Billion-Dollar 'Superproject' Highlights Amendment 82 Bonds

by Michael Stratford, The Associated Press  on Sunday, Jan. 27, 2013 10:55 am  

A "superproject" could benefit from Amendment 82 — a voter-approved funding mechanism that would let the state borrow up to $235 million to cover a company's start-up costs, with the Legislature's approval. Voters in 2004 gave legislators the authority to take on such debt after the state lost a truck manufacturing plant to Texas. (Photo by Stephanie Dunn)

LITTLE ROCK — As Gov. Mike Beebe's administration negotiates with a yet-to-be-revealed company over a plan that could bring a $1 billion project to Arkansas, state officials want legislators to follow an unprecedented course to ensure the deal goes through.

A "superproject" could benefit from Amendment 82 — a voter-approved funding mechanism that would let the state borrow up to $235 million to cover a company's start-up costs, with the Legislature's approval. Voters in 2004 gave legislators the authority to take on such debt after the state lost a truck manufacturing plant to Texas. The project could be revealed as early as Tuesday, when Beebe will make a "major economic development" announcement at the state Capitol.

"It's going to mean a large number of high-paying jobs," says Grant Tennille, the director of the state's Economic Development Commission. "The kinds of jobs that help to build communities."

Beebe already has access to nearly $40 million in a "quick action closing fund" legislators first approved in 2007. He's tapped it for a variety of smaller projects and this month asked the Legislature to add $50 million.

With the Amendment 82 money, Tennille said, the governor is now trying to land an "advanced manufacturing facility" that would attract a cluster of other businesses, such as companies providing materials or services.

"Every state in the union wants to land one of these kinds of projects," Tennille said, adding that there are typically only two or three such projects of this scale throughout the country each year.

Over the past decade, Arkansas tried to land Toyota plants of similar value, but both went elsewhere.

In 2007, Arkansas offered a $200 million incentive package for a $1.3 billion Highlander SUV plant that was eventually built at Tupelo, Miss. Mississippi put up $296 million and also had an edge because of air-quality worries in the Memphis, Tenn., area. Half of Arkansas' incentive package would have been covered by a budget surplus.

In 2003, Toyota put a $750 million Tundra truck plant in San Antonio the same day legislators debated a $56 million incentive fund. The next year, Arkansas economic development officials cited Arkansas' failure to land the plant when pushing for Amendment 82's passage.

Beebe and economic development officials say Amendment 82 is the best way to bring to Arkansas such a massive project that will create many jobs and spur further economic growth.

But aside from a rough sketch of the project's scale — in his State of the State address Beebe described the project as "one of the biggest" Arkansas had ever seen — few other details have been released.

Tennille's office has scheduled a Tuesday news conference for a "major" announcement but wouldn't say whether it would involve the project for which Beebe is seeking Amendment 82 financing. Beebe is scheduled to appear at the news conference along with "local and company leaders."

 

 

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