Victory! Clay County finally gets a break

April 27, 2013 8:43:44 PM

Nathan Gregory - [email protected]


Through the collaboration of a local development alliance, Mississippi legislators and a global tire manufacturer, Clay County has finally gotten a long overdue financial break.  


The development, under the code name "Project Triathlon," became a reality Friday when the Mississippi House and Senate passed a $130 million economic incentive package that will bring Tokyo-based Yokohama Rubber Company to the Prairie Belt Powersite northeast of West Point. 


Construction of the multi-phase project is scheduled to begin in October, with operations projected to begin in 2015. The company, which makes truck and bus tires, is expected to create at least 500 jobs in the project's first phase and at least 2,000 once all phases are completed. Bill author Rep. Jeff Smith, R-Columbus, projected the plant to be operating at full capacity by 2023. It is expected to produce 1 million tires annually. 


Mississippi will issue a $70 million general obligation bond for the first two phases of the project and an extra $60 million for future phases. 


Of that, the state will use $9.5 million to purchase land, $48 million for infrastructure and site preparation and $11.75 million for a training center. 


Yokohama will invest $1.2 billion -- $300 million for each phase -- in its new location to be stationed in the county's 1,100-acre, Tennessee Valley Authority-certified megasite. 


The package allows Yokohama to pay an in-lieu fee of one-third of full ad valorem tax amounts. It also sends $900,000 yearly to the recently consolidated Clay County and West Point school districts. 


Each phase of the project has clawback clauses that provide additional bonding only when the company meets contractual benchmarks, including meeting the 500-employee quota for each phase. The average annual employee salary will be $35,000, and the clause mandates Yokohama repay the state that much for each job not created, Smith said. 


The second and third phases are slated to begin operation in 2017 and 2019, respectively. 


The Senate unanimously passed the bill, which was named after late legislators Bennie Turner and David Gibbs, both of whom represented portions of Clay County. 




The 'Link' to success 


In April 2012, Clay County and West Point signed a contract with what was then the Columbus-Lowndes Development Link, agreeing to pay $350,000 annually for three years in exchange for economic development representation. Oktibbeha County and Starkville later joined, making up the third organizational arm of the tri-county coalition, renamed the Golden Triangle Development Link. 


Link CEO Joe Max Higgins said that last year he invited representatives from Tennessee Valley Authority and Mississippi Development Authority -- who were in town for Mississippi State University's Super Bulldog Weekend -- to see what would eventually become the Prairie Belt Powersite.  


After agreeing to the representation deal with West Point and Clay County, Higgins said he and other Link representatives went to work quickly with city and county leaders to attempt to lure major companies to the site and gauge their interest in locating there.  


City, county and Link leaders agreed that if a company made an investment of at least $100 million to locate at the site, 45 percent of in-lieu ad valorem fees would go into both the city and county coffers, with the Link pocketing the remaining 10 percent. 


"We started looking at what could go here, and we thought it could support automotive, steel or chemical (industries)," Higgins said. 


Conversations with Yokohama representatives began during an initial visit last November, he said, after the company had identified 3,155 counties nationwide for consideration to locate the new plant. Higgins said he knew interest from the company was growing quickly when the search narrowed to 100 counties; Clay was one of 24 in Mississippi that received a request for proposal from Yokohama. Later, visits from company representatives became more frequent. 


"We found ourselves almost every week having them in," Higgins said. 


A trip to the Japanese headquarters confirmed his hopes that Clay County was one of the front-runners. Higgins said one of the most unconventional aspects of negotiations with Yokohama representatives was how quickly the process went. 


"Historically, when you're working on these big deals, you work with (a prospect) behind the scenes for at least a year," Higgins said. "In my 25 years, this is the most expedited project, from inception to this point, that I've ever seen." 


A company wanting to start an operation of this magnitude at the megasite was not what he had in mind when he began showcasing it to prospects, Higgins admitted. He said if someone had told him a year ago that a company was interested in making a $1.2 billion investment to locate in West Point, he would not have believed it.  


"Did I think there was a chance to get a component plant with 400-500 people making fenders or bumpers? Yes I did," Higgins said, "But this is beyond my wildest dreams." 




Local impact 


Clay County supervisor and board president R.B. Davis said the excitement around the community right now is not just due to what this means long-term but also to how it could bolster local industry when construction begins.  


The county's and West Point's decision to join forces with the Link was part of how this became possible, Davis said. 


"We had such a long, dry spell, and thanks to Lowndes County letting us hook up with the Link, this has materialized," Davis said. "Our board, the city, the mayor (Scott Ross) and the Link worked together to reach a goal, and it's been very rewarding. This will bring in more income for the city and county to ... ease the taxpayers' load as far as upkeep and maintaining services we provide. It's a historical event for us here in Clay County, and we think this is going to bring other opportunities for more jobs in other industries also." 


Sen. Terry Brown, R-Columbus, also noted the amount of business that will be brought into the county even before the first tire is made. 


"This provides employment for people needing work right now," Brown said. "The construction phase of this is going to employ a lot of people over the next three or four years. With the supplies and goods brought in from the Golden Triangle, the multiplier is pretty big when you look at something like this." 




A shot in the arm 


After senators passed the bill, Sen. Angela Turner, D-West Point, spoke to her colleagues and noted the contingent of supporters who traveled to Jackson from Clay County, saying the passage of the bill would not only be a tribute to them but a win for the entire state.  


"Clay County has taken a severe hit in recent years, and in previous months it has been number one in unemployment in (counties in) the state of Mississippi, so certainly we are excited about the prospect of new industry coming into the area," she said. "We don't want to accept all the credit. This is a major project for the state of Mississippi." 


Smith called passage of the bill one of the best things legislators have done in a while.  


"It's a big shot in the arm for the auto industry to expand and grow and be healthy in the South," he said. "The company chose this site, but the company chose Mississippi because of its business-friendly attitude. We have a heck of a team at the Mississippi Development Authority, and you can't give too much credit to Joe Max Higgins." 


Higgins said working with West Point and Clay County officials has "been a joy" and he looks forward to working with them again in the future. 


"I'm just elated for the people in Clay County and West Point," Higgins said. "We've had a bunch of people and elected officials come down here (Friday), and to see the relief in their eyes ... I had to get out of there because I was about to cry with them." 




About Yokohama 


Yokohama Rubber Company was established in 1917. Their stated corporate policy is "to enrich people's lives and contribute to their greater happiness and well-being by devoting our wholehearted energies and advanced technology to the creation of beneficial products." 


According to the company website, they produce tires for passenger cars, trucks and buses, mining and construction equipment and industrial vehicles.  


They also produce aluminum alloy wheels and automobile-related components, including conveyor belts, rubber plates, hoses, marine fenders, oil spill containment booms, air springs, water-repellant and waterproof materials, sound and vibration-proof materials and adhesives and sealants.

Nathan Gregory covers city and county government for The Dispatch.