The Senate is meeting this afternoon for a Q&A on the $1 billion Big River Steel Mill, which will require $125 million-plus in state loans, grants and inducements.
David Ramsey is going to send some notes before long.
So far, Twitter traffic indicates some talk about an effort to entice the plant to Central Arkansas that didn't work out and an extended brief for the state's invesment by George Hopkins, director of the Teacher Retirement System, which will have a 20 percent equity stake. Sen. Joyce Elliott inquired about Koch Industries, which will have 40 percent of the deal.
David Ramsey's notes follow:
* Gov. Mike Beebe spoke briefly, no questions. “We welcome in-depth analysis…the ball is in your hands.”
* Sen. President Pro-Tem Michael Lamoureux said consultants are being chosen to do independent analysis.
* Economic Director Grant Tennille: clawback period of state investment is 15 years, the longest clawback they’ve ever negotiated and longest he’s heard of. If Arkansas hadn't struck a deal, a neighboring state would have taken it.
Will the 525 jobs go mostly to Arkansans? Will some non-Arkansans be hired?
Tennille: “I think Mr. Correnti said when we announced it that he thinks his need to bring in management and people he’s already worked with in the past is limited to about 20. Now—there is nothing legally that we can do to prevent the company from hiring a Tennessee resident or a Missouri resident to go work in this mill. One of the things that will help, the location is further from the river crossing than other mills in northeast Arkansas. But most importantly every person who works in that mill will be an Arkansas taxpayer…regardless [of where they live]."
* Sen. Joyce Elliott asked: "There’s been rather high profile coverage about the investment of the Koch brothers. Is that just a purely straightforward investment, or are particulars that we need to know?"
Tennille: "It is pure investment. They will be investing on the exact same terms that the Arkansas teacher retirement system will be investing. Now having said that, their involvment has given all of us some confidence through this process. They are obviously involved in a number of different industries. They are not in business to lose money. The fact that they see this as a good investment has raised our hope."
Tennille says job figures are conservative:
"We have a steel mill announced in the early 90s…was announced with 345 guaranteed jobs attached to it. There are now close to 1,400 people working at two mills. Deal structured in Mississippi was for 400, we believe they’re now at 700. The deal that was announced in Mississippi was announced at average rate of $70,000 a year. Last figures we saw they’re paying an average rate of $93,000… All the figures that we have and have shared are based on those 525 jobs. This investment, we believe, is going to lead to a much higher level of employment in northeast Arkansas. But the clawbacks are based on those jobs."
... "We did everything we could to try and make it central Arkansas site…we figured the further we could get from the border, the more likely we were to have 100 percent of employment. In the end there were logistics and infrastructure issues that we couldn’t overcome…Mr. Correnti is committed to trying to ensure that Arkansans are as close to 100 percent of employment as we can generate. As part of our agreement with the company, they have agreed that $250 million of the construction purchasing will come from Arkansas companies…that will be audited just like everything else."
* Sen. Eddie Joe Williams asked about the competition and whether that competiton was in Arkansas
Tennille: "Correnti spoke at the press conference about the fact that they believe there will be 20 percent overlap in their product and Nucor’s product. I had heard from Nucor that they think that that percentage may be low. I will also say that in order for Mr. Correnti and his investment group to maximize their return they have every incentive to make the investments and do the work to move quickly into those higher grade steels and there is no competition in the state of Arkansas for those higher grade steels."
Williams: “…we’re going to lose employees in one location to add in another? That’s my concern.”
Tennille: "My response to that, if this thing is not built in Osceola, Ark, it’s likely to be built on banks of Mississippi River in Mississippi, liable to be built in Louisiana, Oklahoma, or Tenneseee. Competition in the marketplace is going to be there regardless of whether the mill is built in Osceola, Arkansas or not. Therefore I would say, I have some concern in the direction that you’re talking about but it’s mitigated by the fact that I’d rather have the thing built in Oseola and have that impact than I would have it built in Columbus, Mississippi and have the exact same impact."
70%--it doesn't autostart for me. Maybe it is a setting on your computer or browser…
Damn Cato, I could have gone all night without that. Here's something super cool. Ever…
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