Wednesday, February 13, 2013 —
The man behind the failed Clean Tech plan in Stanly County and Lowndes County, Miss. now trumpets a $1.1 billion steel mill for Mississippi County, Ark.
Big River Steel LLC is headed by John Correnti, the same man who headed Clean Tech.
The Arkansas Senate questioned Gov. Mike Beebe last week about the funding plans for Big River’s new plant proposed under the state’s Amendment 82, which was passed in 2004.
This is the first time the amendment has been used and allows the state legislature to approve up to 5 percent of the state’s general revenue budget to be used for bonding of super economic development projects.
Should the proposal pass legislative muster, Big River Steel LLC will receive a $50 million loan from the state; $50 million for site preparation; $20 million for costs associated with subsurface stabilization; and the $5 million bond insurance cost.
The state will also give incentives including sales tax refunds in building materials, taxable machinery and equipment; a 4 percent income tax credit based on new payroll jobs for five years; $10 million from the Governor’s Quick Action Closing Fund; $5 million for training services; income tax credit for recycling equipment; sales tax exemption on utilities; $12 million from a half-cent sales tax in the county to be used for infrastructure needs; and $2 million from the city of Osceola.
The company and state are touting an employment roll of 525 people for the mill Big River says will produce flat roll steel and low alloy, high strength steel.
In his testimony before the state senate, Arkansas Economic Development Com-mission (AEDC) Executive Director Grant Tennille said if Big River does not meet its employment and investment claims within 15 years the state could take back its money.
He also said if the state agrees to the bonds, they would not sell them until investors put $300 million of their own money in escrow and secure financing for the other $700 million.
It was an escrow requirement that caused Correnti’s deal to build a plant in Mississippi to be tossed aside.
The county there had asked for $150,000 to be placed in an escrow account by Jan. 1 and the deadline was missed.
Lowndes County Board of Supervisors President Harry Sanders now says taxpayers there are out $250,000 and predicts the Arkansas mill will not be built.
“John Correnti and this group have a history of speaking of great big, huge projects that never happen,” Sanders said.
Joe Max Higgins, CEO of the Columbus-Lowndes Development LINK in Mississippi, went a step further when he spoke to the SNAP last month.
“These guys are bad, bad, bad dishonorable people,” Higgins said.
Correnti’s groups have posted a high number of failures over the last few years.
A silicon plant in Mississippi lapsed when funding could not be arranged.
A $175 million steel rebar project in Mississippi had a groundbreaking, but the project was never finished due to lack of funding.
Ontario, Ohio never saw a $275 million silicon plant when Correnti decided to take the plant to Mississippi.
Tennille said despite all the problems in deals with Correnti, the state feels those problems were the result of plants that were outside of Correnti’s experience in steel.
Arkansas legislators will have 20 days to make a decision on the funding requests once the bill has been formally introduced.
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