To say the group of laborers, electricians, masons, truck drivers and others were excited to hear the company had received its air permit from the Ohio Environmental Protection Agency and that it intends to start construction would be an understatement. But after so many false starts following a continual string of legal battles, the prospect of work after months of unemployment almost seems unreal, some laborers said.
“We are just hopeful that something else doesn’t pop up, and this time, it is really going to go,” said Jeff McGuffey, assistant business manager of IBEW Local 648, which will represent electricians.
Each union representing the 17 different skilled trades that will construct the SunCoke plant off Yankee Road tell a similar tale of need. Many have been out of work for 12 months or longer. With so few projects able to scrape together funding in today’s economy, SunCoke literally represents food on the table for the 500 laborers who will build it.
“I probably have 100 people on a list that want to go to work there,” said Dave Webster of Teamsters Local 100. With the original order only calling for eight truck drivers, “a lot will still be waiting,” he said.
Any skilled worker who joins his or her designated union could get a referral for the SunCoke project. And as Corbin points out, this is a 15- to 18-month job, meaning guaranteed income for laborers stretching from Dayton to Cincinnati.
“We really need a job and with these kind of numbers, SunCoke can put a lot of people to work,” he said.
SunCoke project brings incentives, costs
Two years, two permits, $20 million more in costs and several legal battles later, SunCoke Energy Inc. officials said they are finally ready to roll on a coke plant project that promises to be one of the biggest economic drivers the state will see this year.
Gov. Ted Strickland called the $360 million coke plant project “needed economic stimulation.”
The contract SunCoke has signed with AK Steel Corp. to provide Middletown Works with 550,000 tons of coke and 50 megawatts of electricity annually is “substantial” and bodes well for the future of steelmaking in Ohio.
“Ohio has been and must remain a manufacturing state,” Strickland said. “This is a major job creator and investment on the part of SunCoke and AK Steel.”
The jobs
SunCoke’s impact on the city of Middletown, where the plant will be built off Yankee Road, remains an unknown quantity, but City Manager Judy Gilleland said the benefits will reach far beyond income taxes.
“It will be a boon to the entire community, having that many construction jobs and people working here,” Gilleland said. “It’s huge news for the city and the citizens of Middletown.”
There are 17 labor unions that will represent the 500 workers who will build the plant. Their territories stretch from Columbus to Dayton to Cincinnati, making the project a boon to residents well beyond Butler County’s borders, said Gary Corbin, Butler County Building and Construction Trades Council executive secretary and treasurer.
Corbin said it will still be a month before McGraw Kokosing, the general contractor on the project, begins scheduling crews and ordering equipment and supplies that have been left in limbo.
Meanwhile, he said any skilled trade worker who wants to be on the build should contact the appropriate union office. To get a job, workers need a referral, and spots are highly sought after.
Jeff McGuffey, assistant business manager of IBEW Local 648, which will represent electricians, said they are expecting up to 110 jobs once the project peaks. It’ll be enough to make a good dent in the about 120 people who’ve been on layoff since the SunCoke build fizzled.
“I believe that almost all of the people who are going to work on that project have been laid off for six to eight months at least,” he said.
Hiring for the 75 permanent positions, which range from management, technical and supervisory roles to hourly staff, will begin six to nine months before plant startup, said Carol Sloan, spokeswoman for SunCoke.
It’s likely that in early 2011 the company will host a public session to provide information to job candidates, similar to what it has done in the past. Technical schools also may be contacted, she said.
Benefits to Middletown
In addition to the jobs, the income tax certainly won’t hurt Middletown, either.
The plant is expected to generate as much as $100,000 annually for Middletown, with an additional $500,000 anticipated in taxes stemming from construction payroll, according to Mike Robinette, the city’s economic development director.
While Robinette said he would not consider the SunCoke development the single event that helps the city to turn the corner, he said “10 years from now, when we look back and see how well the city is doing at that point, this will be one of those things people will look at and say, 'that was part of it,’” he said.
Robinette admits he was worried about the potential of SunCoke pulling out of the project due to the permitting delays, but said the city was in regular contact with the company to ensure it remained committed to Middletown.
“We’re pleased they were willing to be patient and work through the process like they did so that the project could move forward. Frankly, they didn’t have to do that,” he said
That patience has cost SunCoke an additional $20 million in project costs, but Sloan said the company expected increased costs from delays. She declined to cite the precise increases.
Benefits for SunCoke
Middletown managed to lure SunCoke into the city with a number of incentives, including a 10-year 50-percent tax abatement that will save the company $3.7 million, based on assumed valuations. Robinette estimates the project will generate $4.6 million during the same time period, with $3.7 million in property taxes and $980,000 in payroll taxes.
City Council also created a reduced water rate for the facility during a Feb. 2 meeting, agreeing to charge SunCoke a rate of $1.36 per thousand gallons of water produced. The approved amount is only two-thirds the city’s normal rate, but will still generate an estimated $360,000 annually based on the facility’s estimated 800,000 gallons per day consumption.
Its Middletown partner, AK Steel, also has offered its own incentives, agreeing to buy the coke and energy from the new plant for 20 years in addition to the 550,000 tons it will be buying from SunCoke’s Haverhill North Coke Company facility in Franklin Furnace, Ohio, for the next 12 years.
With so much coke heading AK’s way in the near future, concerns have been raised over whether the company will keep up its own coking operations at its Middletown and Ashland Works plants. The company has said there are “ongoing concerns” for its Ashland coke batteries in Kentucky due to age and environmental compliance costs.
Locally, Scott Rich, president of the Machinists Local Lodge 1943, said the union never has guarantees over any department but has been told AK has no intention of shutting down the Middletown coke plant.
Monroe’s next move
The city of Monroe, which has publicly opposed the plant, is in the process of contemplating its own next steps. Despite the $473,366.13 the city has reportedly spent to date fighting the plant, including a dismissed lawsuit and a canceled permit appeal, Mayor Robert Routson said “I feel we were justified in what we did.”
With a more stringent New Source Review permit in SunCoke’s hands, Routson said he will have a better idea on what direction or course of action the city will take regarding SunCoke when City Council meets with its attorney, Chris Walker, on Wednesday, Feb. 17.
From his legal standpoint, Walker said the company’s pursuit of an NSR permit “shows that Monroe’s objections to the original permit were valid.”
“ It remains to be seen whether Monroe is satisfied with other aspects of the permit,” Walker said.
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