The Kentucky Economic Development Finance Authority (KEDFA) has preliminary approved $146.5 million in tax incentives in order to secure a possible $531.2 million expansion of the Toyota plant in Georgetown, KY.
The expansion to add capacity for producing 50,000 units of a new vehicle model will create 750 new full-time jobs at average hourly wages of $26.
Of the total $531.2 million, building construction and improvements will require a $63.2 million investment. Equipment purchase will need $326 million, and the remaining $142 million would be required for tooling and packaging.
If Toyota Motor Manufacturing Kentucky, Inc. (TMMK) goes ahead with this expansion, the agreement with KEDFA calls for at least 570 of the 750 new jobs being created to be filled by Kentucky residents.
In return for adding the new jobs and retaining the existing 6,169 full-time jobs at the Georgetown plant, TMMK will get a total of $146.5 million in tax incentives over a 10-year period, starting with $50 million in the first year and $25 million for each of the subsequent two years.
TMMK gets these incentives only if they fulfill a commitment to invest $100 million in the first three years, and retain at least 6,066 full-time jobs at the plant over the 10-year period of the agreement.
The state is paying most of the $146.5 million in incentives through the Kentucky Jobs Retention Act, while Georgetown and Scott County are chipping in with 10 percent each.
This preliminary approval of the incentives package has been provided to TMMK so that it can successfully compete with other Toyota plants for the $351 million expansion. Toyota North America has not yet finalized which plant should get the new model, production of which has to begin in fall 2015.
TMMK is already Toyota’s largest facility in North America, and has an existing capability for manufacturing 500,000 vehicles and 600,000 engines per year. Toyota has invested $6 billion in the Kentucky plant to-date since the plant was established in 1986.