Buying into Hyundai package

Published 12:00 am Thursday, May 9, 2002

BNI Newswire

A community’s inability to contribute to the Hyundai incentive package won’t have an affect on the governor’s economic development visits throughout central Alabama, said a spokesman for Gov. Don Siegelman.

"The governor’s aware that not every community has the financial wherewithal to contribute," said Mike Kanarick, deputy press secretary. "This is all of Alabama helping all of Alabama. Because a community couldn’t contribute money doesn’t mean there’s no hope of attracting a supplier."

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Communities in and around Montgomery, where the Hyundai plant will be built, were asked to contribute money based on a formula derived by Auburn University-Montgomery economist Dr. Keivan Deravi. Deravi, at the request of state Finance Director Henry Mabry, ran a cost benefit analysis for each community to find out what benefit they would have.

"From that model, the finance department looked at the positive tax benefits that would come to the communities," Kanarick said.

That amount was multiplied by 10 to find out what each community would be asked to contribute to the incentive package, which totaled $234 million, including tax breaks, pledges from communities and contributions from private companies.

Troy and Pike County have been asked to contribute $350,000 each; neither the Troy City Council nor the Pike County Commission have formally reviewed the request or taken action on it.

Mabry has said the incentive package breaks down to about $117,317 per job, based on the initial expectations of 2,000 jobs.

Some communities – including Chilton County and Elmore County – simply did not have the money.

The governor is currently on an intermittent "Communities of Excellence" tour through cities and counties around Hope Hull, the new home of Hyundai’s first U.S. plant.

He has already visited Chilton County and will visit Troy and Pike County next Monday.

Those visits are designed to help communities with their economic development efforts.

"I am visiting communities across south and central Alabama to ensure that they put their best foot forward to attract industries," Siegelman said. "I want to ensure that these tier one suppliers don’t locate in Georgia or Mississippi but instead right here in our Alabama communities."

According to The Birmingham News, Georgia officials are already taking steps to attract some Hyundai suppliers – sending a team to Korea to meet with potential industries.