Author Topic: Ameristeel approaches city with hand outstretched  (Read 1060 times)


  • Hero Member
  • *****
  • Posts: 5414
Ameristeel approaches city with hand outstretched
« on: January 10, 2010, 05:02:18 PM »
Anyone else see this, for what its worth, I disagree with Abel - No discussion of the secondary impact of the jobs in our area, and all the uses for the money in the area, so I think the story is lacking the other side of the story. Perhaps he can expand, I'll email and recommend he do so:

In today’s distressed economic environment, well-paying jobs are central to any long-term recovery. It is, therefore, no big surprise that a request for financial incentives from Gerdau Ameristeel, a steel mill operator in Baldwin, would be met with grudging acceptance in Jacksonville’s City Hall.

The company, whose largest shareholder is Brazilian steel giant The Gerdau Group, employs roughly 300 locally and generates about $1.3 million in taxes for Duval County.

In legislation filed with the City Council, the company asks for a five-year exemption of the public service tax on electricity, which would amount to nearly $3.5 million, according to estimates provided by JEA. Assuming that no new jobs would be created at the plant — and none were noted in the original bill that was filed — that would equate to $11,667 for each job the city retained or $2,333 per job per year.

The legislation proposed to the Jacksonville City Council says that the high cost of doing business in Jacksonville has forced Ameristeel to shift operations to other plants in Tennessee and New Jersey.

News reports, however, seem to call those statements into question.

According to a June 2009 report in the Tampa Bay Business Journal, Ameristeel suspended operations at one of its New Jersey plants and shuttered the other one. If the company was truly shifting jobs from Jacksonville to New Jersey as the legislation claims, those plants should have seen an increase in business.

Ray Holt, the Jacksonville city councilman who represents the district the plant is located in and proposed the Ameristeel legislation, says the company has secured incentives in New Jersey and now plans to reopen one of the plants.

After closing a mill in Oklahoma and offering severance packages to several hundred workers late last year, news reports say Ameristeel is now considering reopening that plant if officials offer incentives.

The company also received incentives in Iowa and North Carolina.

In an effort to retain and add jobs locally, the Jacksonville Economic Development Commission awarded Ameristeel $3 million in incentives in 2005. According to the development agreement signed with the city, the company agreed to retain 281 jobs and add four. The company also promised to invest $80 million in upgrading its local facility.

The city of Jacksonville assisted Ameristeel in securing $25 million to finance those upgrades in low-interest bonds. Ron Barton, the JEDC’s executive director, anticipates the company will have met the $80 million investment requirement by the end of this year, making it eligible for the $3 million in previously promised incentives.

In 2005, the company said the average wage at its Baldwin steel mill was $50,000. The legislation filed with the Jacksonville City Council just before the Christmas break says that the average is now nearly $87,000 — a significant increase during a deep recession.

The Tax Foundation, a nonpartisan tax research group based in Washington, paints a much more positive picture of Florida’s business climate than the legislation submitted to the Jacksonville City Council. In its 2010 Business Tax Climate Index rankings, Florida finishes fifth. Tennessee and New Jersey, the states where the Ameristeel legislation says the company has been forced to shift business to, ranked 22nd and 50th, respectively.

Holt has asked for the legislation to be put on hold for several weeks while Ameristeel provides the city with data that shows the cost of doing business in Florida is prohibitively higher than other states.

While the effort to keep jobs in the city was no doubt well meaning, the request for additional taxpayer dollars should have never been submitted without accompanying data to support the claims made.

Ameristeel has invested nearly $80 million in upgrading its Baldwin plant. In return, taxpayers have agreed to award the company $3 million. Do we truly believe the company will abandon that investment if it doesn’t receive additional monies?

Incentives have a time and place, but there should be limits.

The city has already surrendered millions to retain 300 jobs. Without a solid commitment from the company to deliver hundreds more, Jacksonville taxpayers shouldn’t be asked for more.
And, that $115 will save Jacksonville from financial ruin. - Mayor John Peyton

“This is a game-changer. This is what I mean when I say taking Jacksonville to the next level.”
-Mayor Alvin Brown on new video boards at Everbank Field