Grays Harbor In The Running For Nucor Steel Plant -- Former Timber Area Sees Economic Salvation In Plant's 250 New Jobs

ABERDEEN - In May of last year, a soft-spoken businessman from Indiana dropped by the Port of Grays Harbor office, asked to speak to Port officials, and calmly informed them his company was interested in building a $400 million steel plant on their waterfront.

If things work out, Larry Roos told them, the Nucor Corp. plant would sprawl over some 400 acres, employing 250 people at an average $58,000, plus benefits. Several secondary plants would generate 200 more jobs.

Port officials were floored. "But we had to take him seriously," said Lisa Allan, a Port employee.

Steel plants and $58,000 jobs don't grow on trees, especially in timber towns like Aberdeen and Hoquiam, whose empty mills and grim unemployment rates became symbols of economic stagnation in the "second Washington" outside a few booming metro areas.

"This is the kind of project that can turn a town like this around," said Tami Garrow, director of the Grays Harbor Economic Development Council.

It is also a project destined to test the state's promise to address the economic woes that plague rural areas across the state.

State leaders must decide what they're willing to pay - in economic tradeoffs, environmental questions - to outbid two Oregon towns competing for the same plant.

Nucor, a Fortune 500 company with $4 billion in annual sales, has narrowed its potential sites to three - Clatskanie, on the Oregon side of the Columbia River, Coos Bay in Southwest Oregon and the Hoquiam waterfront on Grays Harbor.

Grays Harbor officials have assembled a 400-acre site that includes the municipal airport next to a federal wildlife refuge, and plunged into negotiations.

The rivalry is turning into an economic and political contest reminiscent of Seattle's stadium campaigns.

Nucor is negotiating simultaneously with all three areas, seeking its best deal. Company officials will field questions at a public meeting Wednesday at the Hoquiam High School gym.

Nucor is no run-of-the-mill steel company. Based in Charlotte, N.C., it is the nation's third-largest steelmaker, and one of the most innovative.

It pioneered a "thin-slab casting" process that is more economical than older techniques. And it manufactures new steel from recycled scrap metal, making Nucor "the largest recycler in the country," Roos said. The catches

But there are several catches.

To get the acreage it needs, Grays Harbor must move its airport.

Hoquiam would need to downsize its waterfront sewage lagoon.

ITT Rayonier would have to close or move a large log-loading site.

The steel plant would be built adjacent to Bowerman Basin, a federal wildlife refuge close to the hearts of Northwest bird enthusiasts.

Nucor will meet this week with the U.S. Fish and Wildlife Service and Audubon Society to discuss the project's ramifications.

Nucor also wants "incentives," which means tax breaks.

The Oregon Legislature already has passed into law a package that would translate to as much as $50 million in property-tax exemptions and corporate income-tax credits.

Grays Harbor-area lawmakers plan to introduce legislation that would match or raise the ante in Olympia early next year.

Even if all this works, 500 well-paying, nonunion steel jobs are bound to alter the character of a small town that for a century has identified with blue-collar unions and sawdust.

"Selfishly, I guess I should be against it," said Tom Mayr, whose family operates a small lumber mill in Aberdeen. "It would change this town and compete with me in the job market. But Grays Harbor needs those jobs."

Grays Harbor's economic woes are well-known. Plagued by cutbacks in timber harvests and downsized mills, the county has lost more than 1,000 jobs since 1990 - a staggering statistic in a county of just 67,000 people. The unemployment rate is 11.5 percent and has been as high as 15 percent. Per-capita welfare and food-stamp rolls are among the state's highest.

Real estate is flat; the average price of a three-bedroom home is about $80,000, a quarter of the price for a comparable home in many Seattle neighborhoods. Downtown storefronts sit empty, their tenants having migrated to shopping malls that don't appear to be doing much better.

"Reporters keep coming over here and photographing the same empty buildings and the same unemployed loggers," Garrow grumbles. "Well, now we have an opportunity to change that story."

The area meets all or most of Nucor's needs, Garrow said. The company wants 400 acres with easy access to rail lines and to a deep-water port - for moving scrap metal in and new steel out. Its electric-arc furnaces are nonpolluting but gobble up about 260 megawatts of power (about one-tenth the demand for all of Seattle); Grays Harbor can provide it.

The company specializes in what it calls "minimills," all of which have been constructed in small towns; similar new Nucor plants have been built in Crawfordsville, Ind., and Blytheville, Ark.

"There's a joke in the company," said Roos, who manages the Indiana plant and is overseeing the Northwest site-selection process. "When we look for a new site, we fly to a city, rent a car, tune in a local radio station and then drive until the station fades out - and that's where we build."

"Seriously, we think we find a better work ethic in smaller towns, people who grew up on farms and can fix things with baling wire and a pair of pliers," Roos said. "And we like to go places where we can have a positive impact."

Nucor's corporate culture lends itself to small towns, he says. "The minimills employ fewer people who do more things."

Tom Quigg, a Grays Harbor native and realtor, likes what he hears. Nucor appears to have no hidden agenda, he said. They're just looking for a nice town in which to build a West Coast steel plant. Offering incentives

So Grays Harbor plans to lead the way in arguing for tax incentives - some combination of credits and exemptions for larger companies that move into counties not benefiting from Seattle's booming economy.

The exemptions would be for up to 15 years; after that, new companies would pay the same taxes as their competition.

"So what if we give up tax revenues for `X' number of years?" wrote one reader to the Aberdeen Daily World. "Those are taxes we never had anyway. If you don't have something, you can't lose it."

Garrow argues that such deals are not comparable with spending tax dollars on sports stadiums. "Nucor is not asking for any money," she said.

"We have a job to do," she said. "This is a rare opportunity to replace a big piece of what we've lost in the last decade.

"Oregon has stepped up and made an offer. We can pass or play. Personally, I want to play."

Ross Anderson's phone message number is 206-464-2061. His e-mail address is: rand-new@seatimes.com