Community Renewal Good Stories - Southern Alabama

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Automotive Supplies Establish Niche Market in RC

Southern Alabama, RC

When a major automaker built a plant just 30 miles from the eastern border of the Southern Alabama RC, it turned the RC into a prime spot for automotive-related businesses. Realizing the marketing potential inherent in the RC's proximity to the Hyundai Motors plant, the Alabama Department of Economic and Community Affairs (ADECA) developed a strategy that has convinced three automotive suppliers to locate within the RC.

Working closely with the Alabama Development Office (ADO) and local economic developers, ADECA came up with a multi-pronged effort to entice automotive suppliers to establish operations within the RC. The agency developed brochures that explained the financial benefits of locating in the RC. It produced economic and financial models, using a cost-benefit comparative-analysis approach, that were based on a company's potential investment. ADECA gave presentations to prospective automotive suppliers as well as to ADO's industrial recruiters and local economic development managers and staff. After learning of the tax incentives available through the RC program, Todd Strange, director of ADO, described the combination of wage credit and capital gains provisions as "... one of the best recruitment tools in the State."

As a result of these efforts, three automotive suppliers have decided to locate in the RC and several others are considering doing so. In 2002 two automotive-related businesses, Hwashin Ltd. and Hysco America Company, Inc., agreed to locate in Greenville, Alabama.

A third automotive supplier, Sejong Industrial Company Alabama, decided to locate in Fort Deposit in Lowndes County, which has one of the highest poverty rates in the Nation. Collectively these plants will invest about $100 million in buildings and equipment and employ approximately 960 people. The companies will save thousands of dollars through wage credits, worth up to $1,500 annually for each RC resident a business in the designated area employs.

Construction at these three facilities began in 2003. Each manufacturer is eager to take full advantage of the CRD, a tax incentive worth $12 million yearly to each RC. Businesses within the RC may depreciate as much as $10 million in construction or rehabilitation costs over 10 years instead of the standard 39 years.

For more information on the programs of the Southern Alabama RC, contact Beatrice Forniss of the Alabama Department of Economic and Community Affairs at (334) 242-5464