March 25, 2016
DURANT, Okla., March 21, 2016 /PRNewswire/ — Los Angeles-based National New Markets Fund, LLC has closed $21 million in New Markets Tax Credit (NMTC) allocation that will enable Commercial Metals Company (CMC) to build an environmentally-sustainable steel manufacturing facility in the rural south Oklahoma community of Durant (80 miles north of Dallas).
When completed in late 2017, the state-of-the-art micro-mill will utilize an uninterrupted production line process called “continuous-continuous” powered by a highly efficient electric arc furnace (EAF). The result will be a uniquely clean and green steel mill capable of producing 380,000 tons of rebar from recycled pre and post-consumer scrap.
CMC has a long history of innovation in steel production, recycling and distribution. In 2009, the company commissioned the world’s first micro mill in Mesa, Arizona, and many of the green technologies and best practices developed at that facility will be integrated into the new Durant mill.
As the single largest rural economic development project in Oklahoma history, the new mill will support 300 high-wage jobs in a severely distressed census tract with a 13.1 percent unemployment rate. The site is located within a multi-county area designated as a federal Promise Zone for the Choctaw Nation.
“This project embodies everything we work so hard to accomplish with each of our NMTC investments,” said Deborah La Franchi, co-founder and president of National New Markets Fund. “It will have an immensely positive impact creating jobs for the Choctaw Nation, while also helping advance a U.S. industry that needs innovation to compete globally.”
It is anticipated that the new micro mill facility will reduce CO2 emissions by at least 58 percent compared to a traditional iron ore based steel plant. Gases produced in the steelmaking process will be used to pre heat scrap, which in turn will reduce electricity consumption. The mill will also employ advanced air filtering and recycling technology to enhance recovery and reuse of common steelmaking by-products. In addition, water used in the steelmaking process will be recycled to reduce discharge.
“Our nation here in Durant lives up to its designation as a Promise Zone when projects like the CMC steel mill bring jobs and economic opportunity,” said Choctaw Nation of Oklahoma Chief Gary Batton. “The funding that makes this project a reality will help create a better standard of living for our people.”
The $21 million in NMTC allocation from National New Markets Fund will partially finance the purchase of equipment for the new facility. Additional funding partners include Rural Enterprises of Oklahoma, Inc., Midwest Renewable Capital and U.S. Bank. U.S. Bancorp Community Development Corporation (USBCDC), a subsidiary of U.S. Bank, serves as tax credit investor.
“In addition to bringing quality jobs and economic stimulus to our community, the new CMC mill will propel Durant to the forefront of clean and green steel production, “said Durant Mayor Stewart Hoffman.
The Mayor’s enthusiasm was echoed by Tommy Kramer, executive director of Durant Industrial Authority. “The positive impact of New Markets Tax Credits on this project will be realized for many years to come, and continue to improve the quality of life in the City of Durant and throughout our region.”
National New Markets Fund Co-Founder and CEO Belden Hull Daniels added, “Distressed rural communities like Durant need quality jobs, and 300 of them will be created by this project. It will serve as a catalyst for economic opportunity across the region.” Daniels knows Oklahoma well, having built a series of state development funds in the 1980s and 1990s – including OCAST, OK Investment Board and OK Development Finance Authority.
New Markets Tax Credits (NMTCs) were established by Congress in 2000 to stimulate investment and economic growth in designated low-income communities. They raise investor capital and leverage public and private funding to provide borrowers, such as Commercial Metals Company, with financing in the form of favorable rates and flexible below-market terms.
“This project is a great use of New Markets Tax Credits because of the high-paying manufacturing jobs it will create in an area that deeply needs jobs,” said Maria Bustria-Glickman, vice president of U.S. Bancorp Community Development Corporation, a subsidiary of U.S. Bank.
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