Monday, April 08, 2002

Property dispute may have turned off Hyundai




The Associated Press

        FRANKFORT, Ky. — Two weeks before Hyundai Motor Co. chose Alabama over Kentucky as the site of its new $1 billion auto plant, Gov. Paul Patton says felt the tide turning against Kentucky, the Courier-Journal reported.

        Mr. Patton said he heard it in Hyundai executives' voices.

        “Just the general tone of the conversation and the continued questions about the state's ability to deliver,” Mr. Patton told the newspaper on Wednesday.

        Kentucky's efforts to acquire land for the 1,600-acre site Hyundai requested near Glendale in Hardin County were not going well. One family was holding out and another landowner had complained he was cheated on price.

        Meanwhile, Alabama's competing 1,600 acres near Montgomery were safely in that state's hands. In Kentucky, things were messy.

        “Not being able to get the property that they wanted brought into question the ability of the state to deliver,” Mr. Patton said. “The publicity ... began to have them doubt the community support.”

        On April 1, Hyundai chose Alabama for the plant and its estimated 2,000 jobs.

        Kentucky's Glendale site would be a close second in a field that started with 51 sites in nine states.

        How the state joined the hunt for Hyundai is a story of chance opportunities, secret meetings, overseas trips and old-fashioned arm twisting.

        Last week, Mr. Patton and others agreed to talk about the process and how it almost worked.

        “The first thing that I heard — the economic-development people out of Frankfort kept this confidential — we heard they were purchasing options to buy in Glendale, and after you get that started you pretty well find out what's going on,” said Hardin County Judge-Executive Glen Dalton. “We didn't think it was ... this big.”

        Speculation about the project “has been around for a couple of years,” said Gene Strong, secretary of the Kentucky Economic Development Cabinet and one of the state's lead negotiators. “It became more of a conversational item early last year.”

        As the buzz grew louder, University of Louisville President John Shumaker arranged two meetings with top Hyundai officials who also are his longtime friends. In April 2001, Mr. Shumaker said, he set up a meeting between Jim Navolio, Kentucky's commissioner of business development, and Bo Ahn, president of Hyundai subsidiary Kia Motors.

        In May 2001, Mr. Shumaker also arranged for Mr. Patton, Mr. Strong and a small delegation to meet Mr. Chung in South Korea.

        “I believed that really opened the door,” Mr. Patton said of that first meeting. “That was very important in getting us started. We feel like we were having difficulty being considered, that they were looking south of Kentucky.”

        The next month, Hyundai formally requested a bid from Kentucky officials. Nine states and 51 sites made the initial cut. A crowded field, but Kentucky was in the game.

        Land was a complication for the Kentucky bid. Hyundai planners had become enamored with a 1,600-acre parcel in Glendale, near Interstate 65's “auto alley” that runs from Indiana to Alabama and includes a number of auto-related industries.

        In mid-March, the state and landowner Kenneth Floyd reached a settlement. The Howlett impasse remained.

        “Originally, we told the company that we were prepared to condemn the property,” Mr. Patton said. “We felt we would prevail and the company's attorneys agreed to that.”

        Mr. Patton said that when Hyundai officials were visiting the Glendale site, “they were very eager that we begin the condemnation process. We began it immediately after the site visit (in late January). That's when we knew they were serious about us, because they would not have asked us to do that if they had already discounted Kentucky.”

       



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