Lowndes Co. may lose steel project to Noxubee
Published 4:42 pm Thursday, January 25, 2007
A hundred jobs originally earmarked for Lowndes County may be going south, victims of a funding dispute between the county and the financial backers behind SeverCorr.
The $120 million project known as “Project Green” — a proposed steel mill located on 90 acres — is expected to employ about 100 people at jobs paying $50,000 a year plus benefits.
The project now could go to Noxubee County because of a “bait and switch” tactic employed by Lowndes officials, say the project’s financial investors.
Officials with Global Principal Partners, the financial group behind SeverCorr, Project Green and Project MISTC (Mississippi Steel Technology Center), claim the Columbus-Lowndes Development Link promised $3.25 million and the county committed to a $2 million grant, for a total of $5.25 million to help fund MISTC, but the Lowndes County Board of Supervisors is sticking by an offer of $1.5 million, which comes from the grant.
MISTC, which is located on the SeverCorr site, includes SeverCorr suppliers, customers and service companies that are here because of SeverCorr, and the county doesn’t want to pay for companies it’s already paid for by funding SeverCorr, said Board of Supervisors President Harry Sanders.
However, in October, Link officials committed, in writing, to a $5.25 million incentive package for MISTC, said Dave Stickler, an official with Global Principal Partners.
“As part of that package, Harry Sanders and the other board of supervisors members supported the $5.25 million package for an entity being formed to create 400 jobs and bring $200 million in investments,” Stickler said of SeverCorr, which supports Project Green “from a conceptual framework (and) a synergy perspective.”
“It’s very simple, very clear,” he said, noting the $5.25 million offer was “downed from an initial (verbal) proposal of $12 million.”
Saying county officials initially offered “infrastructure support to get the site prepared so we can collectively attract companies down here,” Stickler said Link and county officials “stood in front of the CEOs and executives of eight or nine major customers and suppliers of SeverCorr” slated for MISTC last fall, and promised $5.25 million.
“(Officials) said this county is a great place to do business,” Stickler said. “The CEOs went back to their boards and companies and made an investment decision to put $200 million in this county.”
Ten days ago, the supervisors changed the offer, Stickler said.
“Our original proposal to them, which the Board of Supervisors blessed, the only proposal we’ve blessed, is we would get a Community Development Block Grant for $2 million, said Sanders, noting the county agreed to pay the required 10 percent match — $200,000 — and contribute an additional $50,000.
“We said we would take $500,000 of the $2 million grant and use the money to overlay Industrial Park Road, which would leave MISTC $1.5 million to do water and sewer improvements,” Sanders said. “That’s what we said we’d do and we’ll still do that.”
Sanders said the supervisors originally were asked for $10 million, but denied the request.
The request then was “cut to $5.1 million,” Sanders said, but work was prematurely completed on a railroad, which “disqualified $2 million.”
“They jumped the gun and did some work,” he said. “You can’t use grant money to pay for something already done.”
Stickler said Sanders told him and other company officials, the county didn’t need to offer incentives for MISTC because “these companies will come here anyway.”
“I haven’t said that, but it’s true,” said Sanders. “We’ve already paid for those companies; we’ve already given the incentives to SeverCorr because these companies are coming. We’ve offered them incentives.”
“Why should the county put in more money than the state? We’ve offered them incentives; we don’t think that we need to give them anymore. Percentage-wise the county has already given them more than they should, compared to anybody else. We’ve already paid for those jobs once; we don’t need to pay twice.”
Although Project Green is a separate entity, the steel project investors see the county’s offer as a “bait and switch” tactic, leading them to consider Noxubee County as a more desirable location.
“The board of supervisors may be correct,” Stickler said. “Companies will come anyway. But there are crossover involvements with Project Green. We’re not going to get burned twice. The county has already begun to backtrack on commitments made to Project Green, including full access to a 90-acre site. Project Green is not going to be put in the same position as MISTC (with the funding dispute).
“The (investors’) reaction was very, very serious,” Stickler said of the decision to pull Project Green, which he acknowledged is a separate entity from SeverCorr and MISTC. “Why are we putting $200 million in a county where terms like bait and switch will be used?”
Stickler said originally 90 acres was committed for the Project Green site, but that number was reduced with the sale of some land to another company.
“Project Green was more than willing to be cooperative to facilitate economic development in the area,” he said. “But it’s awfully difficult to convince investors to commit and project sponsors to put $120 million on the ground (now).”
Sander said Project Green “is in its very infant stage and we don’t know what’s involved in it.”
“It’s very complicated; it’s not simple. We told them what we’re going to do and we’ll stick by what we’re going to do.
“Project Green doesn’t have anything to do with Project MISTC,” Sanders said. “It’s a whole separate project. Everything we’ve promised on Project Green, we’ve committed to do. I don’t know why they said we’re not going to (do it).”