John Correnti, chairman and CEO of Steel Development Company LLC, a steel mill operational and development company.
You’ll want to check out “Arkansas Week” at 8 p.m. Arkansas Economic Development Commission Executive Director Grant Tennille is host Steve Barnes’ guest at the top of the show, and he’ll talk about the week’s big economic development announcement, the $1.1 billion Big River Steel mill set to bring 2,000 temporary construction jobs and 525 permanent jobs to Osceola in Mississippi County.
No doubt the project’s a humdinger. But with Amendment 82 in play, AEDC’s $125 million incentive package will fall under legislative scrutiny starting next week, when Gov. Mike Beebe and Tennille will spend a few hours in meetings with the House and Senate, answering question and providing information about the deal and the ins and outs of the ROI.
A more rigorous examination will begin once Beebe and AEDC officially submit their plan, after which Legislators have 20 days to vet the economics of it all. Just how much can Arkansas expect to get in return for more than $130 million in taxpayer dollars, and when can we expect it?
In addition to a hard look at the AEDC numbers, we’d suggest a hard look at the man at the center of the Big River deal, John Correnti. The Associated Press was quick to point out a list of Correnti deals that fell through, some in spectacular fashion.
There’s a particularly bitter analysis piece by the Mississippi Business Journal floating around — the Arkansas Times notes it here — that goes into some detail about Correnti project in Lowndes County that fizzled at the end of last year, when Correnti and his investors missed a deadline to put up a mere $150,000 toward a $200 million silicon purification plant that would have qualified for $75 million in incentives.
In light of his experience with Correnti, a Lowndes County economic development leader is dubious that Big River will ever come to pass in Arkansas:
Lowndes County Board of Supervisors President Harry Sanders said taxpayers are out about $230,000 on the Silicor project Correnti promised that never came to fruition. Sanders predicts the big steel mill in Arkansas will never happen.
“It makes no sense to me at all,” Sanders said. “John Correnti and this group have a history of speaking of great big, huge projects that never end up happening. Nucor has two steel mills within 30 miles of where the new plant is planned. You have a huge new steel mill in South Alabama that is up for sale, and two or three other steel mills that have closed and are out of business. If the Arkansas Legislature does their due diligence, they will never pass a bond issue to give them the money because the numbers don’t work.”
And there are other Correnti projects that didn’t come to pass, including a rebar manufacturing plant in Amory, Miss., which broke ground in October 2008 but died after a lack of funding.
The whole MBJ piece is worth a read, even if you allow for the very real possibility of sour grapes on Mississippi’s end. In fact, that’s exactly what Mississippi County economic developer Clif Chitwood chalks all this up to: bitterness.
I’ve been in the business 16 years and I have never worked a project where I didn’t have a competing city in Mississippi. That’s what always happens. The two states are very competitive with each other and, obviously, any company that comes into the Mid South that doesn’t want to be in Memphis will be looking at communities like Mississippi County or counties in Mississippi. We have known Mr. Correnti’s since he moved here in 1980s with Nucor. He was always a good corporate citizen, and we are excited to have this project.
Excited, but smart, which is implicit in Tennille’s comments on the matter this week. He’s noted that the AEDC deal has a couple of failsafes built in. For example, Correnti and his investors have to spend $250 million of their own money before the state releases proceeds from the bonds.
And Correnti isn’t a newbie. A former Nucor Corp. CEO, Correnti’s connections with then-Gov. Bill Clinton helped Arkansas land the first Nucor plants in Blytheville in the late 1980s. Arkansas nearly landed a deal for another Correnti plant in the twilight of the Huckabee administration, but Haley Barbour’s deep pockets and a better deal on electric rates drove Correnti back to the state of Mississippi.
Now it’s Arkansas’ turn again, and the pitch is irresistible: a transformative project with average salaries that are double the county’s media income and the ability to attract more business to a region in demonstrable need of it.
Here’s hoping that this is another John Correnti hit and not a miss. And that the Legislature isn’t too star-struck to ask the tough questions.
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