IS THE PORT JUMPING THE GUN ON BIG RIVER STEEL "OPTION?"

"3. Consideration of and action on proposed “Option Agreement to Lease Property” with Big River Steel, LLC, covering approximately 800 acres adjacent to State Highway 48 and the Brownsville Ship Channel, for the construction of a steel production facility."  Item on the agenda of the commissioners of the Brownsville Navigation District for Tuesday, April 24.

By Juan Montoya

By now we have grown  inured to the bells and whistles of grand announcements from different public entities announcing yet another "Great Advance" for the local workforce.

We had the City of Brownsville announce the agreement between the City of Brownsville and private energy provider Tanaska for a $500 million gas-powered electric-generating in Brownsville. The plant was to have been completed in the summer of 2017 and to that end, the Brownsville Public Utility Board petitioned the city commission to increase utility rates – electric by 35 percent – since 2013. So far, more than $90 million is piled up in PUB coffers from the increased rates, and still no plant.

And despite no plant being constructed, the utility rates for the poorest community in the United States remain at the higher levels.

The city, the county, and the Brownsville Independent School District all approved tax abatements as inducements toward the construction of the plant and the increased tax rates promised once it was in operation.

No one told the public in the pomp and fanfare of the public announcement that Tenaska had insisted it had the option of delaying its construction of the plant – and the promised good-paying jobs for local construction and permanent workers – if it couldn't find customers for its 600 MW share of the 800 MWs that would be produced.

Then we had billionaire Elon Musk's SpaceX who promised back in 2011 that he would build the first commercial, vertical-launch pad in the United States if the state, county and city would provide it with tax abatements, incentives, and other inducements to set up shop here. During a visit here, Musk dangled the dream of launching men to Mars from the wind-blow mud flats of Boca Chica Beach.

The launches would start in 2013 and continue as the launches increase, Musk said. He was able to convince the city, county and state to give him $35 million in incentives to bring this "game changer" to South Texas. People ate it up. He saw hunger in the land. Local residents saw their kids climb aboard space ships and hurl off into the solar system.

The carrot? At first, the Brownsville Economic Development Corporation said that as many as 600 jobs paying at last $55,000 each were in the balance. Then the number started coming down. SpaceX's Environmental Impact Statement only promised 250 permanent jobs after 10 years. It did not specify what salaries would be paid.

So far, going on five years later, not one job has been produced for local workers.

So the Brownsville Navigation District will have to pardon our skepticism when we take the announcement of their Tuesday agreement with Arkansas-based Big River Steel for an "option agreement"  to lease 800 of its 40,000 acres in the hope that it might be the site the company eventually chooses for its steel plant.

The plant – the company and the BND assert – would cost more than $1.6 billion to construct.

That is, if the company makes a decision that it will actually selects the Port of Brownsville for the new plant site.

Actually, all the news release says is that Big River Steel will "continue its due diligence pursuant to the company’s interest in developing a LEED-certified steel manufacturing plant, storage and distribution facility."

Nowhere does it say that Big River Steel has chosen Brownsville. And it says nothing about any earnest money coming to the port for offering the 800 acres to the company.

Yet, Port Director Eddie Campirano assured Brownsville Herald reporter Steve Clark that the company has made the decision to come to Brownsville.

"Arkansas-based Big River Steel LLC, which had been mulling the Port of Brownsville as the potential site of a $1.6 billion steel plant identical to one it operates in Osceola, Ark., has selected Brownsville, according to port officials."

“Now all the hard work begins,” said Eddie Campirano, port director and CEO. “This kind of sets the wheels in motion. There’s still a lot of work to be done. A project like this is not going to be easy.”

Still, “they want to be here,” Campirano said.

“They’ve made the decision,” he said. “We have an agreement in hand that says Brownsville’s the place where we’re going to make it happen.”
Well, not really. Big Steel is going to "continue its due diligence..." The way the news release reads it's clear that it has not reached a decision. And a port staff member says that the port was offering the lease, but that negotiations on price, parameters, location, etc..., is still to be negotiated. It could be for $1,000s – or for nothing at all.

But the carrot being offered is very much like Tenaska and Spacex. If – and only if the company decides to come here some time in the future – there might be 500 new full-time local jobs at $75,000 each and 1,500 construction workers would be needed to build the specialized steel plant. Big River Steel might make the decision, the local guys say, "sometime in the middle of the year," or perhaps later.

Even more suspicious is the fact that OmniTrax, the Denver-based company who got a 30-year franchise to take over the port's profitable Brownsville, Rio Grande International Railroad, is credited with facilitating the "option" to lease with Big River Steel.

This is the company which refused to release progress reports on its franchise to let the public know whether it had lived up to its promises in the franchise agreement and appealed its claim of exemption withe the Texas Attorney General.

More cynical people might even say that an announcement two two days into early voting for two positions on the board of commissioners might be seen as a cynical attempt to give the port's administration's candidates a boost, and perhaps a victory, over challengers calling for a new direction there. In fact, we are told that Big River Steel execs specifically told the port administration not to release the announcement until the port elections.

But it sounds good. And we hope for the best. But Tenaska and SpaceX sounded good, too.