Editor’s note: You can view the press conference from today in its entirety at the bottom of this post.
Arkansas landed its first official “superproject” as Big River Steel announced plans to construct a $1.1 billion steel mill in Mississippi County near Osceola.
The mill will employ 525 workers initially with average annual wages of $75,000 – more than double the state’s per capita income.
The mill will be located on a 1,000 acre site in northeast Arkansas near Osceola giving it access to the Mississippi River, a key factor in the site location. The Mississippi County site beat out several other locations in Arkansas and dozens of other potential sites in 10 other states.
Big River Steel was formed by long-time steel executive and entrepreneur John Correnti and a team of industrial and financial investors. Correnti once headed Nucor Steel and its two steel mills also located in Mississippi County. He has nearly 40 years of experience in the steel industry.
The mill is expected to provide 2,000 construction jobs and could lead to the location of supplier businesses and steel customers locating in the region. Arkansas economic officials also secured a commitment from Big River Steel to steer at least $200 million of the plant’s billion dollar price tag on in-state Arkansas contractors.
Big River Steel Mill is an advanced manufacturing, state-of-the-art production plant and will produce steel for the automotive, oil and gas, and electrical energy industries.
The billion dollar deal is contingent on legislative approval of a $125 million bond issue allowed under Amendment 82. It is the first time the superproject amendment has been utilized since its passage in 2004.
If approved by the General Assembly, the $125 million bond issue will be used as follows:
- $50 million loan to Big River Steel
- $50 million for site preparation
- $20 million for subsurface stabilization near the Mississippi River
- $5 million in bond issuance costs
Members of Gov. Beebe’s administration are now charged with submitting a financial plan and cost-analysis to Senate President Michael Lamoureux, R-Russellville, and House Speaker Davy Carter, R-Cabot. Those two legislative leaders will have 20 days to independently review the proposal and vote whether or not to obligate the state to the general bond issue.
While the state will be on the hook for the full $125 million bond issue, Big River Steel will be paying for $50 million of the bonds as a loan. That arrangement will minimize the total price tag the state may have to dedicate to cover the costs of the bonds.
Also state and local economic development leaders are providing the following additional incentives:
- Tax Back – sales tax refunds on materials, machinery and equipment
- Advantage Arkansas – 4% income tax credit based on new payroll for new jobs in 5 years
- Training funds – $10 million for workforce training with half coming from the Governor’s Quick Action Closing Fund and $5 million from the Dept. of Workforce Services
- Recycling Equipment Tax Credit – Income tax credit equal to 30% of eligible recycling equipment costs
- Sales Tax Exemption on Utilities – Full exemption of sales tax on sale of natural gas and electricity
- City of Osceola – $2 million
- Mississippi County – $12 million