Sedalia Shows Their Strength In Steel!

by Tom Oldham

On Nov. 2, 2022, Gov. Parson visits Nucor Steel Sedalia, LLC, for a ceremonial signing of tax credit bill SB 3 and 5. (Photo Credit: Randy Kirby)

How big of an economic development team does it take to screw in a lightbulb? It takes everyone in the community! Yes, it all starts with a strong and intuitive economic development director. However, a great director would admit they can only do so much in their position without collaboration involving city council and staff, county commissioners, educators, utility providers, landowners, business owners and other community leaders.

In November 2017, an announcement was made that an investment of $250 million would be surged into the Sedalia community. This investment would lead to 250 jobs, well above the county’s average wage, as well as a $10 million rail spur. It would also bring in more investment from other businesses.

The investment was made by Nucor, a steel mill that creates merchant bar, rebar, structural steel, sheet and other steel products. Nucor Steel Sedalia makes rebar in various sizes and specifications used to reinforce concrete, ultimately providing more tensile strength. Nucor uses technological advances to be well ahead of many competitors, as well as environmentally conscious. The massive electric arc furnace that keeps Nucor rebar flowing runs solely on electricity and is much more energy efficient with fewer emissions than other mills! Further, the technology employed at the Sedalia mill recycles scrap steel, giving it new life and conserving natural resources. However, that investment was not made overnight nor on a whim. This investment was years in the making.

Before any major business begins the process of reaching out to communities to find the right location, discussions happen internally. The process of deciphering that communication comes from requests for information to the several communities under consideration. Kelvin Shaw, Sedalia city administrator, played a key role in this process, a process he calls “the battle of attrition.” This is where some primary questions are answered, such as a community’s capacity for power, gas and other utilities; available land for rail service; and the important questions of a qualified workforce. Through this process, potential locations are narrowed down.

After sending all the information Nucor requested and surviving many

Nucor has quickly become a cornerstone of Sedalia and Pettis County.

rounds of elimination, Sedalia finally made it to the short list for communities that could fit well for this project. At this point, only a few individuals were privileged to know the company involved. To everyone else, this was known as “Project Rotag,” or gator spelled backwards. As the community made it to the final selection stages, a few local leaders had the opportunity to visit another Nucor location, gather more information to ensure the company was a good fit for Sedalia, and come back ready for negotiations.

With leaders around the table, Sedalia worked to find ways to set us apart from the competition. One of the major incentives needed was a form of tax abatement called Chapter 100. Under Chapter 100, the facility, construction materials and certain tangible personal property may be purchased on a taxexempt basis. After construction, property taxes can be abated at the municipality’s discretion up to 100% for up to 25 years.

Not only did Sedalia offer a Chapter 100 tax abatement but also added another incentive. We determined that providing the construction for water and sewer mains at no cost to the company, (roughly $500,000 for the City) was essential to the deal. We hoped this, along with the incentive packages from our state partners, electric and gas utility suppliers, had placed us in the right position to be selected. The s tate provided training assistance dollars in the form of payroll tax abatements. The electric and gas providers were able to extend services to the site, and finally, the electric company was able to negotiate a special rate for the heavy industrial user, an incentive authorized by recent legislation.

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These incentives were not taken lightly by the City, nor could they have been approved without the necessary steps. One step involved informing the local taxing districts of the possible tax abatement. The City distributed a costbenefit analysis illustrating the return in a few short years by bringing in this anchor tenant to an industrial park that could conceivably grow to 1,500 buildable acres.

The mayor, city council, city administrator, and economic development director all knew this project could mean something great for Sedalia. With proper incentives, the City, along with economic development partners, finally made the announcement in November 2017 that Nucor would be coming to Sedalia!

For Nucor to become a reality, one other major accomplishment needed to happen — access to rail. Thankfully, history had set the City up for success. Sedalia is a product of the railroad and throughout history, the City’s fortunes were tied to it. The Missouri-KansasTexas railway was incorporated in 1870, and over the years Sedalia became a hub for traffic, along with a core focus for building and maintaining rail cars.

With many other rail spurs already constructed, city and county leadership knew what needed to happen in order to see the Nucor project through. Local leaders had already come together in past years to lay out a plan for how an additional spur could be built to open the industrial area to railroad services. Working with Union Pacific, the plan was validated and commitments obtained that they would serve the site if we built it.

Now we just needed to figure out how to pay for it. With pens at the ready, one of the largest grant applications in Sedalia’s history was written. With letters of support from state legislators, and conversations pushed at the federal level, things were looking up. However, a government shutdown pushed the project back more than an entire year. From the award of the grant to authorization to proceed, 425 days passed, but the effort was successful! The rail spur was coming!

Nucor is the anchor tenant on 300 acres of the 1,500 acres of potential use. With the addition of this rail spur, the area has become a prime candidate for further interest for new businesses across the nation. This area now has rail access, water and sewer connections, along with other utilities available.

One would think that after the announcement was made, the CIty could sit back and enjoy the fruits of the labor. However, Sedalia knows that once something great happens, we must maintain that greatness. In order for Nucor to thrive, Sedalia needed to develop and maintain a great workforce to support them along with other manufacturers in the area.

State Fair Community College was a valuable resource to ensure the project had needed welders, precision machinists, industrial maintenance technicians and more. The College not only provided the training needed to develop the workforce but was instrumental in obtaining and managing the state incentive package to fund the project.

Nucor has quickly become a cornerstone of Sedalia and Pettis County. The job opportunities have lifted many families out of poverty and set generations up for success. Nucor infuses thousands of dollars into the community through direct giving and sponsorships of events, as well as volunteering. From building a large pavilion on the Missouri State Fairgrounds that is used for daily events, to building the outside airing yards for Retrieving Freedom, the organization is a community-minded company with a great culture.

This accomplishment was not completed by a single person, nor a single vote from City Council. This took years of preparation before the City had even heard of the name Nucor. Policies and procedures were put in place, infrastructure planned and built, leaders put in place and so much more. To quote Zig Ziglar, “Success occurs when opportunity meets preparation.” This rings so true in the economic development arena.

That lightbulb that needed to be screwed in … needed everyone!

Tom Oldham was elected to the Sedalia City Council in 2020 and serves as an MML Board Member. He is an active member of MML’s Economic Development and Human Resources Policy Committee and as vice president of MML’s Central Region.