Granite City, Illinois has a long and proud history in manufacturing, including being the home of several steel mills. The City had flourished during the industrial revolution but also acutely suffered during economic downturns. In the mid 1980’s the steel industry, nationwide, was facing extreme world-wide competition along with an aging infrastructure. Many steel mills shut down. Granite City’s largest mill, National Steel, was able to weather the economic cycles for a while, but filed for bankruptcy in 2002. The following year, Nation Steel was acquired by U.S. Steel Corporation. U.S. Steel, headquartered in Pittsburgh, Pennsylvania, is an integrated steel producer with major production operations in the United States, Canada and Central Europe.
In 2006, U.S. Steel began evaluating alternate sites amongst its U.S. operations for the construction of a state-of-the-art coke production facility. Coke is a key component of steel making and has typically been a materiel component that is brought to the mill by rail or truck. Having the production of such adjacent to the mill would bring operating efficiencies along with power co-generation opportunities by capturing the steam from the coke ovens.
U.S. Steel retained PGAV to provide advice on the potential application of tax increment financing (TIF) to help underwrite some of the extraordinary costs of this $540 million construction project. Cost competitiveness was a key criterion for the site location decision.
The City’s chronically high unemployment rate, the industrial nature of the proposed coke ovens and the prospects of creating new jobs and retaining thousands more, fit well within Illinois’s little used “Industrial Jobs Recovery Law”. PGAV’s previous experience with this statute enabled a quick response to determine project feasibility. Soon thereafter, PGAV assisted the City in establishing this unique kind of TIF district.
Granite City was selected for the location of the coke facility that began operations in late 2009. It’s designed annual capacity is 651,000 tons of coke produced from 120 heat recovery ovens. This plant will also produce approximately 500,000 pounds per hour of superheated steam that will be delivered to a cogeneration facility, supplying energy to the existing steel mill.