Wednesday, December 06, 2000
Toyota issued $71.5M bonds
Boone expects measure to generate jobs
By Ray Schaefer
HEBRON Boone Fiscal Court issued $71.5 million in industrial revenue bonds to Toyota Motor Sales North American Parts Kentucky on Tuesday to help pay for its parts distribution facility and to create 200 new jobs.
The more than 1-million-square-foot distribution building opened in June and employs 170 people. Toyota plans to hire 25 people a month, to a total of 370 by next spring, said John Owens, manager of human resources.
The facility is on 86.3 acres off Ky. 237, two miles south of the Interstate 275 interchange. It houses inventory, equipment and fixtures for Toyota's parts distribution operations, which supply all of its North American dealers.
Judge-executive Gary Moore said the county has been talking about the bond issue for two years, and it was part of the 1998 negotiations that brought Toyota to Northern Kentucky.
County Commissioner Robert Hay voted against the bonds because, he said, Boone County doesn't need to offer such tax breaks to be attractive to businesses. He said the bond issue discriminates against other companies and could force them to pay higher wages than they can afford.
Level playing field
We need to do nothing to maintain growth at a breakneck pace, he said. The best way to have level playing fields for all businesses is to develop infrastructure, and government does that well.
The 30-year-bonds are guaranteed by the county, which must pay them if Toyota defaults. Usually such bonds enjoy lower than market interest rates.
Toyota will also get a break on its real estate taxes, but not its occupational, employment and other taxes.
In addition, Toyota agrees to what is called an in lieu of taxes agreement, which means Toyota pays directly to Boone County taxes it would normally have sent to the state.
For this year, that is $42,634, which is usually di vided among Boone County's library district, health district, agriculture extension district and the Hebron Fire District, which gets the largest chunk - $19,984.58.
Toyota will also pay the county school district $112,180.08 this year. According to the county Property Valuation Administrator's Office, these property taxes are based on its current assessment of $26,646,100.
If not for the agreement, the money would have gone to the state, which could then distribute it to any district. But the agreement ensures that the money goes directly to Boone County, said County Administrator James Parsons.
It's very much a negotiating tool counties can use, said Paula Trautner, a spokeswoman with the Economic Development Cabinet in Frankfort.
Mr. Moore added that Toyota has done much to reduce traffic and other problems related to the new I-275 interchange, and the plant has brought higher-paying jobs to the area.
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