PORT BOOSTERS OF BIG RIVER STEEL PLANT PROVED WRONG

(Ed.'s Note: The decision by Big river Steel to expand their plant in Osceola, Ark., instead of building a new $1.6 billion plant at the Port of Brownsville was made June 29, a week ago. Yet, the neither the commissioner nor the administrators at the Brownsville Navigation District saw fit to tell the public about the decision. Contrast this to the fanfare with which the announcement was made April 24 that the company had agreed to a lease option of 800 acres at the port, which apparently, was something initiated by OmniTrax, the 30-year franchise holder of the port's railroad. Why? Read on and make your mind up for yourself.) 

By Juan Montoya
Scratch another fake accomplishment by OmniTrax and the Port of Brownsville Commission.

Even before Osceola, Ark.-based Big River Steel had decided where it would build a second plant that cost $1.6 billion, OmniTrax and the commissioners inked an option to lease deal with much fanfare to announce the steel maker would enter into an agreement with the port that would secure 800 acres of property to the company.

“This is good news for Brownsville and the result of hard work by many individuals and organizations over a long period of time. Our rail partner OmniTRAX played an important role in introducing this opportunity to the port,” stated John Wood, then-Chairman of the BND.

The deal was inked on April 24. About two months later, on June 29, the company announced that it was staying put in Arkansas and increase its investment there by $1.2 billion.

There is some irony in this. The Mexico-imposed tariffs of 25 percent on U.S. Steel in retaliation to for the 25 percent tariffs on Mexican products that included steel appliances would have wiped out any profit margin the company might have had coming down to the border.

And the Sate of Arkansas' generous incentives for the company to stay there with the 500 jobs at a $75,000 salary also played a role. Senate Bill 688 passed just last year allows for Big River Steel to receive millions of dollars more in tax credits annually for expanding in Arkansas.

The legislation was signed into law by Gov. Asa Hutchinson as far back as in April 2017. According to the Department of Finance and Administration, SB 688 would lead to a reduction in state revenue of up to $11 million per year for qualifying expansion projects.

The results of that legislation was not missed by Hutchinson in comments included in the press release announcing the expansion in Arkansas instead of building  anew one at the Port of Brownsville.

“When Big River Steel chose Arkansas as the site of its new plant, it was the largest economic development project in the state’s history,” said Governor Asa Hutchinson. “Our state’s pro- business climate has led to the company deciding to expand here. That means even more jobs and more investment in Arkansas.”

On April 24, less than 10 days before the May elections for the Brownsville Navigation District, the port and OmniTrax announced that Big River Steel had signed an option to lease 800 acres for a potential plant.

Comments by port officials to the local daily brazenly asserted that Big River Steel had signed on the dotted line and agreed to come here. It came under the headline:

  Steel company selects local site

"The development was reflected in a unanimous vote by the Brownsville Navigation District board, during a special meeting Tuesday, to give BRS the option to lease 800 acres between the Brownsville Ship Channel and S.H. 48 on which to build the facility. The BND is the port’s governing body.

“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, we guess it didn't really mean that, did it? But it sure sounded nice. Now there is even some cynical talk that the announcement was made by the port commissioners against the wishes of the company who had requested that it be made after the elections.

"They told the commissioner they didn't want the announcement made before the May 5 elections because they didn't want to get involved in local politics," said a source close to the commission.

Nonetheless, then-Chairman John Wood, then seeking reelection against challenger Cesar Lopez,  made the public announcement June 24, he said. Wood won by 262 votes.

In the port's press release on the lease option for the 800 acres, Wood stated:

“The addition of 500 new full-time local jobs, and the impact of those jobs in terms of retail spending, services, and new housing impacts represent a transformational moment for Brownsville and the Valley,” Chairman Wood continued. Wood expects up to 1,500 construction workers would be needed to build the specialized steel plant."

So what was it? The Arkansas incentives, the Trump tariffs, OmniTrax ineptness and dishonesty, inadequate State of Texas incentives, the premature release of the lease option agreement, or all of the above?