St. James council agrees to issue revenue bonds for Nucor

Published 12:00 am Wednesday, October 13, 2010



CONVENT – The St. James Parish Council agreed to issue $600 million in revenue bonds to help finance the first phase of construction of a steel and iron manufacturing facility in Convent.

The council approved issuance of Gulf Opportunity Zone Bonds through the parish but at no expense to the parish. The bonds are part of a lucrative incentive package from Gov. Bobby Jindal’s administration that helped lure Nucor Corp. to Louisiana.

Parish bond attorney Hugh Martin told the council the parish would only serve as a vehicle for the bond so it is essentially tax free to the bond purchasers. Martin said Nucor is on the hook to repay the $600 million loan.

Martin said the bond purchase must also be approved by the State Bond Commission, which will meet Oct. 21. He said the commission had already given preliminary approval in a meeting in September.

The low-interest, tax free GO Zone bond program is part of funding set aside by Congress following hurricanes Katrina and Rita. The bonds are designed to help generate economic development in southeast Louisiana following the two storms.

State and parish leaders waited two years for Nucor to make a decision on sites in Brazil and St. James Parish before Jindal announced last month that Nucor planned to bring the five-phase facility to Louisiana. The announcement ran up close to a deadline for use of the GO Zone bonds, and there was pressure from the Bond Commission concerning whether the $600 million loan could continue to be set aside for the construction project.

The bonds will finance construction of the first phase of the project, a $750 million direct reduced iron facility, which could begin construction within the next two years. The facility uses natural gas to refine raw iron ore into pure iron by removing an assortment of contaminants through a heating and cooling process. The pure iron pellets are used in materials manufactured at Nucor steel mills across the country.

St. James Parish President Dale Hymel Jr. said the GO Zone bonds must be closed and delivered by Dec. 31.