Kumho tire plant delayed -- again

A third delay in construction of Kumho’s $225 million tire plant in Macon has economic development officials rethinking the project’s future -- and considering the possibility of putting the plant’s site in Sofkee Industrial Park back on the market.

A spokeswoman in Gov. Nathan Deal’s office confirmed Monday that Deal met with Kumho officials in October while in South Korea and was told of the delay. The company’s last projected date for opening the midstate plant had been 2013, before this latest setback.

“All we can really say is we do know it’s on hold, and it might be a span of a couple of years,” Deal spokeswoman Stephanie Mayfield said. “Kumho reiterated to the governor its commitment to the project.”

The proposed plant would create 450 new jobs, but its construction was delayed first in 2008, then again in 2009. The project and its status have been added to the agenda of Wednesday’s meeting of the Macon-Bibb County Industrial Authority Properties Committee, authority Chairman Cliffard Whitby said. The authority might have to decide soon whether to extend incentives used to bring the company to Macon.

“It’s essentially boiling down to the shape of the economy worldwide and a business decision they have to make,” Whitby said. “We’ve got to look at this and make some determinations on what’s in the best interest of the community.”

That includes, he said, “whether or not we’re going to accept another delay under the terms that we originally had agreed to.”

“That just simply goes to whether it’s in the community’s best interest or whether we think we can open that site up to other prospects. ... We’ll make some determination on what our posture needs to be, because at the end of the day what we’re looking at is we’re tying up a prime piece of property and it’s not available to potential prospects coming up.”

The 1.3 million-square-foot Macon plant would be Kumho’s first outside of Asia, and to lure the company here, officials dangled an enticing incentive package that included a 20-year tax abatement and job tax credits. The package also included a $3.9 million OneGeorgia grant, of which $2 million was used for grading at the industrial park.

Pat Topping, senior vice president of the Macon Economic Development Commission, said grant money was spent on site preparation and infrastructure improvements, including a new water tank.

“All that makes this a much, much more marketable site than it was before,” he said.

The county, state and federal investment through tax incentives, loans and grants have been estimated at about $9 million. The local property tax abatement approved by the county and school board would be $17 million over a 20-year period, while the company would pay about $10 million during that same time.

The deal has not cost Bibb taxpayers, Topping said, because the job credits and property tax breaks do not kick in until jobs are created.

Whitby said the OneGeorgia grant and other incentives, including local contributions, could include “clawbacks” that call for penalties or payback clauses if projects fail to meet certain timelines or other criteria. The state, he said, has contacted local officials seeking information regarding local investment in the project.

The authority has had “no direct conversation about Kumho about whether we think they will eventually build the plant here.”

“That’s a discussion we’ve got to have real soon,” Whitby said. “It would not be wise for us to continue to just hope and pray. We’ve got to make some concrete decisions about what’s best for our community going forward. All this has been initiated by the state, so clearly they’re at a place where they’re ready to make some decisions.”

The industrial authority committed $850,000 toward the project and by 2009 had spent about $450,000 of that. Another $1.22 million was pledged from the U.S. Economic Development Administration that was not tied to job creation.

Topping said he and MEDC President Chip Cherry have spoken with Kumho officials four or five times this year. He remains optimistic the project will come together, but he noted, “We’re in different economic times since this got started.”

“I think Kumho has every intention of moving forward with the project,” Topping said. “We just hope the economic situation allows them to go forward.”

The question now might be how much longer officials are willing to wait.

“I can’t tell you what will come out of the meeting, but we certainly must have this as an agenda item,” Whitby said. “Based on the way I read what’s coming out of the state, they’re starting to question whether or not it’s in the community’s best interest, in everybody’s best interest that we remain hopeful that the economy will turn around and Kumho will eventually locate here. That’s the discussion that we’ll have on Wednesday.”

To contact writer Rodney Manley, call 744-4623.

This story was originally published November 15, 2011 at 12:00 AM with the headline "Kumho tire plant delayed -- again."