Kentucky will provide up to $10 million in tax incentives to Braidy Industries in exchange for building a $1.3 billion aluminum rolling mill in Greenup County that is expected to employ hundreds of workers in a region beset by job losses in manufacturing and coal mining.
The company also is in line to get an additional up-front payment of $15 million that the state legislature authorized last month, said Jack Mazurak, spokesman for the state Cabinet for Economic Development.
The Kentucky Economic Development Finance Authority, which considers state incentives for economic development projects, held a special meeting via video conference shortly before Gov. Matt Bevin officially announced the project in Greenup County to approve the $10 million incentive. Mazurak said the board will meet again in the coming weeks to consider the additional $15 million payment.
The project will create 1,000 construction jobs and 550 permanent jobs with an average hourly salary of $38 when the value of benefits is included.
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The state based its incentive package on the assumption that 367 of the full-time jobs would be filled by Kentucky residents, Mazurak said. Workers from neighboring Ohio and West Virginia are expected to fill the rest of the jobs.
In order to claim the tax breaks approved Wednesday, the company must create the jobs it has promised and pay workers the promised amount over 15 years.
Braidy Industries plans to build a 2.5 million-square-foot aluminum mill on a 330-acre field in a rural area outside of South Shore. The year-old company expects construction to begin in early 2018, with completion in 2020.
The plant will make the skin for automobiles, plate aluminum for the wings of airplanes and unspecified materials for the Department of Defense. Initially, the facility will produce about 370,000 tons of aluminum per year, with opportunities to expand over time.
Bevin touted the job announcement as a “turning point” in the economy of Eastern Kentucky.
“Braidy Industries’ decision to locate in Eastern Kentucky has the potential to be as significant as any economic deal ever made in the history of Kentucky,” Bevin said in a news release. “The ripple effect of this investment will be significant and will produce positive change in the region for generations to come.”
Northeast Kentucky has been struggling in recent years. There have been hundreds of layoffs at Ashland’s AK Steel, Ashland Oil moved its headquarters from Ashland to Cincinnati in 1999, and more than half of the coal mining jobs in nearby counties have been lost.
Bevin and Craig Bouchard, chairman and chief executive officer of Braidy, said a major factor in the company’s decision to locate in Kentucky was the state legislature’s decision in January to approve “right-to-work” legislation, which allows employees to enjoy the benefits of a collective bargaining contract in their workplace without having to join a labor union.
Bouchard said he chose Kentucky over 24 other states, calling the decision a “come from behind win” for Kentucky. He said in three years, the facility in Greenup County will be producing 20 percent of the automotive sheet aluminum in the United States.
Kentucky is the third-largest auto-producing state, and its aerospace exports have jumped 183 percent in the past five years, according to the state Cabinet for Economic Development.
Bouchard said the mill will help revitalize the region and raise the bar for aluminum production globally.
“The state’s willingness to partner closely with private industry makes this a prime location to found and grow our world-class and cutting-edge rolling mill,” Bouchard said in a news release.
Wednesday’s announcement is the latest in a string of billion-dollar investments touted by Bevin.
Earlier this month, the Republican governor helped announce a $1.33 billion investment by Toyota in its Georgetown manufacturing plant. Toyota is eligible for $43.5 million in state economic development incentives for the project, though it isn’t expected to increase employment at the plant.
In January, Bevin announced a $1.5 billion Amazon air hub at the Cincinnati/Northern Kentucky International Airport. That project, which is expected to eventually employ 600 full-time workers and 1,400 part-time workers, is eligible for $40 million in tax incentives.
The Associated Press contributed to this story.