THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, March 10, 1995 TAG: 9503100304
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY LON WAGNER, STAFF WRITER
LENGTH: Medium: 60 lines
The tug-of-war for one of the hottest industrial prospects of the year boiled down to an age-old question: Which state offered a better location?
Nucor Corp. Chairman Kenneth Iverson said Thursday that he chose to build a $500 million steel mill in South Carolina simply because it offered a more strategic site than Virginia.
``With the site in Virginia, we did not have the ability to bring in oceangoing barges on the Pamunkey River, where we do have that ability on the Cooper River here,'' Iverson said, ``and that was really the deciding factor.''
Nucor picked a site in Berkeley County, S.C., outside of Charleston, rather than one in King William County. The mill, which will make sheet steel used to manufacture cars and appliances, is expected to create 600 jobs that pay an average of $55,000 a year.
Two industrial recruitment tools often cited as reasons for a company's decision - million-dollar incentives and reduced utility rates - had little to do with Nucor's decision, Iverson said. Both states offered similar incentives, he said. Nucor's electricity bill will be about $2 million per month.
Electricity costs may have played a factor in Nucor's decision - but not because South Carolina offered a better deal. As the competition for Nucor played out, Virginia apparently had an advantage because of lower electricity costs; South Carolina offered better water access.
Virginia lost its edge when the South Carolina legislature passed a law allowing the state-owned electric utility to give Nucor a rate break by selling electricity directly to the company.
``We were able to do it without any special treatment,'' said James T. Rhodes, president of Virginia Power. ``I'm pleased at that because I think that's a clear demonstration that Virginia Power can be and is a very competitive supplier of electricity, and that bodes well in the more competitive environment that we'll be facing.''
In its failure to provide a site with deep-water access, Virginia apparently fell victim to federal air pollution regulations, Iverson said. Both Richmond and Hampton Roads, which could have handled Nucor's ocean barges, have been designated ``non-attainment'' zones under the Clean Air Act. A steel mill would have reduced the air quality in those two cities, so the state had to look elsewhere for a site.
Virginia economic development officials tried to make the best of the site near West Point. They wrote to the Army Corps of Engineers asking them to dredge the York River deeper than normal to provide water access to the site.
The Corps said that the earliest it could begin dredging the channel would be in five years. Nucor wants to begin construction in three months.
``Deep-water access has not been a longstanding issue,'' King William County Administrator Dave Whitlow said. ``We have made no bones about the kind of channel depth that is available here, but we can't change what exists.'' by CNB