June 25, 2008
Nucor’s Deal Has Primary Consent
By David Flaum
Steel-maker Nucor Inc. moved a step closer to getting two related businesses as neighbors Tuesday with the endorsement of a needed land deal from the Memphis-Shelby County Port Commission.
Part of the package involves buying 84 acres south of Nucor's 500- acre site for $840,000, Thad Solomon, plant manager, told commission members during a meeting as they considered delaying a decision.
"I don't believe we can do this unless we can offset the land (for the related businesses) so we have land for future growth," Solomon said.
A delay may jeopardize the chances of getting one of the two plants here - the service-and-repair center, whose owners are also considering Pittsburgh or Lafayette, La., for the facility, he said.
Each will invest about $10 million to build their factories, said Charles Gulotta, executive director of economic development in the Memphis and Shelby County Division of Planning and Development.
One is a machine shop, fabricator and repair facility for steel mills that has made some of Nucor's heavy equipment. The other is a steel service center that will do finishing and servicing to start. That business plans to open with 30 to 35 workers, while the fabricator plans to have 50 to 60, Solomon said.
Average pay is $40,000 to $45,000 a year plus benefits at both businesses, Gulotta said.
"We've done background checks on the companies and they appear to have great track records," he said.
Neither he nor Solomon would identify the firms.
Those plans leave 10 acres for a possible third neighbor.
Commission chairman Tom Fisher and executive director Don McCrory were concerned about the selling price.
McCrory said he was negotiating with a local business to sell 30 acres in the park for $43,560 an acre. That potential buyer may not be happy about another firm buying land for $10,000 an acre, he said.
Fisher cited a study that put a value of $44,000 an acre on vacant land in the industrial park.
Selling land in the park for a lower price might jeopardize the commission's ability to make payments on its $28 million debt package, he said.
But others pointed out the $44,000 figure wasn't from a formal appraisal.
Also, the $10,000-an-acre price for the 700-foot-by-one- mile parcel Nucor wants to buy is the same as it paid for 120 acres north of the plant.
Fisher was the lone vote against the proposed sale, which included leasing Nucor 25 additional acres in wetlands across the levee from the plant site. The commission had previously agreed to lease 145 acres of the basically unusable land to Nucor.
The deal goes to the Memphis City Council and Shelby County Commission for votes.
The Nucor plant, a rebirth and modernization of the former Birmingham Steel factory, should melt its first steel next week and mold its first steel bars around July 15, Solomon said.
Contact David Flaum at 529-2330. To read more stories by this reporter, click on "Contact Us" at commercialappeal.com, then click on the reporter's name.
Memphis plant: 3601 Paul R. Lowry Road
General manager: Thad Solomon
Business: Producing steel rods for autos, heavy machinery, farm equipment, oil production and other industrial uses.
Property size: 615 acres
Employees: 225 by the end of 2008
Web site: nucor.com
Originally published by David Flaum [email protected] .
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