NEW YORK The city of Osceola, Ark., has approved a $2-million incentive for Big River Steel LLC, marking the latest in a series of government-backed financing deals for the proposed flat-rolled steel project.
The Osceola City Council voted this past week on the financing commitment, a council spokesman told AMM, but funds are contingent on certain provisions being met, including the promise of 525 permanent jobs at wages of $75,000 per year.
The move comes on the heels of the Arkansas state legislature giving final approval for $125 million in bond financing to the $1.1-billion project, which is spearheaded by industry veteran John D. Correnti (amm.com, April 16). Last month, the Mississippi County Quorum Court also unanimously approved a conditional $14.5-million grant to the project (amm.com, March 27).
"The city and county incentives are completely in tandem," the spokesman said. "The city will require the same investment from Big River Steel and will have the same clawback provisions as the state and county."
Although the states bond sale has been approved, Arkansas will not invest any money until $300 million in equity from company investors and commitments from other lenders is deposited into an escrow account, a spokesman for the Arkansas Economic Development Commission told AMM in February. In addition, under the terms of the legislation, $250 million of company money must be spent before any bond proceeds can be given to the project.
The city spokesman said that the $2 million, along with some $7 million from the county, will go toward purchasing land for the mill. The remainder of the county grant will go toward infrastructure projects, such as energy lines and transportation routes, he said.
"The state, city and county financing has all been approved by their respective city legislatures. Were completed. Now, its just a matter of Big River finishing its process of environmental and regulation approvals," he added.
Big River Steels proposed 1.7-million-ton-per-year steel mill, aimed at supplying steel sheet to the oil and gas, automotive and electrical industries, is expected to break ground in the fall. While local legislators appear to overwhelmingly support the mini-mill project, others have opposed the mill on grounds that there is already overcapacity in the domestic sheet market, including nearby competitor Charlotte, N.C.-based Nucor Corp. (amm.com, March 18).