Big River Steel LLC announced today that it had closed on the financing necessary to build a $1.3 billion steel mill in Mississippi County that supposedly will employ 500.
Construction is expected to take two years.
The mill was opposed by competitor Nucor, which Big River CEO John Correnti helped establish. Nucor particularly objected to the rich government help Big River is getting — millions in state aid, tens of millions in venture capital from the Arkansas Teacher Retirement System, $125 million in low-interest state lending, hugepotential tax credits for the Koch brothers, who are equity investors.
None dare call this socialism, though a taxpayer-financed agency (Teacher Retirement) has a pretty big hunk of the ownership. Just remember that when businessmen talk about getting government out of their business they don’t mean government money. And when they decry welfare programs, they don’t mean corporate welfare programs.
UPDATE: The AEDC helpfully put together for me the precise list of state contributions. For the record, it follows on the jump:
BIG RIVER STEEL – Amendment 82
Authorized state to issue up to $125 million 20 year general obligation bonds
· $50 million loan to Big River Steel
· $50 million grant for site preparation
· $20 million grant for subsurface stabilization – pilings
· $5 million bond issuance cost
BIG RIVER STEEL STATE INCENTIVES in Addition to Amendment 82
· Tax Back – provides sales tax refunds on building materials, taxable machinery and equipment associated with the project.
· Advantage Arkansas – 4% income tax credit based on new payroll for new jobs for five years.
· Training Funds — $10 million ($5 million Governor’s Quick Action Closing Fund, and $5 million Department of Workforce Services Trust Fund)
· Recycling Equipment Tax Credit — income tax credit equal to 30 percent of eligible recycling equipment costs. These tax credits will carry forward for 14 years.
· Sales Tax Exemption on Utilities –provides full exemption of sales tax associated with the sale of natural gas and electricity.
· Arkansas Development Finance Authority (ADFA) agreed to make $5 million in bridge-gap funding available to Big River Steel. The $5 million assures the $14 million in local incentives (see below) will be immediately available. Mississippi County/Osceola has more than $9 million in the bank for Big River Steel and the remaining $5 million is to be collected by the end of 2014 via a half-cent sales tax for economic development. ADFA’s $5 million simply makes the full $14 million available today.
· $12 million from Mississippi County and $2 million from the City of Osceola.
ARKANSAS TEACHER RETIREMENT SYSTEM
· Trustees of the Arkansas Teacher Retirement System (ARTRS) have approved investment of up to $125 million in system funds in Big River Steel (ARTRS originally announced a total investment of $60 million but recently authorized an additional $65 million investment).