LITTLE ROCK, Ark. (AP) – Gov. Mike Beebe on Tuesday unveiled Arkansas' largest ever economic development project, saying investors were poised to build a $1.1 billion steel mill along the Mississippi River if legislators approve startup funding.
Big River Steel LLC, to be located near Osceola, would employ 525 people with an average salary of $75,000 – twice the state average. Beebe said for the project to go forward, the Legislature must authorize $125 million in incentives and the plant must meet regulatory approval.
"It is an event that's going to bring the struggling Delta community out of the doldrums," Osceola Mayor Dickie Kennemore said.
The mill will turn Mississippi County into one of the nation's largest steel producers, Beebe said. Nucor Corp. already operates a mill at Blytheville, making steel from scrap metal. Since it opened in 1988, Mississippi County has seen its unemployment rate cut in half.
"This could do exactly the same thing again and then some," Beebe said at a news conference unveiling the plant.
Mississippi County has lost more than a third of its population since 1960, according to U.S. Census Bureau figures, and of the 7,600 who remain at Osceola, nearly a third of them are in poverty. While the job will be tough, wages will be beyond what many could have dreamed of without moving out of state, Beebe said.
"It's hot. It's dusty. It's not easy work," Beebe said.
Kennemore said the plant will transform lives.
"They'll be able to educate their kids, send their kids to college, feed their kids and have a quality of life and a self-esteem that they've never had before," he said.
The plant site is about 40 miles north of Memphis, Tenn., along the Mississippi River, a railroad line and Interstate 55. A major intermodal hub is at Marion, 30 miles away, where goods can be transported by barge, train or truck.
"Arkansas geographic location in the heart of the markets we intend to serve, the state's well-developed transportation infrastructure as well as the availability of reliable electrical power and the 'can do attitude' of the government officials in Little Rock, Mississippi County and Osceola make Arkansas a great place for Big River Steel to make its investment," Big River Steel CEO John Correnti said in a statement.
The plant will make steel for auto, oil and gas and electrical energy industries.
Correnti, a former Nucor executive, has had success developing steel operations in Mississippi but some of his other projects have failed. He backed a $650 million Severstal steel mill that opened in 2007 in Lowndes County, Miss. A separate silicon plant in the county lapsed when funding couldn't be arranged.
He also announced in 2008 plans for a $175 million steel rebar project at Amory, Miss. With the promise of an 80,000-square-foot facility along the Tennessee-Tombigbee River and the creation of 200 jobs. But after a celebratory groundbreaking, the project fizzled.
In Ontario, Ohio, Correnti and others promised a $275 million silicon plant that was never built, and in Stanly County, N.C., Correnti and others promoted a $300 million silicon project and 450 new jobs. After local officials bickered over the project, the deal was taken off the table in December 2011.
Arkansas voters in 2004 gave legislators authority to borrow money for economic development after narrowly missing out on a Toyota truck plant that was eventually built in San Antonio. Arkansas was also an also-ran in 2007, when Toyota opted to build a Highlander SUV plant in Tupelo, Miss.
Under Amendment 82, the state can borrow up to 5 percent of its budget to land significant projects and pay back the money over time, typically 10 or 20 years. A portion of the money to be used – $50 million – will be paid back by Big River Steel.
Arkansas Economic Development Director Grant Tennille said another state is poised to take Big River Steel if Arkansas legislators don't approve a funding plan.
Mississippi County Economic Development Director Clif Chitwood said the county put up $12 million and Osceola contributed $2 million to buy land and develop utilities for the site. The most significant infrastructure need is a 20-mile gas pipeline that will run to the site from near Dell.
The state is making available a sales tax rebate for equipment and machinery purchases, a 4 percent income tax credit for new jobs for five years, $10 million in training funds, a sales tax exemption on utilities and a separate equipment tax credit.
The utility tax break includes natural gas, of which the plant will be a significant user.
The $10 million for training includes $5 million each from Beebe's Quick Action Closing Fund and from the state Department of Workforce Services.
Associated Press writer Jack Elliott in Jackson, Miss., contributed to this report.
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