/Continental Tire The numbers behind the deal

Continental Tire The numbers behind the deal

Mississippi Today obtained a memorandum between the state and Fort Mill, S.C.-based Continental Tire the Americas through an open-records demand. It contains new information about the project, including its costs. The tax incentives that lawmakers approved earlier in the year are largely responsible for the memorandum. Mississippi legislators approved $274 million worth of bonds in February during a five-hour-long, one-day special session in the regular legislative session. This was for a Continental Tire plant located in Hinds County. According to an analysis by the Associated Press, $600 million in incentives from both the state and local levels will be available. Continental will receive tax breaks from Hinds County, as well as the inventory and franchise tax cuts. Continental AG, the parent company of the company, is based in Hanover, Germany. It had revenues of $43.5billion and made profits of $3 billion. Continental was required to create 2,500 jobs in Mississippi as part of the deal. The average salary for these jobs is $40,000 per annum. Continental’s total investment would be $1.45 billion. Site work costs include: * A “initial within-the-fence grant”, $89.6million from the Mississippi Development Authority, to reimburse Continental for capital improvement projects, including fire protection and fixtures, as well as electric substations. If production is completed by December 31, 2019, Continental will be eligible for an “additional within-the-fence grant”, which amounts to $241.7 million. The company will have to pay any clawback fees if they don’t live up to the terms of the contract, as well as the cost of bond issuance and oversight fees. * $46 Million for site preparation and foundation work. 41% of that sum is for site preparation, with $5 million going to foundation work. * $42.6 Million for engineering, design surveying and inspection. $30.5 million would be paid by the state. Additional $12 million can be used to cover potential overruns. This will be at MDOT’s discretion and taken from MDOT’s budget. Acquisition of adjoining parcels of land: $4.4 million * $5 million to mitigate wetlands. According to Gov. Phil Bryant applied to the U.S. Army Corps of Engineers prior to the Continental deal being announced. The plant would have an impact on more than 100 acres of wetlands. * 1 million to pay oversight fees to hire an engineer independent to supervise Continental’s site work. $2 million for improvements to railways. * $3.3 Million for water supply improvements. * $1 million for wastewater improvements. For project-related expenses that were incurred prior to July 1, 2015, the Hinds County Economic Development Authority will pay $278,000. For employee training, the cost of recruiting and training includes: $7.5 million for a new facility. Continental will reimburse Hinds Community College $3.5 million for travel expenses related to training incurred by employees. Post-employment customized training of up to $3 million, including animation, 2D and 3D apps, and gaming. * $1 million to provide a workforce grant and temporary office grants for new hires and relocation of existing employees. * $1 million to purchase equipment for training-centers. $416,000 to cover proctoring fees for employee assessments. $170,000 to purchase customized assessment equipment. This equipment would be the property of Hinds Community College. * $20,000 to reimburse the company for hiring outside vendors to perform screening, assessment and training. The Continental project has been compared to other industrial economic growth projects that have taken place since 2000 by supporters. Canton’s Nissan plant received $363 million in state tax breaks before its 2003 opening. According to a recent analysis done by Mississippi State University’s National Strategic Planning and Analysis Research Center, Nissan has created 6,400 jobs at its plant and 25,000 across the state thanks to the multiplier effect. According to the report, Nissan has contributed $2.6 billion to the state’s disposable income and generated $2.9 billion each year to its gross domestic product. Some Mississippi politicians are not as enthusiastic about the potential economic impact of Continental. Senator Chris McDaniel (Republican from Ellisville) is one of six Mississippi lawmakers to vote against the Continental tax incentives deal. He says that there is little evidence that large-scale economic developments are beneficial for long-term fiscal health. McDaniel stated that bridges and roads must be repaired, state employees have to be addressed, and Mississippi Today cannot address them if it isn’t throwing around corporate welfare. Clarification: This story has been updated in order to clarify that the “additional within-the-fence grant” can deduct several costs. Support this work by making a recurring gift today to celebrate our Spring Member Drive and help us continue important work such as this story. Our reporters give a human face to policy’s impact on everyday Mississippians by listening more closely and understanding their communities. To ensure that our work is aligned with the priorities and needs of Mississippians, we are listening to you. Click the button below to let us know what you think. Republish this Story