Hoover IDB to issue bonds for U.S. Steel project
FROM STAFF REPORTS
HOOVER – The Industrial Development Board of the City of Hoover on Monday, March 18, announced the planned issuance by the IDB of one or more series of bonds, in a total amount up to $275 million, to support the construction by United States Steel Corporation an electric arc furnace steelmaking facility at the company’s Fairfield Works facility in unincorporated Jefferson County.
According to Brian Ethridge, Chairman of the Board, “The Hoover Industrial Development Board is glad to partner with United States Steel on its new EAF project. In addition to creating jobs within the city of Hoover, the IDB is pleased to aid with regional job creation and assist a company that has business interests in our city.”
The bonds, which the company expects will qualify for federal and state tax-exempt status, will be paid solely by the company and its affiliates; neither the IDB nor the city of Hoover will be obligated parties on the bonds.
Issuance of non-recourse bonds by the IDB for manufacturing projects such as the EAF project is specifically authorized by the Alabama Legislature for the purpose of promoting industry and enterprise.
On Feb. 11, the company announced it was restarting the EAF project, initially begun in 2015. Citing the company’s existing presence in and track record with the city, the company requested that the IDB serve as “conduit issuer” of the bonds to access tax-exempt financing for the EAF project.
Without the assistance of a “conduit issuer,” the company is unable to access tax-exempt financing for the EAF project.
Under Alabama law, the Board may finance projects located within 25 miles of the corporate limits of the city. The company’s Fairfield Works facility falls within those boundaries and does not fall within the corporate limits or the police jurisdiction of the city of Fairfield.
On Monday, the IDB held a special called meeting to consider and approve the company’s request. The IDB cited the following reasons for approving the company’s request:
- Regional economic development: U.S. Steel expects an approximate $215 million investment in the EAF project, which is also expected to generate around 150 additional full-time jobs.
- Employment opportunities and workforce development in the city: U.S. Steel will work with the board and the city of Hoover to incorporate employment and workforce development opportunities arising from the EAF project into existing job development programs in the city (for example, the Riverchase Career Connection Center).
- City’s long track record with U.S. Steel: U.S. Steel and its affiliates have extensive ties with the city and have been a long-standing valued corporate citizen of the city.
Support for the EAF project fits within the Board’s strategic vision. The IDB was reactivated in 2017, in part to recruit and support technology and STEM-based career opportunities for the citizens of the city.