UTILITIY'S COUNTEROFFER KEEPS STEEL MANUFACTURER AT HOME

Mitch Robinson, executive director of the Cape Girardeau Area Industrial Recruitment Assocation, has no misgivings about the incentive package put before Arkansas Steel Associates. Earlier this week, the company decided not to take part in the $60 million Nash Road redevelopment project.

"Arkansas Steel was given an attractive power-rate offer from Union Electric," Robinson said. "What Arkansas Power and Light was initially going to give them wasn't nearly as attractive."

But the counteroffer by Arkansas Power & Light was good enough to keep Arkansas Steel and Associates from leaving their home base in Newport, Ark.

That essentially killed the Nash Redevelopment Project, which required a major investor to make it a reality.

Arkansas Steel Associates is now awaiting approval from a Newport, Ark., public service commission for the latest proposal by Arkansas Power & Light. "All that's left is for the fat lady to sing," Robinson said.

"I don't anticipate the public service commission doing anything but giving its approval."

That feeling was shared by Arkansas Steel Industrial Relations Manager Dan Haygood. "The service commission has never failed to approve a proposal from us in the past," Haygood said.

Arkansas Steel began looking for an alternate site because the power rates from Arkansas Power and Light were becoming too costly.

"We use a tremendous amount of power," Haygood said. "They would send us one bill that was read from a meter in another portion of the state. It was just getting to the point where we were not going to be able to have a reasonable profit."

Interestingly enough, Cape Girardeau would have given Arkansas Steel more transportation outlets. The proposed site, located south of Nash Road, west of Interstate 55 at the southern boundary of Cape County, would have offered transportation by way of railroad, river, highway and airport.

"Right now we only have rail and trucking for transportation," Haygood said. "The river that is next to the plant is not navigable all year round. We're hoping that will change in the future if Congress would pass an approprations bill to dredge the river to make it more accessible."

Robinson said the offer made by the Cape Girardeau County TIF Commission was good enough to land a company like Arkansas Steel.

"I felt like we put together a very good proposal and had great teamwork with the County TIF Commission, Missouri Department of Economic Development and Chamber of Commerce. It was a good-looking project from the very start, but sometimes these things just don't work out."

The redevelopment area qualifies for tax increment financing (TIF) because it is classified as a blighted area under Missouri's Tax Increment Allocation Act. Because no street layout, water supply or sewers exist, the area is deemed blighted.

Asked if he felt Cape Girardeau was being used to get Arkansas Power & Light to provide a better utility package, Robinson replied, "I guess you can always become a Monday morning quarterback and speculate on that.

"I really think that we were being taken seriously from the start. We wouldn't have gone through all the hoops we went through if we didn't think they were serious. But there were other considerations. When you're talking about moving a multi-million dollar company hundreds of miles, there are added costs to consider."

Cape Girardeau wasn't the only city Arkansas Steel was considering, Robinson said. "They were looking into moving to Kentucky, but we became the front-runner and were given serious consideration the whole time," Robinson said.

Haygood said Cape Girardeau was being taken seriously by Arkansas Steel from the beginning.

The plan was to develop a 383-acre tract of land near the Cape Girardeau Regional Airport. Private redevelopment costs for the Nash Road Redevelopment project included building an industrial complex for $22.4 million, site improvements for $2.3 million and purchasing or transferring equipment with a value in excess of $34 million. The project would have brought 200 full-time jobs.

"It was the biggest project I worked on since coming here just over a year ago," Robinson said. "It would have been a big boost to this area because those were good jobs paying $14 an hour. There was also the benefit from property tax for several entities in the taxing jurisdiction."

The Cape Girardeau Public School district, which has a tax rate of $2.87 per $100 of assessed valuation, would have benefited the most from the property tax.

The Cape County Special Road District, Senior Citizens Board, Sheltered Workshop, Riverside Library and the Cape Girardeau County Health Department also would have benefitted from the property tax generated from the development.

Robinson said he hopes to be part of another redevelopment project on the 383-acre site in the near future. "We've got other projects that we're working on, and hopefully we'll find someone who is interested in the one we worked so hard to get," Robinson said.

"The factors are all there. We just need to find another company that is willing to sit down and talk about this development. It may not be a company of the same size, but we've got the kind of team that could make it happen."