With the Pueblo Urban Renewal Authority’s recent sale of $91.2 million in bonds, EVRAZ North America now has a vehicle to finance the environmental cleanup at the site of its new long-rail mill.
That mill is huge news for Pueblo, as it keeps the company in town and ensures at least 1,000 full-time jobs, including 200 new highly skilled labor jobs, for the next seven years.
“This project will provide a critical, long-term boost to our local economy,” PURA Board Chair David Abeyta said in a written statement. “And equally important, it will do so in an environmentally sustainable way.”
“It will be one of the largest economic development projects the Pueblo community has seen in 30 years.”
The tax increment revenue bonds ended up selling at a total interest cost — averaged between the A-series and B-series bonds — of 4.8%.
“As of right now, the bond proceeds, which we’ve already received, will give [EVRAZ] approximately $70 million,” PURA Treasurer Ralph Williams said. The total cleanup project estimate is $100 million. That money is eligible for Tax Increment Financing (TIF) costs.
It is all based on an estimate that EVRAZ will pay approximately $205 million in property taxes over 25 years at the long-rail mill site. EVRAZ will pay those taxes to various entities, which have agreed to return it to PURA in order to issue the bonds.
The involved taxing entities include Pueblo County, the city of Pueblo, Pueblo School District 60, Pueblo City-County Library District, the Southeastern Colorado Water Conservancy District and the Lower Arkansas Valley Water Conservancy District, which was at first hesitant to allow its TIF to be used on the project.
“In its simplest form, all we’ve done is provided a way for EVRAZ to borrow money to clean up their facility at 4.8%,” Williams said. “They’re paying for it all. It’s just that instead of going out and trying to borrow the money for something that is very difficult to do — environmental cleanup — they’ve got bonds that are giving them a way to do it.”
Tax increment bonds are a common mechanism to redevelop blighted areas. Expected growth in property tax revenue is used to finance the bonds that will pay for improvements in a TIF district.
Part of the environmental cleanup EVRAZ will undertake includes moving railroad tracks, putting in a water treatment plant, disposing the contaminated soi and the other considerations that naturally come with a 140-year-old heavy industrial site.
The bond funds can also be used to control the environmental impact of construction, including paying for the foundation and slab.
EVRAZ chose Pueblo for its long-rail mill in 2018 over cities in Oregon and Canada. These bonds were one incentive for the selection of Pueblo; the other is Xcel Energy’s plan to create a 240 megawatt solar farm to provide low-cost energy to the mill.
Construction is expected to be completed in 2022.