ahead and do the ‘due diligence’ work,” Hodson said.

LCRA has hired an outside firm to complete the process. A final decision will be made by its board of directors.

A BILLION BUCKS—It’s not the f irst time A lcoa has announced a property deal for Rockdale Operations.

In October, 2010, Alcoa said it had signed a letter of intent with Velocita Holding, which wanted to create a “green research community” on 11,000 acres at the Rockdale Operations site.

Velocita’s plans called for essentiallyanewtownwith 5,000 residents, a billion-dollar tax base value and $315 million annual payroll.

The deal was called off in December after Velocita announced it was unable to reach an agreement with Alcoa.

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