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Nucor Corp., the nation’s largest steelmaker plans to build a multi-phased $3.4 billion iron and steel production complex in Convent, LA that that eventually could employ 1,250 workers, Nucor and Gov. Bobby Jindal have announced. The jobs are projected to pay an average of $75,000 per year plus benefits.
“This is a huge win for our state and will ultimately be one of the largest industrial projects in Louisiana history,” Jindal said.
Nucor has acquired 4,000 acres for the project on the east bank of the Mississippi River in St. James Parish. The first phase of what is planned to be a five-phase project is a $750 million “direct reduced iron” plant employing 150 people. Construction will begin once the company receives a new air quality permit from the Louisiana Department of Environmental Quality. Nucor Chief Operating Officer John Ferriola told the New-Orleans Times-Picayune he hopes that goal can be reached this year.
The plant would be completed two years after receiving the permit, Ferriola said. The building of the first phase will create 500 construction jobs. The additional phases of the project, if Nucor decides to pursue them, could come in any order. The other phases are: a second direct reduced iron facility costing $400 million and employing 100 workers; a $500 million pellet plant with 200 jobs; a $1 billion blast furnace and coke ovens with 300 jobs; and a $750 million steel mill employing 500.
An economic impact analysis by Louisiana State University estimates the overall project would generate $563.5 million in new state tax revenue and $122.6 million for St. James Parish through 2033. The Nucor complex would have a ripple effect of 4,800 indirect jobs, the LSU study said.
The core of the state incentive package to lure the Nucor project is a pledge of $160 million in grants and forgivable loans that would be spread over the five phases. That pledge includes $30 million drawn from the state capital outlay budget that would be awarded to Nucor to cover some of the company’s costs in buying 4,000 acres of land for the site. The plan is for the parish eventually to hold title to the land and lease it at nominal cost to the company. The Legislature already has approved up to $65 million in capital outlay spending for the project.
Another $30 million would come from the state’s mega-projects fund in the form of a loan that would be turned into a grant if Nucor builds a second phase of the complex. The rest of the $160 million is tied to additional phases. Nucor also wants to use $600 million in tax-exempt Gulf Opportunity Zone bonds that is expected to be authorized by the State Bond Commission in its meeting Thursday.
A property tax exemption of about 20 years will be extended to Nucor through the local government. Nucor will make an annual payment in lieu of taxes to support the local school system, parish and sheriff. The payments will begin at $850,000 per year and increase to $4.5 million per year if all project phases are completed according to timelines in the state deal.
The company will be eligible for cash rebates for each hire under the state’s Quality Jobs program. Rebates are also offered for sales tax on construction work.
All four of the additional phases must be initiated by 2015 for the company to receive the full value of the state incentive package. If all phases are executed according to the state contract, the complex would reach peak employment of 1,250 by 2019. The overall state incentive package for five phases is valued at about $125,000 per job.