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The Hoover Industrial Development Board today agreed to issue up to $275 million worth of bonds to help U.S. Steel restart construction of an electric arc furnace steelmaking facility at its Fairfield Works complex.
U.S. Steel announced its intentions to restart the construction project in February, but the financing details were not revealed until today.
U.S. Steel will be responsible for repaying all of the bonds, but the company gets to take advantage of the tax-exempt bonds that Hoover’s Industrial Development Board can issue.
Neither the city of Hoover nor its Industrial Development Board incurs any liability for the debt, nor will the city’s credit rating be affected, City Attorney Phillip Corley said.
It’s simply a tool created by the Alabama Legislature to promote industry and enterprise. U.S. Steel initiated construction of the electric arc furnace in March 2015 but suspended construction in December 2015 due to unfavorable market conditions.
The electric arc furnace will be able to produce 1.6 million tons of steel per year, U.S. Steel said. The company expects its investment in the project to be about $215 million, and it should create about 150 jobs, company officials said.
Construction is expected to begin immediately, and the furnace is expected to start producing steel rounds in the second half of 2020, the company said.
The electric arc furnace will be in unincorporated Jefferson County, Hoover officials said tonight. Under Alabama law, Hoover’s Industrial Development Board can finance projects within 25 miles of the city limits, and the Fairfield Works facility falls within that boundary, said Hoover Councilman Derrick Murphy, the council’s liaison with the Industrial Development Board.
Brian Ethridge, chairman of the Industrial Development Board, said the board is glad to partner with U.S. Steel on this project. In addition to creating jobs within the city of Hoover, the board is pleased to aid with regional job creation and assist a company that has business interests in Hoover, Ethridge said.
Hoover Mayor Frank Brocato and Council President Gene Smith said it’s another good example of regional cooperation. Plus, “we work all the time with U.S. Steel on different projects,” Brocato said.
