The state last week emerged the winner of a high-stakes bidding war for a $300 million auto assembly plant planned by the German auto maker Mercedes Benz.
The 1,500-worker facility that the firm hopes will be completed by 1997 will be located on a 1,000-acre parcel of land near Vance, a small town in west central Alabama.
"It is with pride ... that we stand here today to welcome Mercedes Benz to Alabama," said Gov. Jim Folsom last Thursday in a ceremony at the University of Alabama in Tuscaloosa.
Four other states - Tennessee, North Carolina, South Carolina, and Georgia - were finalists for the facility.
But the deal was apparently clinched after the Alabama Legislature approved tax abatements worth about $100 million, according to Mercedes Benz officials. Also, the Tuscaloosa City Council and the Tuscaloosa County Commission together put up $30 million for the site.
The incentive package that helped the state land the plant included a revision of state law that expands the powers of the State Industrial Development Authority to permit the agency to finance new and expansion projects. Under the legislation, companies bringing business to the state will receive some special incentives to sell industrial revenue bonds to finance such projects.
In particular, these firms would receive a tax credit against their corporate income taxes for the amounts paid as principal and interest on the bonds. Also, the companies would be permitted to collect a "job development fee" of up to 5% of gross wages from new employees and use the funds to pay debt service.