Big River Steel Report Says Officials Overestimated Benefits of Osceola Plant

by Andrew DeMillo, The Associated Press  on Thursday, Mar. 21, 2013 5:08 pm  

Arkansas Economic Development Commission Executive Director Grant Tennille (top left) met with the Arkansas Senate last month. Senate members questioned Tennille and others on details about the Big River Steel project. (Photo by Lance Turner)

Representatives fromt the Arkansas Economic Development Commission, including Tennille, held question-and-answer sessions for both houses of the state Legislature last month.

During those sessions, those economic development officials expressed confidence in Correnti’s ability to build the plant, get it running and have it producing steel at the necessary capacity to pay back what it will owe the state. 

During his session with the Senate, Tennille said the state structured to the longest clawback period it had ever negotiated: 15 years. In that time, AEDC could take back state money if Big River didn't meet its promised employment level (525 workers), average salary ($75,000) and size of investment ($1.1 billion).

Tennille also said that if the Legislature agreed to authorize the bonds to provide the incentives, the state wouldn’t sell them until Black River equity investors put $300 million of their own money in escrow and secure financing for the other $700 million. The company must spend $250 million of its own money on the project before spending the first $1 of state money.

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