The city will provide a taxpayer-backed grant to CMC Steel US LLC to keep a 250-job mill open near Baldwin despite not creating jobs.
Office of Economic Development Executive Director Kirk Wendland said the possibility the company would close the facility without the grant concerned city officials.
City Council approved a resolution Feb. 25 to extend a $450,000 Recaptured Enhanced Value Grant to CMC Steel, a subsidiary of Irving, Texas-based Commercial Metal Co.
Council members voted 18-0 to waive the city’s public investment policy rule that requires companies to create at least 10 jobs to be considered for a REV grant.
In return, CMC Steel told the city it will invest $30 million over five years in real estate improvements, equipment and machinery at its 16770 Rebar Road facility.
The REV grant would refund 50% of the increase of the facility’s property taxes over that time.
CMC Steel took over operation of the former Gerdau Jacksonville Ameristeel mill during 2018.
CMC Steel paid $600 million for 33 rebar fabrication facilities and several steel mills nationwide. It bought the properties from Gerdau S.A., a producer of specialty steel products in the Americas.
The Jacksonville property sold for $11.8 million.
CMC Steel evaluated its 150 U.S. facilities and approached the city for incentives with plans for the site improvements, Wendland said.
He said the facility would become obsolete without the investment.
Before the vote, Council member Michael Boylan asked if approving a REV grant without mandating job creation sets a bad precedent.
“I wouldn’t say it’s a commonplace practice,” Wendland said. “Most of the time with the REV grants, you’re going to see additional employment. We felt like it was prudent in this case to go ahead with the REV grant. We did reduce it from 10 to five years.”
Wendland said the average salary for the CMC Steel jobs is $80,000 per year, plus benefits.
Council member Aaron Bowman said that the city had been working on the deal with CMC Steel for nearly two years.
“For a while it was touch-and-go whether we were going to keep that plant or not,” Bowman said.
Bowman said CMC Steel is JEA’s largest single-site customer.
CMC Steel paid the utility $19.89 million in 2017 and $18.7 million in 2018 for electric usage, according to a summary provided by JEA in August.
The company is third in energy purchases from JEA behind the U.S. Navy and the city.
After nearly two years of negotiations, commercial property owners in the Renew Arlington Zoning Overlay District can access city grant money to meet code compliance.
City Council unanimously approved a revision to the zoning overlay Feb. 25 that allows businesses to make compliance improvements without triggering a 10-set construction review by the city.
Previously, a commercial property improvement greater than or equal to 50% of its assessed value would be subject to compliance regulations.
Council members Joyce Morgan and Ron Salem co-sponsored Ordinance 2019-0879-E to create a Renew Arlington Design Review Team to vet Arlington overlay compliance improvements separate from the city’s standard permitting review.
Council approved updated zoning in June to combat blight in Arlington and create uniformity to attract development.
Arlington developed in the 1950s after the Mathews Bridge opened over the St. Johns River from Downtown.
The Arlington Community Redevelopment Agency separately approved a compliance grant in January to reimburse commercial property owners in the district for the cost to bring their businesses into minimum compliance.
The money comes from the agency fund and will cover the estimated $7.33 million in Renew Arlington commercial property compliance needs.
The Council also approved $30,435 to pay a part time landscape architect to provide Renew Arlington business owners with draft designs for compliance upgrades to landscaping free of charge.
