LITTLE ROCK, Ark. (AP) -- Economic development officials told Arkansas House lawmakers Wednesday that securing a new $1 billion steel mill in the state is an all-or-nothing proposition: If lawmakers don't sign off on $125 million in financing for the project, then it'll go elsewhere.
The investors who are poised to build the facility in northeast Arkansas will take their business to neighboring states, such as Mississippi or Louisiana, if the lawmakers don't approve the state-backed bonds that Big River Steel would use to construct the mill, Economic Development Director Grant Tennille said.
After briefing state senators earlier this week, Gov. Mike Beebe and economic development officials appeared before a special meeting of the House on Wednesday, continuing to make the case for why the steel mill, to be located in Osceola, would be a good investment for the state.
In brief introductory remarks, Beebe told lawmakers to draw their own conclusions about the project that his economic development team has been courting for more than a year.
"There's no pressure, there's no high sales pitch on my part," he said. "You satisfy yourself that this is good or it's not good and act accordingly."
Most of the lawmakers' questions focused on the terms of the state's agreement with the company, the overall cost to taxpayers and when the state would be receiving a return on its investment.
Based on current interest rates, the bonds would cost the state between $177 million and $182 million over 20 years, Tennille said. He said it was difficult to assess a total cost for some of the other incentives the state is offering the company, such as tax breaks on building materials, because those purchase wouldn't exist without the project.
Of the $125 million in bonds that Beebe wants to issue to help finance the project, $50 million would be a loan to the company while the remaining amount would be paid off by taxpayers.
Tennille said the state would break even on the project after four years if the company exercises the option to repay its $50 million loan from the state early. It could take the state as long as six years to break even if the company chooses to pay off the loan over its full, 20-year term.
Lawmakers will have 20 days to decide whether to approve the financing. The 20-day timeline starts when Beebe submits a formal proposal.
House Speaker Davy Carter, R-Cabot, told reporters Wednesday he was encouraged by the project so far but did not say whether he would support it.
"I'm very optimistic about it," he said. "The more I learn about it, the more support I can give to it."
Carter said the Legislature will hire a third party to review the state's economic analysis of the project — a decision that's required by law. He said that lawmakers are also likely to commission their own independent study of the project as well.