The News & Observer
Raleigh, N.C.
March 24, 1995
Alabama seeks way to pay hefty Mercedes-Benz bill
State scrambles to come up with $42 million
Staff and wire reports
Copyright © 1995, The News & Observer
MONTGOMERY, Ala. -
In the fall of 1993, North Carolina was in the hunt
for the big one: Mercedes-Benz.
The big one got away. Now, it appears that landing the Mercedes-Benz
plant was more expensive for Alabama than most people here thought.
Just ask Alabama Gov. Fob James, whose administration is trying to figure
out how to pay the German automaker up to $42.6 million by April 1 under
the incentives package created by former Gov. Jim Folsom.
"We are looking at millions and millions and millions of dollars
that were committed with no provision to produce that revenue," said
Chris Bence, a spokesman for James.
"We will come up with a solution, but it sure has been tough. Now,
exactly what that solution will be, I don't know," Bence said.
Rep. Bill Fuller, chairman of the House Ways and Means Committee, said
this year's General Fund budget already is $3 million to $4 million in the
red. James is expected to ask for changes in the General Fund budget to
give additional money to prisons.
Fuller said there has been no mention in budget hearings as to how the
state will pay the German automaker.
The amount Mercedes will ask for is uncertain. The state agreed to pay
the company the amount it had spent on plant construction at its Tuscaloosa
County site as of April 1 =D0 up to $42.6 million. It also agreed to pay
$30 million for construction of a training building and $60 million to train
workers, with a schedule for payments unclear.
The Folsom administration used the lucrative incentives package to get
Mercedes to pick the Alabama site over other competing states for its first
U.S. assembly plant, which will produce a kind of sport-utility vehicle
that it calls an all-activity vehicle.
Tar Heel officials had tried to sell Mercedes on a 1,100-acre tract
in Mebane, just west of Orange County. North Carolina's incentives package
was estimated at $109 million - about one-third to one-fifth the Alabama
package.
Bence said the Folsom administration made no plans to pay the Mercedes
bill.
"It was kind of like the Scarlett O'Hara syndrome took effect:
We'll worry about that tomorrow," Bence said.
Used with permission.
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Copyright © 1995, The News & Observer.
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