December 19, 2003
Bollinger picks Louisiana for expansion plan
Louisiana's State Bond Commission has approved a line of credit totaling $21.85 million for Bollinger Shipyards for expansion and new job creation.
The investment requires a dollar for dollar private match by Bollinger plus a commitment to create 500 new jobs immediately with a ramp up to 1,750 new positions within five years.
Combined with a previously approved $8 million line of credit, the total funding available is $29.85 million.
Bollinger is competing for several major U.S. defense contracts including the Army's Theater Support Vessel and the Navy's Command and Control project. Bollinger's hopes are pinned on the Incat high speed catamaran design. Construction of the aluminum hulled Incat vessels with its requirement for sophisticated welding and manufacturing operations and an appropriately trained labor force is driving most of the need for new shipyard facilities.
Bollinger is also a member of the Lockheed Martin-led team competing for the Littoral Combat Ship, which is offering a non-Incat hullform.
According to a report in the Times Picayune newspaper a final agreement between the state and Bollinger has not been signed, but Bollinger Chief Operating Officer Mike Ellis said Louisiana had won a competition against other Gulf Coast states to become the site of a major shipyard expansion.
"Although Bollinger received very attractive offers from several Gulf Coast states, Louisiana's commitment to Bollinger and to the shipyard industry will ensure that these programs and others will be built in Louisiana," Ellis reportedly said, adding that "We did not take the most attractive package on the table."
Phase 1 of the expansion will entail 100 to 150 new jobs at Bollinger's existing site on the Industrial Canal, but a site for the bigger Phase 2 project has not been determined. Bollinger has a dozen yards across southern Louisiana and may elect to expand existing yards instead of building on a new site, Ellis reportedly said.
Ellis said the company wanted to "stay in our home state" and had received substantial commitments from the state to provide intensive training facilities to ready workers for the jobs.
According to the agreement, state money would be used for shipyard machinery and a research and training center.
The three parties to the agreement, reports the Times-Picayune, are the company, the state and the Port of New Orleans. For Phase 1, which goes into effect as soon as the deal is signed, the state has pledged $10 million toward a new dry dock that will be owned by the Port of New Orleans and leased to Bollinger for $1 per year for up to 99 years. Based on the Industrial Canal, the dry dock will be nearly the size of a football field plus end zones and will be able to lift as much as 10,000 tons. Its primary use will be for work other than the Incat program.
Phase 2, for the larger expansion, would go into effect if Bollinger gets one or more of the big military contracts, which could happen in 2004 or 2005.
The Times Picayune story notes that Bollinger also will get millions of dollars in tax incentives, including special credits through the state's Enterprise Zone and industrial tax exemption programs, that are not specifically covered in the pact.