Cost to lure mill revealed

• By GARY PERILLOUX
• Advocate business writer
• Published: Apr 3, 2008 - Page: 7A - UPDATED: 12:05 a.m.

• Print
• Email
• Save
• Share

• Del.icio.us
• Digg
• Facebook
• Reddit
• 

When Louisiana narrowly missed winning a $4 billion ThyssenKrupp steel mill project in May, then-Economic Development Secretary Michael Olivier said much of the credit for almost gaining the project that went instead to Alabama lay with the Baton Rouge office of URS Corp.

Much of the recruitment spending also went to URS, of San Francisco, one of the world’s largest engineering, construction and technical services firms with $5.4 billion in 2007 revenue.

URS earned $1.74 million for engineering services out of a total $2.62 million spent on ThyssenKrupp-related contracts through the state Department of Economic Development.

At the time, Olivier said Louisiana spent about $3 million recruiting ThyssenKrupp, and his department had authorization from former Gov. Kathleen Blanco to spend up to $3.56 million on contracts, state records show.

A state law allows Louisiana to keep confidential nearly all details of how its spending money to woo a major economic development project such as the steel mill, so details of the spending weren’t known at the time.

On Wednesday, the Commerce, Consumer Protection and International Affairs Committee of the state Senate moved Senate Bill 343 to the Senate floor for a future vote. That bill would extend a state law for four more years that allows the Department of Economic Development to keep secret information regarding its recruitment of an economic development project while the negotiations are active.

Under the law, most records related to recruiting a prospect can be kept secret up to two years. The author of SB343 is state Sen. Ann Duplessis, D-New Orleans.

Here’s the remainder of ThyssenKrupp-related contract spending, obtained by The Advocate in a public records request:

• Port of South Louisiana, $49,990, for preparation of a proposal.
• Loren C. Scott & Associates, $29,850 for preparation of an economic impact study.
• Entergy Corp., $512,223, for engineering services.
• Bird & Associates, $16,000, for commercial real estate appraisal services.
• Argote Derbes Graham Shuffield & Tatje Inc., $19,500, for commercial real estate appraisal services.
• The Kean Miller law firm, $20,000, legal services for utility law issues.
• The Phelps Dunbar law firm, $230,933, for legal services and research regarding expropriation of property.

Ron Crum, a vice president at the URS Baton Rouge office, said Wednesday he couldn’t discuss work done confidentially for a client — in this case the state — without further clearance from the client.

At Entergy Corp., a company official said the $512,000 it billed the state for the steel mill project was necessary because of the scope of the project and the need for detailed proof of reliable electrical service to the St. James Parish site, where Entergy owned the majority of the 3,800-acre riverfront site. Two additional property owners would have been involved in land acquisitions had the project been pursued in Louisiana.

“To be able to respond to their request for electrical requirements, a study had to be performed to determine a number of things,” said Shelley McNary, Entergy’s director of economic development.

Once Louisiana became a finalist for the steel mill, much more detailed studies were required, she said, including soil borings to determine how a transmission line would be built to the proposed 7 million-square-foot plant. Extensive analyses of electrical loads needed for the company’s arc furnace and other equipment were performed, she said.

The state commissioned Entergy to do that work in a contract, work that MacNary said was similar to engineering studies it would perform for other customers.

On Tuesday, the state Department of Economic Development published its intent to keep confidential the recruitment of another industrial project, labeled Project F, with that determination made March 24, the department said.