Nucor’s $1.35 billion steel mill is boon to Meade County but bust for region’s farmers

By Grace Schneider and Mandy McLaren

Louisville Courier Journal


BRANDENBURG, Ky. — In March 2019, when Gov. Matt Bevin and his economic development team unveiled plans for a $1.35 billion steel mill, rural Meade County appeared to hit the jackpot.

 Steelmaker Nucor Inc.’s investment promised a transformation like no other — more than 400 high-paying jobs, new money for local schools and the community, and, most of all, a brighter future for so many people now driving dozens of miles to Louisville, Fort Knox and Elizabethtown to earn paychecks.

 But controversy has shrouded what was then one of Kentucky’s — and Bevin’s — biggest economic development coups.

 Nucor will soon break ground on 950 acres bordering the Ohio River, beside Consolidated Grain and Barge Inc.’s grain terminal.

 A condition of the steel company’s deal to build there is the grain terminal must shut down by the end of this month, sparking outrage among farmers in Meade and surrounding counties.

 They say the county sold them out, and the loss of a convenient river port will cost them millions of dollars — and maybe even put some out of business.

 "They stepped on us to build this steel plant," said Larry Fackler, moments after he climbed out of a grain truck to grab lunch at a gas and food mart in rural Flaherty. “Nucor, to me, led the county around by the nose.”

 The dispute has boiled over into a lawsuit pitting farmers against Meade's leaders and the two companies — Nucor and Consolidated Grain and Barge.

 Earlier this month, Lincoln Trail Grain Growers Association, five farmers and another farm corporation sued Meade County Fiscal Court, the county Riverport Authority, Consolidated Grain, Nucor and other parties, accusing Meade leaders of abusing governmental power and violating the state’s Open Meetings Act, “cloaking their actions in secrecy,” according to an amended complaint filed in Meade County Circuit Court.

 The farmers asked a judge for a restraining order to halt the grain terminal's planned Friday closure and to void all agreements with the grain company and Nucor.

 It’s unclear now how the litigation might impact Nucor’s timeline or whether it could derail plans for the 1.5 million-square-foot mill.

 Neither officials from Nucor nor Consolidated Grain and Barge would comment, citing pending litigation. Meade County Judge Executive Gerry Lynn also declined to discuss specific allegations.

 “Everybody thinks we’ve been in the middle of it,” Lynn said. “We’ve never done anything illegal or anything underhanded.”

 The farmers complain that they were cut out of discussions about the grain terminal — where farmers sell wheat, corn and soybeans, and where it's shipped to markets around the globe — after years of work to create the port near Brandenburg. They lament that it will shut down after just five seasons — to land a bigger fish.

 “Our elected officials really screwed the farmers,” said Steve Cannon, a construction company owner from Flaherty.

 How the deal went down:

 Nucor, one of the world’s largest metal recyclers with 2018 revenues of $25 billion, was hunting for a new mill site, primarily in Virginia and West Virginia, when Kentucky got wind of the search.

 State officials convinced executives to check out Brandenburg, which had a swath of bottom land ready for industrial development. Plus, Nucor has another mill in Gallatin County upriver from Louisville, Lynn said.

 After several meetings and behind-the-scenes negotiations, Bevin and Nucor announced plans in March 2019 for the economic development project, ranked as one of the top five in state history.

 The Kentucky Economic Development Finance Authority OK’d $40 million in state incentives in Frankfort just hours before Bevin made the announcement at Meade County High School in Brandenburg.

 The incentives seemed like a solid trade for a community of 28,700 residents, whose median household income of about $58,000 trails the national average by more than $2,000. The steel jobs were to pay an average of $72,000.

 Angry farmers say they were misled

 In the lawsuit, farmers accuse members of the Fiscal Court and the Meade County-Brandenburg Industrial Development Authority of assuring them that Consolidated Grain and Barge would remain open until it could be moved to another location in the county.

 Instead, Nucor and Consolidated Grain and Barge, known as CGB, agreed to close the grain facility by Feb. 1 and vacate the property.

 In return, CGB would get $12 million for its 15 acres, truck scales and several structures in the river. Nucor also agreed to pay CGB another $8 million in spring 2022 if the terminal relocated outside a 5-mile radius of the Meade property.

 The grain growers' suit says the deal between Nucor and CGB couldn’t have gone through without the aid of the Riverport Authority, Industrial Development Authority and Fiscal Court because the agencies needed to sign off on terminating the county’s long-term lease with CGB and on selling land set aside for industry to Nucor.

 When Fiscal Court members met with Riverport Authority board members in late September, two farmers and authority board members — Don Bewley and then-Chairman Nicholas Hardesty — said they were "no" votes on any proposed grain port closure and urged county officials to return to the table and negotiate an alternative.

More than 100 farmers will be forced to pay an additional $80 an acre, or $400 more per truckload, to haul crops to Owensboro, the closest Kentucky port, or north to the Indiana port in Clark County, said Fackler, the Meade County farmer.

CGB’s Meade terminal handled about 12 million bushels a season, nearly double what originally was predicted. At $5 a bushel, Hardesty said, "that's a $60 million economic impact" annually in the communities that came to rely on the port.

Hardesty and Bewley, who are parties to the suit, said in interviews they heard nothing more about the Nucor plans after the informal talk in September.

According to the suit, the Fiscal Court held a special meeting Oct. 1 during which its members voted to replaced Bewley and Hardesty, explaining that the men’s terms had expired. The Fiscal Court appoints members of the Riverport Authority.

The court appointed Bill Corum and Bryan Claycomb that night. The two newly minted Riverport board members then stayed the Fiscal Court meeting for a special Riverport meeting.

There Corum and Claycomb voted unanimously with another Riverport appointee, Brandon Fogle, to terminate the grain terminal lease, according to the lawsuit.

Hardesty called the removal of himself and Bewley a "backdoor deal. … In a small town, if you don’t go along with what they want, they’ll do it anyway."

The suit contends the Fiscal Court violated the state’s open meetings law by not providing advance notice of the gathering. The panel also improperly removed Bewley and Hardesty for expired terms when all members were subject to the same rules on their length of term, the suit says.

A week later, the Riverport Authority, Fiscal Court, CGB, Nucor and the development authority executed the lease termination, and the Fiscal Court voted to approve it Dec. 10. That move violated prohibitions on selling public property without first advertising it or seeking competitive bids, the suit says.

What money can solve

Charlotte, North Carolina-based Nucor couldn’t have hundreds of grain trucks rolling through its property, Lynn, the judge executive, said, and it also had concerns about heavy dust from the grain terminal.

Nucor and CGB's parent company battled a decade ago in a Louisiana federal court over air quality issues.

“We knew up front that the grain elevator had to be moved,” Lynn said, so officials approached CGB executives and found them receptive. One manager told the Meade contingent “there are things that money can solve and can’t solve. This is one that money can solve,” Lynn recalled being told.

County officials estimate that Covington, Louisiana-based CBG invested about $6 million in the port, and the county had an agriculture development bond of about $1.4 million, which Nucor paid off last year after agreements with county agencies were consummated.

Despite the grain operation's success, the $20 million was too much for CGB to pass up. “Let’s take the money and run” was the calculation, Lynn said.

For their part, Bewley and Hardesty said they are most incensed that Riverport Authority members were shut out of discussions until it was too late to come up with workable alternatives.

“We put a lot of time and sweat into getting that grain terminal,” said Bewley, a retired shipping company executive who lives in the Big Spring area, adding, “I’m not upset with Nucor.”

Fackler, the Meade County farmer, said Meade political leaders “are going to lean toward more employment (with a steel mill, but) we were led to believe we could have another elevator. And they lied to us.”

Farmers’ needs weren’t ignored, Lynn said, but those “squawking the loudest” are a minority, including some who don’t live in Meade. “We are diligently working to solve this problem.”

It's not been simple to satisfy the farmers while crafting a deal for a grain port that makes economic sense. Referring to past deals, Lynn said, it "has been nothing but a pain in the ass."

The current dispute shouldn’t overshadow the amazing opportunity that Nucor is delivering for Kentucky and Meade, said state Rep. Nancy Tate, a Brandenburg Republican.

Given the jobs and long-term spinoff, she said, “concessions quite possibly had to be made. ... We had to be very competitive in order to land this deal.”

See story Here (6)

125 views1 comment