Courting Hyundai cost Kentucky $130,000

By

Posted 3:04AM on Friday, April 19, 2002

LOUISVILLE, KENTUCKY - The quest to land Hyundai Motor Co.'s new assembly plant cost Kentucky at least $130,000, but a spokesman for Gov. Paul Patton says it was money well spent. ``We feel that whatever the minuscule cost was, it was well worth it,'' said Rusty Cheuvront, Patton's press secretary. ``Coming in second in a field that started with 51 sites in nine states just enhanced our reputation as a great place to do business.'' The state Cabinet for Economic Development and other state entities released records under the Kentucky open-records law that show spending on lawyers, entertainment and travel, The Courier-Journal of Louisville reported Friday. Hyundai considered a site near Glendale in Hardin County before settling on Alabama earlier this month. State records show that since last May, Kentucky representatives made three trips to South Korea, Hyundai's corporate headquarters, and four trips to California, where Hyundai maintains its main U.S. offices, as well as related trips involving Washington, D.C.; Florida; Atlanta; and several cities within Kentucky. The purposes of the trips were generally described as meeting with business clients. Expenses included overnight lodging, meals, air fare and phone calls. Much of the out-of-state travel was done by Gene Strong, secretary of the Kentucky Cabinet for Economic Development and one of the state's lead negotiators with Hyundai; and Jim Navolio, Kentucky's commissioner of business development. The automaker announced April 1 that it will build its first U.S. plant near Montgomery, Ala., thus deciding against Kentucky, Ohio and Mississippi, among other states. The $1 billion plant is expected to employ about 2,000 people and produce about 300,000 midsized sedans and sport utility vehicles a year after it begins operating in 2005. Kentucky essentially entered the chase for the plant last May, when a Kentucky delegation including Patton, Strong and Navolio met Hyundai Chairman Chung Mong-koo in South Korea in a social call that cost at least $8,800, according to travel vouchers. The following month, Hyundai formally requested a bid from Kentucky to compete with other states for the plant. Last Thanksgiving, Patton, Strong and Navolio returned to Korea to look at Hyundai facilities before beginning more serious negotiations in December. Cost: more than $18,000. The third trip to Korea, in January, cost more than $17,000 in travel expenses, but another major expense was legal fees. Stites & Harbison in Louisville billed Kentucky about $65,000 in Hyundai-related expenses and legal fees from November through the end of March. Firm partner Mike Herrington said the work was done at half the normal rate. Overall, Kentucky's entertainment, travel and legal costs appeared to exceed rival Ohio's, but came in at less than Mississippi. Ohio spent about $21,000 for such expenses as air fare, hotel rooms and plane and helicopter trips over potential sites, according to state documents released at the request of The Associated Press. The AP reported Mississippi spent $386,241 between late July and early March, including $212,035 paid to an engineering company to determine the suitability of certain sites for road, utility, water and sewer work. In reflecting on Kentucky's efforts, Strong said the estimate of direct expenses ``is not unreasonable. Most of it was air fare. There wasn't a significant amount of entertainment. Overall, he said, ``it was absolutely worth it. It was a significant project, and we pursued it to the end. We did what we needed to do.''