Grant Tennille was taking a break at the state Capitol Tuesday near the Rotunda. He was relaxed, which he had not always been these past 2.5 months. Hours earlier, he had watched the House of Representatives vote to take his advice and invest $125 million of taxpayer money in a project that, like any investment, might or might not work.
Tennille is director of the Arkansas Economic Development Commission, so he’s been the most public face — maybe even more so than Gov. Mike Beebe — prodding legislators on the deal to spend those dollars to attract the Big River Steel plant in Osceola. The $1.1 billion plant is expected to employ 525 people making an average wage of $75,000, and that’s not counting the construction jobs needed to build the facility.
Arkansas, like other states, has provided lots of incentives to lots of employers. But this is the first time it has done so through Amendment 82, passed by the voters in 2004, which lets legislators and economic development officials spend really big bucks for really big employers.
If this works, it will enhance Mississippi County’s status as one of the country’s steel-producing capitals. It will lead to more jobs and potentially more factories if other employers follow Big River’s lead.
If this flops, Tennille will get the blame, along with the governor.
“The thought of having to walk around for the next hopefully 50 years with people saying, ‘There goes that Grant Tennille, poor guy. He’s the one that got rooked and cost us all that money,’ I don’t want to live with that,” he said. “Which is why we drove as hard a bargain as we did.”
He first learned of the opportunity early last year when John Correnti, the man putting the steel plant together, approached the state. Then the numbers started flying. The deal looked like it was going to happen by December. In January, Gov. Beebe and Correnti made it public.
That was a long 2.5 months ago. According to Tennille, there was a sense then of, “We are the dog who caught the bus. Now what are we going to do?”
A number of legislators questioned whether that bus was going to run over taxpayers. That $125 million is a lot to spend for a start-up, even though it includes provisions meant to protect the state if Big River doesn’t do what it said it will do. On March 25, legislators, analysts and economic development officials spent five hours talking about the deal. Many legislators were concerned about two studies that made it clear this is a risk, not a surefire money-maker. Meanwhile, the existing steel employer in Mississippi County, Nucor, didn’t like the state giving away money to create a competitor.
Some legislators philosophically questioned if it was appropriate for state government to spend that kind of taxpayer money on behalf of a private enterprise — a viewpoint with which Tennille sympathizes. He said he hates giving money to people so they’ll do what they should do anyway. Arkansas could be the first state to make a principled stand against these corporate incentives. But if it does, Tennille said, it won’t get any more big plants, steel or otherwise.
Throughout the monthslong debate, no legislators were offered anything in exchange for their votes, he said. Instead, they were reminded that these kinds of opportunities don’t come along often and, when they do, they could be located in any part of the state. They could vote no, but the potential employer could be in their district next time.
A few other plants this size are looking at Arkansas now. I asked Tennille what guiding principles would determine whether or not a potential employer gets this kind of big money. Big River Steel has deep pockets and experienced leadership. But this plant involves three features that ought to make anyone pause. It’s a start-up, not an established company. It’s going against an Arkansas tax-paying competitor whose loyalty, if you could call it that, to the state ought to count for something. Finally, it’s close to the border, which means Arkansas taxpayers will fund a project that likely will also employ non-Arkansans.
Tennille said the state will first look at how many people a plant will employ and what kind of salaries it will pay. Proposals ideally will involve employers spending a lot of money on the facility itself so it will be hard for them to relocate elsewhere. Finally, it must satisfy environmental and safety concerns.
Though he has experience in business, Tennille came to the job after serving as Beebe’s communications director — primarily a words and marketing guy. To get comfortable enough with this deal to sell it, he had to rely on a lot of people who know more about it than he does, both inside and outside his agency. So he made a request.
“If you print nothing else, print that I truly have the best team down there that anybody could ever hope for.”
Steve Brawner is an independent journalist in Arkansas. His blog — Independent Arkansas — is linked at arkansasnews.com. His e-mail address is brawnerstevemac.com.