A key financing peg of steelmaker Nucor's plan to build a major iron and steel plant in St. James Parish won preliminary state approval Thursday, marking a first step forward on one of Louisiana's biggest industrial deals ever.
Nucor announced a day earlier that Louisiana had won the massive project after years of wooing the manufacturer. Once complete, the project to be built between New Orleans and Baton Rouge could total $3.4 billion and create hundreds of jobs.
The Bond Commission agreed without objection to let Nucor use $600 million in tax-free hurricane recovery bonds for construction costs through the Gulf Opportunity Zone program. Another commission approval will be needed, after its staff reviews the bond sale details, before they can be sold.
But neither the final bond approval nor any of the other authorizations needed by state officials to complete the financing arrangement for the first phase of the project is expected to face any trouble.
"I would not anticipate any resistance. This is a huge project for Louisiana with a tremendous number of high-paying jobs," said Senate President Joel Chaisson. "We need to find a way to make this happen, and we will."
If all five project phases are built, a total of 1,250 jobs would be created at the plant. The company said the jobs would pay an average of $75,000 per year plus benefits.
The GO Zone bonds, which are given a special borrowing status so businesses can borrow money more cheaply, are one piece of a multi-layer state incentive package that includes grants, loans and multimillion dollar tax breaks.
Economic Development Secretary Stephen Moret said the state has offered $160 million in loans and grants over six years if all five project phases begin as scheduled. That's on top of the $600 million in GO Zone bond capacity and a series of state and local tax breaks.
Moret said he'll be seeking Bond Commission approval next month to give $30 million from the state construction budget to Nucor.
The first phase of the project is a $750 million direct reduced iron facility that will create 150 jobs. Future phases, according to Nucor, will include a second DRI facility, a pig iron blast furnace, coke ovens and later a steel mill itself.
The Charlotte, N.C.-based company must modify its state air and water quality permits that already have been granted for the proposed blast furnace before work can begin on the DRI project.
Nucor officials said they hope to have the permit changes by the end of the year and then expect it will take two years before the first facility is running.
