Arkansas Business

In his final State of the State address, Beebe said he'd need help from legislators to land the state's largest development project but stayed away from the hard sell.

Until now.

The clock is ticking for the Legislature to approve $125 million in financing, making economic development a front-burner issue in a general session that had been focused on Medicaid.

"It's a classic example of how talking about what the session's going to be like are probably not the best use of our energy. I've given a lot of speeches about the big issues of the session before the session and that wasn't one I thought we'd be dealing with," Senate President Michael Lamoureux said last week.

Big River Steel LLC plans to build a mill near Osceola in Mississippi County and hire 525 workers with an average salary of $75,000 a year. The deal would transform an impoverished region into an economic engine.

To make it happen, though, Beebe must convince legislators that it must spend money to make money. His mission begins in earnest this week when he returns to the chamber where he served 20 years to answer senators' questions about the project.

The Senate plans to hold a "committee of the whole" meeting on Monday about the project and legislation attached to it, while the House will hold a similar meeting two days later.

The majority of the $125 million Beebe is proposing — $75 million — would be a grant to Big River Steel for startup costs associated with building the facility. The remaining $50 million would be a loan the company would have to repay.

Arkansas' total net cost of repaying the bonds would be about $5.1 million per year over 20 years, based on an estimated 3.7 or 3.8 percent interest rate, according to economic development officials.

The questions lawmakers pose to Beebe and economic development officials will indicate how much support there is for the state's investment in the superproject. It will also start a new debate over the state's incentives — notably Amendment 82, which allows the state to borrow a limited amount of money to reel in large businesses.

In the abstract, the lure of a project that officials say will create 525 new jobs — and 2,000 jobs during the mill's construction — as the state is recovering from the economic downturn is a tough offer to refuse. But Democrats and Republicans say they won't commit before receiving more details.