St. James seeking additional bonds for NuStar project

Published 12:00 am Wednesday, January 26, 2011



VACHERIE — Nearly a month after approving the issuance of about $85 million in Gulf Opportunity Zone Bonds to NuStar Logistics, the St. James Parish Council unanimously voted in favor of a second agreement to grant an additional $150 million in GO Zone revenue bonds for construction of the firm’s St. James terminal on the west bank of the Mississippi River.

Parish spokesperson Melissa Wilkins said NuStar is taking advantage of an extension for application for the low-interest federal revenue bonds. The money will help the energy firm fund construction of the first phase of expansion at its St. James facility.

The planned expansion project will double the size of the tank farm from 4.8 million barrel capacity to about 9 million barrel capacity, adding 24 tanks of various sizes to the facility’s footprint. This latest request for GO Zone bond money will supplement the manufacturer’s storage expansion project, said Jean Zeringue, NuStar area terminal manager.

Wilkins said this was the fourth time NuStar has come before the parish council seeking GO Zone bonds. A public hearing on the preliminary agreement approved Wednesday will be held at the next council meeting in Convent.

The council must then approve an ordinance to authorize issuance of the bonds, and the State Bond Commission will then decide whether to approve or disapprove the additional money.

The GO Zone bonds were created by an act of Congress as a way to jumpstart economic growth in the region following hurricanes Katrina and Rita in 2005.

The bonds would be issued as fixed rate bonds bearing an interest rate not to exceed 10 percent per year with a 30-year maturity date.

This first phase of expansion at NuStar, which is expected to be up and operating by August 2011, will bring about 400 new jobs to the St. James Parish region.

In other action from the meeting, the council unanimously approved a motion giving preliminary approval for the issuance of up to $2.5 million in limited tax certificates from the parish for construction of a 15,000-square-foot medical office building adjacent to the St. James Parish Hospital in Lutcher.

Wilkins said the new office building will provide space for rotating clinics conducted by a dozen visiting specialists from Baton Rouge, New Orleans and Gonzales. A covered walkway will link the existing hospital facility to the new medical building.

Money in the hospital reserve would cover half of the construction costs, with the remainder coming from the $2.5 million in future revenue from the tax certificates.

Wilkins said the state Bond Commission must approve the issuance of the six-year, 4.75-mill property tax renewal. The original property tax was authorized at an election Sept. 30, 2006, to provide construction funds for the hospital and lasts through the year 2016 at 5-percent interest, Wilkins said.