Though the possibility of a strike looms over the sprawling mill at 1 Broadway, U.S. Steel's $750 million investment in Gary Works is expected to ultimately pay off for the struggling steel town.
Gary opted against giving U.S. Steel a 100 percent property tax abatement as an incentive for the investment, opting instead to negotiate a payment in lieu of tax increment. That way, U.S. Steel will keep $35 million of property taxes it would have otherwise paid and the Gary city government, the Gary Community School Corp., and the Gary Public Library will split $35 million in newly generated tax revenue.
"Eighty percent of these dollars will be realized during the first 10 years of the investment," Mayor Karen Freeman-Wilson said in a press release. "We are also exploring whether there may be an opportunity to monetize these dollars to receive some or all of them earlier in a lump sum. Further, the investment provides added security for existing jobs."
U.S. Steel also will establish a community fund of up to $100,000 during each of the next 25 years.
"This will be an opportunity to support worthwhile organizations and initiatives that have struggled with funding," Freeman-Wilson said.
Gary Works is U.S. Steel's largest integrated mill, but the investment there was never guaranteed even as the Pittsburgh-based steelmaker pledged $2 billion to revitalize its assets company-wide. U.S. Steel said it will focus its investment in Gary Works on "the four blast furnaces, the steel shop, the casters and the hot strip mill."
"U.S. Steel has always acknowledged that the company’s flagship plant is located in Gary, Indiana," Freeman-Wilson said. "The company’s decision to make an investment of this magnitude underscores the importance of the Gary plant to the overall enterprise. Yes, U.S. Steel considered other communities for this investment, but Gary was chosen because we were able to develop a framework for the investment which includes a $12 million contribution from the state of Indiana. The investment is a benefit for all concerned. Nothing is ever a guarantee, but this investment signifies a commitment to this operation."
Beyond the stability the investment brings to the steel mill the city of Gary was originally built around in 1906, it's also opened up ongoing discussions about how to get U.S. Steel more involved in Gary's civic life again.
"There have been extensive discussions about the relationship between U.S. Steel and the city of Gary," Freeman-Wilson said. "In fact, during some of our early meetings, we expressed a feeling of abandonment from the standpoint of civic participation and corporate philanthropy. We also suggested that there could have been mutual benefits from better communications in the past. U.S. Steel acknowledged the validity of our concerns, and we both identified the opportunity to signal a new commitment to a strong relationship between U.S. Steel and the city of Gary.
"Important aspects of this discussion include employment opportunities for local residents in the face of an aging workforce, support for local development efforts, business development for local vendors to do business with U.S. Steel and the availability of real estate owned by U.S. Steel."