[Nameplate] Fair ~ 70°F  
High: 81°F ~ Low: 59°F
Tuesday, July 29, 2014

Quorum Court OKs funds for Big River Steel project

Wednesday, March 27, 2013

(Photo)
The Mississippi County Quorum Court met before a packed house Tuesday night at the Blytheville courthouse.
Approval was given by the Mississippi County Quorum Court Tuesday night to appropriate $14.5 million in county economic development tax funds for its part in the state's incentive deal with Big River Steel, but officials emphasized that if the state of Arkansas or private investors pull out of the deal, the county's money would no longer be committed.

Justices addressed a record crowd at the Blytheville courthouse, along with representatives from both Nucor and Big River.

Speaking on behalf of Nucor was Blytheville native Tyler McGuire, who has worked at Nucor for 18 years. McGuire emphasized the points that Nucor has been making over the past few weeks regarding the Big River Project -- namely that the companies will be direct competitors and that Nucor does not wish for its employees' tax dollars to fund such a project.

"Those that are proposing the Big River Steel project, certain elected officials and the media have portrayed Nucor as 'entitled,' as if we think we should be the only company to produce steel in the state of Arkansas," she said. "This is an inaccurate depiction. I think I can speak for my teammates when I say that we believe in capitalism. We are not afraid of competition. We are, however, very concerned when our elected officials deem it acceptable to use our tax dollars to subsidize a direct competitor. We are concerned with your apparent lack of understanding of the industry that feeds our families."

McGuire went on to question whether or not county officials had contacted the state of Mississippi to see if it has any offers on the table for Big River, based on statements about the plant being built somewhere else if it is not built in Mississippi County.

"I have heard my elected officials and the economic development staff tout the Big River Steel officials expertise in building and managing steel mills, but have you really confirmed those assumed successes?" she asked. "Many of the same assertions made in regard to the Big River Steel project were made when the Mississippi steel mill SeverCorr was being proposed. SeverCorr was built but is now wholly owned and managed by Severstal."

McGuire then listed statistics about Severstal, saying that last year it lost $255 million, and is not currently operating at projected capacities and is being kept afloat by its Russian parent company. She also said SeverCorr was purported to be participating in the exposed automotive steel market -- one in which Nucor does not participate -- but that SeverCorr did not and has not operated in that market, and that its construction project ran a quarter billion dollars over budget.

She closed by saying that the project seemed like a "fast moving train," and further challenged the Court to ask more questions and ensure that they had accurate information, asking that they take the time needed to gain better understanding before committing tax dollars to the project.

Also present representing Nucor were Chad Utermark, general manager of Nucor-Yamato Steel, and Sam Comella, vice president and general manager of Nucor Steel Arkansas, but neither addressed the group.

John Correnti was in attendance to speak on behalf of his project, and repeated statements he has made before in the area about his love for Mississippi County and his appreciation for the people here who helped to make his career.

"I want to come here because I want to make money," he said. "And I want to have the people I hire make money. Nucor is a great company, but I'm disappointed that they are spreading doubt and fear, as well as a lot of inaccuracies."

He went on to say that his project did have an offer from Mississippi, but that he had turned it down to accept the one from Arkansas.

"Mississippi County is still a good place to put a steel mill," he said. "And Big River will be a good corporate citizen. Our corporate headquarters will be in Osceola, and our executives will live in northeast Arkansas. This is a good project for Mississippi County and for the state of Arkansas, and it will employ a lot of good people who are looking for jobs -- an opportunity, not a guarantee. My only guarantee was to the state for that number, but I don't lose a bit of sleep over it because I know they will exceed those numbers."

Addressing the issue of production overlap with Nucor, Correnti said he was hoping to make a higher grade of steel that could be sold to automotive companies, as well as to local industries who need additional products that Nucor does not make.

"As far as the connotations about the state and county money being spent," he said, "Nucor got $660 million from the state of Louisiana to put a facility in there, and it's disingenuous for them to say that it's not good for the goose but good for the gander."

County Economic Developer Clif Chitwood also addressed the Court, saying the Arkansas Economic Development Commission has performed full due diligence in the project.

"Two consulting firms hired by legislators gave it a high rate of success," he said. "This is a once-in-a-decade opportunity. The Nucor campus grew from a few hundred jobs to close to 5,000, and we believe the same thing could happen here. It's a good investment."

He also emphasized that $150 million from private investors had to be spent before any state or county tax dollars were kicked in to the project.

Also visiting to address the Court and audience was Grant Tennille, head of the Arkansas Economic Development Commission in Little Rock, who said his agency is very appreciative of Mississippi County for being willing to partner with the state in funding the project.

"In larger deals such as this one across the country," he said, "the state's share of an economic development incentive usually comes out to 10 percent -- call it corporate welfare. We have learned a lot about how banks look at these deals -- what would it cost to complete this project if everything was perfect? Everything is not perfect in the real world. Big River Steel spent over a year looking at sites around the country. When it comes down to two or three sites, the economic development game is to help the company create that perfect version of the world for their project. Often this involves pulling in private land, or working with natural barriers or impediments. The company knows what it will cost to build, and it looks for incentives that will solve problems in the process that had not initially been part of their vision."

Tennille said in the Big River deal, a bank was funding $700 million, Big River $300 million, the state of Arkansas $125 million, and Mississippi County $14.5 million.

"This makes us and Mississippi County a small part of the project," he said, "but an important part. It's important to have a community that is willing to do their share. I believe this is a good deal for Arkansas and Mississippi County. I will not get paid one dollar more whether Big River comes here or not, and I have zero incentive to bring the legislators a bad deal. I have chosen to make Arkansas my home. I wasn't born here but I love it. And I cannot spend the rest of my life having people whisper behind my back that I was the guy who lost us all that money on a bad steel deal. That's what keeps me awake at night. I recognize you are at a disadvantage, being asked to make a big decision, and one that is frightening, but I have looked at this as closely as anything in my life, and talked to people for and against it. We have adequate safeguards if the company doesn't perform, we'll get our money back. My job is to bring high paying jobs to Arkansas and we did that. If one impact is that the wage scale in Mississippi County goes up and other companies have to pay people more money to work for them, good. That's the idea."

He added that while Big River might create some competition for Nucor, he does not believe it will imperil them.

"Economists have said that there is room in the marketplace," he said, "and two steel mills in Mississippi County will serve as a map for other companies that need steel to make what they make. Over the next three years, our agency and Big River have committed to put up $100,000 a year each for traveling the world and talking up Mississippi County in industries that need steel. This will transform the economy of this county."

After hearing statements from both sides, as well as reviewing reports from committee chairs, the Court voted a unanimous "yes" to appropriate the funds, in an ordinance which also provides for the purchase of cars for the Sheriff's Department, continued cultural studies on the supersite and workforce training.

sharris@couriernews.net
;

© 2014 Blytheville Courier News