Steel mill incentives now top $1 billion; Louisiana awaits firm's decision today
BYLINE: By Robert Travis Scott, Capital bureau
BATON ROUGE -- Louisiana will find out early today whether an incentive package some lawmakers say has grown to more than $1 billion is enough to lure a massive steel plant to a site along the Mississippi River in St. James Parish.
The board of German corporation ThyssenKrupp AG is expected to announce whether Louisiana or Alabama is the winner in the high-stakes competition for the $2.9 billion steel mill that will employ 2,700 people.
The company had narrowed its choice to a site near Convent or another north of Mobile, Ala., for a coveted economic development mega-project that will change the face of the region where it is built.
In addition to tax breaks and job-training costs, three lawmakers said Gov. Kathleen Blanco has informed them that the state also has offered the company about $1 billion for site infrastructure improvements and other incentives, including a bill that passed the House on Thursday at her request that brings the state's cash commitments to $400 million.
The money would have to be appropriated from the state budget or borrowed, setting up another potential big-ticket decision for the Legislature during the current session, they said. The lawmakers asked not to be identified.
24-hour window
Blanco spokeswoman Marie Centanni said she could not comment on the governor's offer to the company because the competition is not yet over. Centanni said the $400 million for infrastructure costs that the governor persuaded the Legislature to allocate to the plant is meant to "help us recruit the project," but that the governor has never said that was the limit of the incentives package.
Sen. Robert Adley, D-Benton, said Thursday that ThyssenKrupp had negotiated memorandums of understanding with St. James Parish and an energy company over the cost and provision of gas and sewer and water service for the steel plant. The German company on Tuesday asked officials with the parish and the energy company whether they would be willing to sign the memorandums within 24 hours after Friday's announcement, and the officials agreed, Adley said.
That interaction was a positive sign for Louisiana's chances to get the plant, Adley said.
Adley, who provides regulatory and consulting services to St. James and other Louisiana parishes, said he has visited ThyssenKrupp officials in Germany and helped draft the memorandums.
Ready to travel
The company's supervisory board was scheduled to begin discussions at 2 a.m. Central Daylight Time and is expected to post its decision immediately after the meeting ends, which will probably be about 6 a.m.
Top executives with the company stationed themselves Thursday in Mississippi and were ready to travel this morning to the winning state for a news conference.
Whatever the outcome, Blanco is planning a news conference today in Baton Rouge.
Both states are offering incentives packages in the form of infrastructure improvements, tax breaks and job-training programs. The governor has said Louisiana's strongest asset is the Mississippi River, which can handle oceangoing ships delivering material directly to the plant site in Convent. At the Alabama location, ships would have to offload to barges for further transport to the plant.
Still, Louisiana faces tough competition against Alabama, whose economic development agency this week was named the best among all states by Site Selection magazine. Alabama's package of incentives includes an income tax break that could pay for most of the construction costs of the plant.
Soft soil site
Also, the Convent site is on soft soil requiring thousands of deep-driven pilings, and the location needs major improvements to roads, the port and power lines to accommodate the sprawling factory.
The Louisiana House of Representatives voted 101-0 Thursday to steer $100 million toward the project, bringing the state's known cash commitment for the facility to $400 million.
House Appropriations Committee Chairman John Alario, D-Westwego, pitched the measure as an act of "good faith" hours before the supervisory board of the ThyssenKrupp Group meets in Germany to choose between the two sites.
Alario said the bill represents one last pitch that Alabama can't match, because its public $400 million commitment hinges on voters there approving a constitutional amendment to raise the state's bonding authority. That referendum does not take place until next month.
"We can show them the money is there now and ready to be spent," Alario said before the House vote.
Expanded incentives
The Legislature first set aside $300 million in an economic development fund during a December special session. Gov. Kathleen Blanco asked for the additional $100 million after Alabama Gov. Bob Riley made public his $400 million bond proposal.
In addition to the bonding authority amendment, Riley this week signed new incentives legislation expanding existing 20-year state corporate income tax credits to 30 years and property tax breaks from 10 years to 20 years. The package also carved out a decade's worth of utility tax breaks.
Should ThyssenKrupp choose Alabama, Alario's bill requires that the economic development fund created in December be liquidated and the money returned to the state general fund budget.
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Staff writer Bill Barrow contributed to this report.
Robert Travis Scott can be reached at rscott@timespicayune.com or (225) 342-4197.