A Japanese company will get incentives that could be worth more than $330 million to build a tire manufacturing plant in Clay County.
Mississippi lawmakers quickly passed the bill intended for Yokohama Rubber Co. Ltd. in a Friday special session, with House members supporting it 117-2 and Senate members supporting it unanimously. The entire session took less than four hours.
Republican Gov. Phil Bryant, who called lawmakers into special session, is expected to sign the bill as soon as Friday afternoon. Bryant and the company plan a Monday ceremony in West Point to mark the company's arrival.
"We are proud to welcome this world-leader in tire manufacturing to our great state," Bryant said in a statement.
The company, through its American unit Yokohama Tire Corp., would invest $300 million of its own money in a first phase, hiring 500 workers to make truck and bus tires. In exchange, the state would borrow $70 million to buy land, build infrastructure and train workers.
Yokohama now supplies such tires to the American market through a joint venture plant in Mount Vernon, Ill., as well as importing them from Japan and Thailand. In a Friday statement released from its Tokyo headquarters, the company said a new plant with a capacity of 1 million tires a year is needed "to accommodate the increasingly growing demand for its brand and further strengthen a system aimed at 'local production for local consumption.'"
The company said three additional phases could follow "in accordance with future business growth" bringing company investment to $1.2 billion, total jobs to 2,000, and capacity to 4 million tires a year. The state would borrow and give the company another $60 million to support those phases, $20 million for each additional $300 million phase.
Yokohama, in later phases, would make tires for passenger vehicles, said Brent Christensen, executive director of the Mississippi Development Authority, the state's job-hunting agency. Yokohama's American unit already has a passenger vehicle tire plant in Salem, Va.
Kathy Gelston, chief financial officer of the state's job-seeking agency, Mississippi Development Authority, said the company has committed to an average salary of $35,000, but the state expects higher pay.
Officials and residents from West Point and Clay County filled the capitol galleries Friday to watch the bill's progress. The north Mississippi County has been job-starved ever since then-Sara Lee closed the former Bryan Foods plant in 2007, laying off 2,100 people. Clay County's unemployment rate in March was 18.2 percent, highest rate of any county in the state, and has been higher than 10 percent for years.
"We're just pinching ourselves because we can't believe it's actually happening," Clay County Supervisor R.B. Davis said Thursday.
A few Tupelo-area House members tried to get tax breaks added to the legislation for the existing Cooper Tire and Rubber Co. plant, which has more than 1,600 employees. State Rep. Steve Holland, D-Plantersville, said Cooper wants sales tax breaks for equipment it plans to buy.
However, MDA officials said they'd rather wait and deal with Cooper separately, and House members rejected the amendment.
Besides state borrowing for bonds, other contributions would include $12 million from West Point and Clay County, $1 million from the Appalachian Regional Commission, $900,000 from the Tennessee Valley Authority and $590,000 from Atmos Energy.
Of the first $70 million in bonds, the state would spend $9.5 million to buy the land, $48 million to prepare the site and extend a railroad line, and $11.75 million to build a worker training center and train employees.
Gelston said the total tax exemptions and rebates for the company would likely be more than $200 million, including $60 million in local property tax breaks, $90 million sales tax exemptions on purchased equipment, $40 million in state income-tax withholding that the state would give to the company, and about $5 million in state franchise tax breaks.
She also said the state would waive corporate income tax, but said that amount is hard to estimate. A study by College Board economist Bob Neal found the state would give up $200 million overall over 30 years, but gain $1.11 billion in tax revenue, for a net benefit of $914 million. Neal wrote in an email Friday that the analysis excludes local incentives and tax revenue.
West Point Mayor Scott Ross said that he's not worried about foregone tax revenue.
"The job creation is so much more important than anything we might collect," Ross said. "Our people are hungry. This truly is a godsend."
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