Posted 2/19/2013 09:10 am
Updated 2 years ago
The Arkansas Economic Development Commission expects to submit its $125 million incentive package for the Big River Steel mill project to the Arkansas Legislature on Thursday, an AEDC spokesman said on Monday.
Joe Holmes said the agency is putting the finishing touches on the documentation it will submit to House Speaker Davy Carter, R-Cabot, and Senate Pro Tem Michael Lamoureaux, R-Russellville, later this week - "probably Thursday."
The Legislature is preparing to study the state's agreement with Big River Steel, which plans to build a $1.1 billion steel mill along the Mississippi River just south of Osceola (Mississippi County). The Legislature must approve the deal because the state is devoting incentives, including a $75 million grant and a $50 million loan, under Amendment 82 to cover start-up costs.
Cecillea Pond-Mayo, communications officer at the Arkansas House of Representatives, said Tuesday that once the House and Senate receive the AEDC proposal, the two will jointly issue requests for proposals from consultants who will study the proposal as part of the Legislature's due diligence.
Amendment 82 was approved by voters in 2004 after Arkansas lost a Toyota truck plant to Texas. The amendment allows the Legislature to approve borrowing money in order to fund a "superproject," a big employer that will invest at least $500 million and employ at least 500 people.
Under Amendment 82, lawmakers have 20 days from receipt of the proposal to conduct an analysis of the deal, weighing the risks and rewards associated with it.
Lawmakers have been generally receptive to the project but said they will study it carefully.
Legislators in the House and Senate have already heard presentations on the deal by AEDC Executive Director Grant Tennille, Arkansas Teacher Retirement System Executive Director George Hopkins and others who have seen Big River's plans. ATRS plans to invest $60 million in the project.
Big River Steel LLC, led by former Nucor executive John Correnti, and Gov. Mike Beebe announced the project, billed as the biggest economic development investment in the state's history, in January.
They said the plant will directly employ 525 people with annual average compensation of $75,000 a year. It will employ 2,000 people while under construction, set to begin before the end of the year.
When completed, Big River will produce steel for the automotive, oil and gas and electrical energy industries. J. French Hill, chairman and CEO of Delta Trust Investments Inc. of Little Rock, told legislators the business plan developed by Correnti and Global Principal Partners has identified potential buyers for the high-end steel, for which supply is scarce. Hill vetted the project for ATRS.
Local and state economic development officals regard the project as "transformative" and say it will lead to a broader tax base and attract new business to a poor region of the state.
Correnti has called the site of the proposed mill "steel mill heaven" because of its proximity to methods of transportation: the Mississippi River, the Burlington Northern Santa Fe railroad and Interstate 55. The site is also near a 500-kilovolt Entergy Arkansas transmission line, and Entergy played a key role in bringing the project to northeast Arkansas.