Details have emerged through a 52-page amendment to SB 820 filed Wednesday (March 27) to lay out the terms and conditions of the state’s agreement to float a bond issue and provide tax credits and incentives to the $1.1 billion Big River Steel mill superproject to be located in Osceola (Mississippi County).
The factory, led by investor John Correnti, is expected to initially employ about 525 workers.
Lawmakers are being asked to approve a $125 million bond issue that will allow for lower financing rates for a $50 million loan and $75 million in grants and incentives to begin the infrastructure for the superproject.
The new amendment to the bill, co-sponsored by local elected officials Sen. David Burnett, D-Osceola, and Rep. Monte Hodges, D-Blytheville, also includes a copy of the agreement between the state of Arkansas and Big River Steel.
For Big River to qualify for the benefits laid out in the act, it must:
• Begin its work prior to March 31, 2016 and be considered a qualified steel manufacturer.
• Also have begun production after January 1, 2013;
• Have invested $500 million in the mill on property, machinery and equipment, motor vehicles, project planning, or construction labor costs;
• Employ 300 individuals in management, operations and maintenance of the steel mill; and,
• Pay wages equal to or in excess of $70,000 per year per employee.
The bill also requires Big River Steel to report annually that it is maintaining these requirements to keep its benefits.
The bill could run as early as Thursday (March 28) in the Senate Agriculture, Forestry, and Economic Development committee.
On Tuesday night, the Mississippi County Quorum Court unanimously approved a $14 million incentive package for the Big River Steel deal.
There are a lot of thoughts swirling around the capitol on the Big River Steel project as legislators debate whether to float a $125 million bond issue to support a loan and incentives for the $1.1 billion steel mill.
After a lengthy meeting on Monday (March 25) to hear from economists, state officials, and representatives of Nucor Steel and Big River Steel, Arkansas lawmakers indicate a variety of opinions on the project. Following is a sampling of thoughts.
• House Speaker Davy Carter, R-Cabot
“The bottom line for me: is this going to be a good investment for the state. In my opinion, there is some intangible benefit in being involved in a project like this. One thing you know for certain is, if you don’t do anything, there isn’t going to be any investment in that part of the state. Then it becomes a balancing task. Is it a risk worth taking to create some economic activity in that part of the state? I think it’s going to be awfully hard to turn this down. From my perspective, it looks like a risk the state can mitigate.”
• Sen. Bruce Holland, R-Greenwood, and chairman, Agriculture/Economic Development Committee
“No, I’m not ready to endorse it right now. A lot of the questions today, a lot of the testimony, were: do the numbers work out? The bigger question still remains on the basis of these numbers of what this company says they can do… Most contracts with automotive suppliers require that they have a contingency plan. What happens if your mill goes down? What happens if a tornado comes through and does damage that makes you go down for six months. Nucor, for example, would have another mill where they could supply the customer from. This company does not.
“We want to invest the taxpayers money wisely. At this point, they haven’t talked me into investing my money, so why should I invest your money?”
• Rep. Monte Hodges , D-Blytheville, who represents Mississippi County
“I’m very optimistic from what I’ve heard. I go back to what I said before: as a banker, there’s a level of risk in any investment you make. Some of my strongest customers with the best credit and the best capital could have still gone south on me. That the two reports said there is steel mill capacity is a relief to me.”
• Rep. David Branscum, R-Marshall
“I think it’s a good investment. If it’s worth doing, it’s worth the investment. There are always risks to anything we do.”
• Rep. Joe Jett, D-Success
There’s still a lot questions to be answered. I think legislators put a lot of stock in the two companies that came and did the due diligence for us.”
• Rep. Nate Bell, R-Mena
“At this point we need to see a clear picture that this is going to be viable. Right now, it’s dependent on operating at near capacity pretty much all the time.”
• Sen. Jane English, R-North Little Rock, and a former AEDC employee and former director of Arkansas Department of Workforce Services
“My biggest concern is whether or not there is an available workforce in that area where people will have to come from, whether or not how hard it’s going to be to recruit additional management personnel for the area. It’s always been an issue for Nucor to try to find qualified, skilled workers.
“I think the size of the project is a windfall, could be a windfall for the state. We don’t get things like that very often. I’d be very happy to see us have 20 companies that hired a 100 or 150 people all over the state.”
• Rep. John Vines, D-Hot Springs
“Much, much more favorable. We had a great meeting yesterday. I think we got to the crux of the issues and it was good to hear form the parities involved.” (Q: Do you support the project?) “I’m leaning that way.”