ENR reported today that Big River Steel, LLC plans to build a $1.1B US plant that will convert scrap steel to new steel. Located on the Mississippi River, the plant will employ 525 workers. This is the type of exciting project I wrote about in my previous post.

As I stated there, the construction costs are high, but the number of workers isn’t, due to extensive automation. The developers pitch that their average salary for worker will be $75,000 per year. So I’m thinking there aren’t too many laborers on site.

ArkansasBusiness.com reports the following on the state funding offerings:

For the Big River project, the state plans to provide $125 million for start-up costs: a $50 million loan to the company, $50 million for site prep, $20 million for piling and $5 million for bond insurance.

Other state incentives include:

• sales tax refunds on building materials, taxable machinery and equipment used in the project;
• 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 from the Department of Workforce Services Trust Fund to be used for training;
• an income tax credit for recycling equipment equal to 30 percent of eligible recycling costs that will include legislation that could extend the credit from three to 14 years;
• and a sales tax exemption on utilities that will include legislation to fully exempt sales tax associated with the sale of natural gas and electricity.

Mississippi County is providing $12 million from a half-cent, industrial development sales tax to be used on infrastructure needs including gas and sewer lines and purchasing the land. The city of Osceola is pitching in $2 million.

It’s fascinating to see how these mega-projects come together. The public private partnerships really do seem to make sense in both directions.