The city asked for a loan to finance its desalination plant. Here's what the state said.

A desalination plant proposed in Corpus Christi has been approved for millions of dollars in state loans for its development.

Late Tuesday morning, the Texas Water Development Board gave the nod to awarding as much as $535 million to help finance its construction at the city’s Inner Harbor site located on a 14-acre property off West Broadway Street and Nueces Bay Boulevard.

“There are a lot of eyes on this project,” said board Chairwoman Brooke T. Paup in the livestreamed meeting.

“It will be the first major seawater desalination project in the state of Texas,” she said. “Hopefully we have more to come because when you’re growing by 1,300 citizens a day you need every tool in the toolbox. You are a test case — so make it work.”

The plant, as proposed, would be capable of treating as much as 30 million gallons of seawater per day.

The low-interest loans approved Tuesday morning are an adjunct to a previously approved $222 million low-interest loan backed by the board for the project under the same program — the State Water Implementation Revenue Fund for Texas — also known as SWIFT funding.

City officials requested the additional $535 million loan after a new cost estimate for the project more than doubled.

A 2019 estimate showed construction costs for a plant capable of treating 20 million gallons of seawater at about $222 million.

Increases to the project total — now estimated at $757.5 million — resulted from a combination of a larger plant capacity and inflation, as well as the 2019 estimate not accounting for about $216 million in supporting infrastructure required for its operations, according to city officials.

The new loan will be doled out over a period of four years, board documents state.

The project was awarded a water rights permit in 2022. A draft discharge permit is anticipated to go before the Texas Commission on Environmental Quality in the upcoming months.

A required permit from the U.S. Army Corps of Engineers remains outstanding as agency officials review the city’s responses to about 470 public comments received on the proposed permit, according to the board’s documents.

The project has become increasingly controversial over the past two years.

Generally, proponents of seawater desalination have praised it as a solution to stabilize the region’s water supply in a drought-prone region — a necessity, supporters have said, to safeguard population growth and the economy.

Opponents have pushed back on the climbing costs of desalination development and have questioned which water customers may carry the lion’s share. Skeptics have also heavily criticized the plant’s proposed location and potential impacts to the bay’s unique ecology.

City officials have said they are confident in their studies showing environmental protection measures while some residents have cast doubt on the studies’ methods.

In the board’s documents, officials noted “a known public controversy related to environmental justice impacts,” referencing a pending Civil Rights complaint related to the plant’s proposed location — adjacent to the Hillcrest neighborhood where the majority of residents have historically been Black and Hispanic.

The complaint remains under investigation by the U.S. Department of Housing and Urban Development.

Representing the Hillcrest Residents Association on Tuesday was attorney Zora Djenohan, who addressed the board virtually.

The two permits needed for desalination plant development are actively being challenged, she said, “Yet the city intends to move forward in seeking this funding.”

The city "assumes that it will eventually receive these permits,” Djenohan said. “But that is not guaranteed.”

More: A Civil Rights complaint on a proposed desalination plant has gone to the U.S. DOJ

More: About 100 people came to state officials to talk desalination. Here's what they said.

This article originally appeared on Corpus Christi Caller Times: The city asked for a loan to finance its desalination plant. Here's what the state said.