Latest ECD incentives: $28M to Finnish tire maker, $22M to South Korean appliance firm

The state of Tennessee is providing a $28.42 million grant to a Finnish tire manufacturer and grant of $22.3 million to a South Korean appliance manufacturer to support the companies opening of new facilities within the state, reports the Times Free Press.

State Building Commission members last week unanimously approved the nearly $30 million for Nokian Tyres which plans to build its first U.S. tire plant in Dayton, north of Chattanooga. Scheduled to open in 2020, the 830,000-square-foot plant initially would employ some 400 workers. (The company says it’s investing $360 million.)

… Building Commission members also gave approval to yet another major economic grant involving a planned $250 million manufacturing plant in Middle Tennessee.

That involves $22.3 million for the deal struck by the Haslam administration and South Korean manufacturer LG Electronics USA Inc. to build a manufacturing plant in Clarksville, north of Nashville.

Just as with Nokian, the money doesn’t flow directly from the state to the company — that’s a legal no-no under the Tennessee Constitution. Instead, the deal relies on the state’s standard work-around — sending the grant dollars in this case to the Industrial Development Board of Montgomery County.

The plant will manufacture household appliances and employ about 600 people.

…Tennessee uses clawbacks to recoup public dollars in the event a company does not follow through on its commitment. The grant includes a requirement that the grantee provide a 25 percent payment bond securing Tennessee’s grant funding.

… In both instances, Republican Gov. Bill Haslam’s Improve Act played a role. The bill raised road funding by increasing gas taxes, which had been lagging. But at the same time it also slashed three taxes for general state government that have been booming. Among them was a decrease in state corporate taxes for manufacturers operating in Tennessee.