Diamond Services seeks partial parish tax break

The Terrebonne Economic Development Authority sought to avoid any potential conflict of interest with the Morgan City oilfield-services company Diamond Services Corporation, at the monthly TEDA board meeting Thursday.

Diamond Services wants to construct a ship-repair yard specializing in hull repairs at a 1,900-acre site the company owns in Gibson along Bayou Black, said company representative Tim Tregle. The company intends to invest $34.325 million into the site, and will generate between 275-325 jobs.

The property in Gibson is a disused oil pipeline storage facility formerly belonging to McDermott, he explained.

Diamond Services is requesting a partial exemption on sales taxes the company will owe Terrebonne Parish when the repair facility begins operating.

The possibility of a conflict of interest arises because “Diamond could be a customer of a company of a person sitting on the (TEDA) board,” said Katherine Gilbert, TEDA business retention and expansion director.

TEDA counsel James Dagate said, “If there is a conflict of interest, you can abstain (from voting, or resign) if you have a business relationship with someone applying before a commission.”

TEDA Board Member Charles Adams, a Houma wholesaler, said, “You need to be a business owner to be a member of the board. They may be one out of 3,000 customers I have.”

Later, he said, “The requirements of being on the board (can) cancel out being on the board.”

TEDA Board Member Don Hingle suggested that the Terrebonne Parish “Council should look at other economic development agencies” besides TEDA because of the potential conflict of interest with Diamond Services.

Terrebonne Parish could exempt Diamond Services from one-third of one percent in sales taxes, said TEDA CEO Michael Ferdinand.

The figure is the “non-obligated portion” of the parish sales tax, Ferdinand said.

“That’s the only part we can abate,” he said.

Ferdinand said he would contact Terrebonne Parish Comptroller Jamie Elfert and Terrebonne Parish Attorney Courtney Alcock to “determine what the non-obligated portion is (and) to clarify how much would be exempted.

“The parish has asked us to defer,” he said, “also for legal clarification.”

Referring to discussion about Diamond Services’ tax exemption, Tregle said, “One third of one percent is not a big issue. We can wait 30 days. We have time.”

TEDA President Henry Richard moved to defer consideration of Diamond Services’ tax exemption status until TEDA’s next meeting, which was passed.

“We’re excited about moving forward with the project,” Tregle said.

After the meeting, Richard said, “We have to see how much (sales tax) is not dedicated, and can we even vote on it. This has to do with doing it the right way.”

Gilbert said that TEDA has not grappled often with conflict of interest issues. The Authority was formed a few years ago as a quasi-governmental organization to foster economic growth in Terrebonne Parish.

She said that TEDA is modeled on the Jefferson Parish Economic Development Commission (JEDCO), and the Lafayette Economic Development Authority (LEDA).

Concerning conflict of interest policy, Gilbert said, “If it’s worked for them (JEDCO and LEDA), it will work for us.”

Also at Thursday’s meeting, the TEDA board deferred discussion on whether to contribute $10,000 to the Morganza Action Coalition (MAC), which is a private organization formed to lobby Congress to pass the Water Resources Development Act.

The Act provides money to construct hurricane protection levees in Terrebonne Parish. President Bush had threatened to delete the hurricane protection levee money from the WRDA bill, but the U.S. House passed the bill with money for the levees included.

An April 25 letter from the Coalition’s Danny Walker to Ferdinand states that the Coalition needs money to lobby the U.S. Senate to pass WRDA. However, Ferdinand said the Senate has passed a version of WRDA, and the bill is headed for a conference committee.

“We’re one of many sponsors for MAC,” Ferdinand said. “MAC will continue to seek our support in the future.”

Referring to the passage of WRDA, Richard asked, “Did this coalition make a difference, or was it the hurricane?”

Hingle questioned whether public money should be contributed to a private lobbying organization.

“Ten thousand dollars is a lot of money” to contribute to an effort that “should be financed by the private sector,” Hingle said. “There’s a grayness. I’d like to defer.”

The letter asks TEDA to “renew” its “support of the coalition by making a contribution equal to last year ($10,000).”

TEDA Board Member Morris Hebert said, “The effort will continue. We’ll hold the line for the time being.”

Later in the meeting, Ferdinand praised Terrebonne Parish’s A+ bond rating with the bondnrating firm Fitch.

The A+ rating “reduces interest rates. It sends a message to companies that this is a solid place to invest.”

Ferdinand said that the hotel-development firm K Partners is still looking at developing a hotel next to the Houma-Terrebonne Civic Center.

“It’s still an active project,” he said. “Things are moving in a more positive manner.”