NYPA offers low-cost power for steel mill in Western N.Y.

A company that had briefly considered locating a $200 million steel mill in Massena has been offered a deal from the New York Power Authority to build the facility in Western New York.

Gov. David A. Paterson announced Tuesday that an 18.7 megawatt low-cost hydropower allocation from the Niagara Power Project has been offered to Steel Development Co., a steel recycling firm based out of Amory, Miss.

In return for the hydropower allocation, Steel Development would construct a manufacturing facility within 30 miles of the Niagara dam that would turn recycled steel into rebar, which is used to reinforce concrete.

The plant would employ 200 permanent employees at annual salaries approaching $50,000 per year and is expected to create the need for 600 to 1,000 construction jobs until the project is completed in the first half of 2011.

The news came as a bit of a surprise to north country officials, who had been told in April the company was no longer considering either of the New York sites because of a lack of available low-cost power.

"I'm happy to hear it's in New York state," St. Lawrence County Economic Development Director Raymond H. Fountain said. "I would've been a lot happier if it was in Massena, but the state gets this bad rap that it's such a bad place to do business, so it's nice to see businesses are still looking to locate in New York."

Some have blamed local officials for "dropping the ball" on the steel mill project by not offering more incentives to the company to entice it here.

Mr. Fountain denied such claims.

"They were very sophisticated investors, and they were going to build a plant somewhere," he said. "They came to us for personal reasons, because of [Clarkson University President Anthony G.] Collins, but they felt this wasn't the best fit. A lot of people put in time here working with them to try to move it forward, but our location was their second priority."

The developer said one of the biggest strikes against the Massena location was the region's limited access to interstate highways.

Mr. Collins said access to low-cost power was most likely the deciding factor in the plant's location.

"This has always been a business deal from the beginning," he said. "They needed 35 megawatts at a low cost. Whatever local, regional or state entities could put that together, that area would get the project."

The Clarkson president cautioned that NYPA offer does not necessarily mean Steel Development will build in Western New York, since the allocation is still far less than the company's projected 35 megawatt power needs.

In April, Steel Development Chief Executive Officer John D. Correnti, who is also a Clarkson trustee, cited NYPA's failure to come up with 35 megawatts of cheap power as the firm's reason for not locating in the north country.

But NYPA spokesman Michael Saltzman said the company never applied for a hydropower allocation in Massena.

"While Steel Development had expressed interest in both locations, it only followed through with its application for Niagara hydropower for locating in Western New York," Mr. Saltzman said. "That's all I can really say."

A group of local municipalities is hoping to have 20 megawatts at its disposal to use for economic development and some have argued that power could have been offered to the steel mill.

But NYPA officials say the firm did not request the additional power it would have needed to meet its 35 megawatt load, even if the region's power allocation had been offered.

While he's disappointed to hear that Massena will not be the future home of the steel mill, Mr. Collins said he hopes the loss of the project will provide an opportunity for local officials to consider just how challenging a climate the region is facing in trying to attract jobs here.

"It really underscores the competitive nature of economic development," he said. "We've got to be coordinated and able to react quickly, because if we don't, someone else will."