Shipyard doesn't meet investment target, incentive deal ends
GULFPORT, Miss. (AP) — Mississippi officials say they have voided an incentive deal with a Louisiana shipbuilder because planned investments and hiring never occurred.
Mississippi's deal with Edison Chouest Offshore of Cut Off, Louisiana, expired Dec. 31, Mississippi Development Authority spokeswoman Melissa Scallan tells the Sun Herald . She said the company's Topship subsidiary missed a deadline to invest $68 million and hire 1,000 workers.
It's an ignominious end for a deal that was much touted by Gov. Phil Bryant and others. The Republican governor announced the Topship deal at the same time in 2016 as a $1.6 billion Continental AG tire plant that's now under construction west of Jackson, touting it as the best economic development day in Mississippi history.
Topship proposed cutting investment to $34 million and 250 jobs, Scallan said. But when lawmakers approved incentives for Topship, they wrote the higher numbers into law, meaning the state didn't have the flexibility to alter the deal.
Scallan says Mississippi never paid any of $36 million it promised, which would have included $11 million in borrowed money and $25 million in federal community development money left in a fund for recovery from 2005's Hurricane Katrina.
The Mississippi State Port Authority spent $32 million to buy 116 acres (47 hectares). Port director Jonathan Daniels says Topship paid $16 million of that and is making monthly lease payments of $85,000, plus interest.
Topship is using the land, he said, which includes 350,000 square feet of covered space and rail-mounted cranes.
"The project or projects certainly haven't developed the way we had hoped, but we are willing to work with them so that they can maximize use of the site for job creation and business development," Daniels said. "It's a very flexible facility. It really could provide for very unique production space."
Edison Chouest Offshore planned to build boats to service offshore oil platforms in Gulfport, but offshore oil drilling in the Gulf of Mexico has been slow in recent years because of low oil prices and increasing production on land spurred by increased adoption of hydraulic fracturing, which allows greater production. Records kept by maritime consultant Tim Colton show Edison Chouest only launched two offshore service vessels last year.
Daniels referred questions about plans for the property to Edison Chouest. Company representatives did not respond to an email or telephone calls from the Sun Herald.
Edison Chouest affiliates have failed to live up to previous incentive deals in both Louisiana and Mississippi. Affiliate Gulf Ship opened in 2006, promising 800 jobs at its shipbuilding facility, also off Seaway Road. Harrison County invested $12 million in Katrina recovery funds in the project. Current job numbers were not available, but the company has in the past employed only up to 650 workers, according to a previous Harrison County Development Commission director.
The week before Bryant announced the Topship deal, Gulf Ship laid off workers and was down to only 110 employees.
Information from: The Sun Herald, http://www.sunherald.com