Monday, the state of Mississippi broke even, you might say.
In West Point, state officials joined Yokohama Tire Co. executives to celebrate the beginning of production at the Japanese tire manufacturer’s new plant. Phase 1, which will ultimately hire 500 workers (there are a little more than 260 workers on the job at present), represents a $300-million investment for the company. Plans call for three more phases, each adding 500 to the work force. When all four phases are completed in 2023, the facility is expected to employ 2,000 workers and will represent a $1.2 billion investment by the company.
Mississippi, meanwhile, provided $70 million to the company in general obligation bonds. Another $60 million in state investments will follow as new phases are completed.
While $70 million is no small amount of money, there is every reason to believe it will be a good investment. It will immediately stimulate the economy of the Golden Triangle. The impact will be felt far beyond Clay County, although the increase in the tax base is huge boost for that county.
So, it was a good day for economic development in our area and worthy of celebration.
But that wasn’t the only thing that happened on the economic development front.
Although the sale was finalized on Friday, sale of the bankrupt KiOR facility on The Island was revealed Monday. Georgia Renewable Power purchased the facility for $2.1 million. The land ownership reverts to the Lowndes County Port Authority.
The sale means Lowndes County and its school district, along with the city of Columbus, will receive a $1.1 million in back taxes while the Port Authority will collect back rent and fees.
Remember that $70 million the state put up for the Yokohama project? That’s about the amount the state will forfeit now that the KiOR sale is complete. At the time of bankruptcy, KiOR owed the state almost $70 million on a $75 million loan provided by the Mississippi Development Authority.
Once the local government entities and the receiver who managed the bankruptcy are paid, there will be little money left. The state will recoup a few cents on the dollar if that.
Monday’s developments should be viewed as a cautionary tale. Like any investment, there are risks involved.
Yokohama appears to be a success story in the making; KiOR, by contrast, has proven to be an unmitigated failure.
Thanks to the caution exercised by our local economic development leaders, the cost of that failure was reduced to virtually nothing. The KiOR site remains an attractive one.
Locally, we lost nothing Monday.
That’s something the state cannot say, however.
Breaking even was about the best it could do, given the circumstances.
The Dispatch Editorial Board is made up of publisher Peter Imes, columnist Slim Smith, managing editor Zack Plair and senior newsroom staff.
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