Legislative Consultant to Vet Big River Steel Project

by Chuck Bartels, The Associated Press  on Sunday, Feb. 24, 2013 5:12 pm  

The site of Big River Steel's proposed $1.1 billion steel plant near Osceola in Mississippi County.

LITTLE ROCK - The clock is running as legislators seek information about a $1.1 billion steel plant proposed for Osceola. As of Monday, the House and the Senate have 18 working days to look into whether it would be right for the state to $125 million to help finance the project.

House Speaker Davy Carter, R-Cabot, said the House and Senate expect to spend tens of thousands of dollars on a consultant who will analyze Big River Steel LLC's financial and business plans.

"Unless there are some glaring red flags, I think it's awfully hard to not support the project," Carter said Friday as legislators waited for bids from consultants.

The mill promises to employ 2,000 people during construction and more than 500 when the plant is operating.

State economic officials and Gov. Mike Beebe have given their approval for the project, as has the Arkansas Teacher Retirement System, whose board invested $60 million as start-up money.

Arkansas Economic Development Commission spokesman Joe Holmes said the documents the agency handed over Thursday to legislators are shielded from state's Freedom of Information Act. The key document was a commitment letter, which was conveyed with other information that Carter and Senate President Pro Tem Michael Lamoureux requested, Holmes said.

The 20-day clock started with the arrival of the letter of commitment. The project's backers want the state to borrow $125 million - $50 million as a loan and $75 million as a grant - to help with construction.

Such financing is allowed under Amendment 82, which was approved by voters in 2004 after the state lost out to Texas for a Toyota truck plant that officials had hoped to site in Marion. The amendment stipulates that a business would have to spend at least $500 million on development and employ at least 500 people.

Big River Steel is the first project to be negotiated under the amendment, which sets the 20-day time frame for the analysis.

After the consultant provides the report, a bill will have to be filed, but can start in either chamber and will likely be routed through the Agriculture, Forestry and Economic Development Committees.

The Teacher Retirement System commissioned its own consultant study, which was performed by Delta Trust. System Director George Hopkins said he expects the Legislature's study would explore similar aspects.

"Most consultants do a lot of the same things," Hopkins said. "Is the location good enough, do the people (proposing the project) have experience and financial backing? Are there Arkansans capable of working in that plant and producing the product? Is there adequate supply of scrap and other materials?"



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