Lawrence County’s request for road money sparks discussion about Alabama incentives

A northern Alabama county seeking money for a road project faced tough questions Monday from a state board that oversees funding.

The Alabama Industrial Access Road & Bridge Corporation committee agreed to pay almost the entire cost of a $1.66 million project in Lawrence County that provides First Solar, a company based in Arizona, with an access road leading to the manufacturing facility that is currently getting built. The county agreed to contribute $100,000 for engineering. The state will pay the remaining cost.

But John Cooper, the executive director of the Alabama Department of Transportation (DOT) and chair of the committee, said Monday the county should be doing more.

“I am going to be direct; I think you should put more than $100,000 into the project,” he said to Lawrence County officials during the meeting. “I think this story plays out too often that folks like you come here, and other places, in Montgomery, and tell, quite honestly, a sad story about where we are. We never particularly participate in getting to that point. We just hear from you, ‘oh, we need all this help.’ I really think you should put more skin in the game.”

First Solar did not respond to a message Tuesday seeking comment.

DOT typically partners with local municipalities for road projects, and the request from Lawrence County, with a population of about 33,000 people, is one of many that the state receives from counties. But the request sparked discussion at Monday’s meeting about the scope and purpose of Alabama’s incentive packages for business.

Local limits

Counties in Alabama have few options for raising revenues themselves to build and maintain roads they oversee, forcing them to rely on the state to fund many of their road infrastructure needs.

“Counties are extremely reliant on the revenue received from the statewide gasoline and diesel fuel taxes,” wrote Sonny Brasfield, executive director of the Association of County Commissions of Alabama, in an email on Tuesday.

Lawrence County levies a fuel tax, but the local tax does not generate enough money to pay for the full cost of the road project for the planned development to move forward. Without the assistance from the state, the county could not have the funding necessary to build the infrastructure to support the development, losing out on First Solar’s business to another location.

“The Legislature has given a limited number of counties the authority to levy local gasoline and diesel fuel taxes,” Brasfield wrote. “The only other real option for funding road and bridge projects is shifting ad valorem tax revenue from the county general fund to transportation infrastructure projects. This is allowed by Alabama law, but most counties need that funding for law enforcement and jail operational costs.”

The project involves upgrading about 1.22 miles of road near the intersection of Cooperage Way, also known as County Road 700, and County Road 222 west of the town of Trinity between Morgan and Lawrence counties in the northern part of the state.

The money will pay to pave the southern part of Cooperage Way, currently a gravel road, that connects with County Road 222. It would also upgrade a section along County Road 222 to the access point to the parking lot where employees would park.

“We are having to widen both sides of County Road 222 to get the lane widths up to standard for the traffic counts and get the turn lanes in for the number of vehicles coming through,” said Blake McAnally, owner and president of Pugh Wright McAnally, a civil engineering firm working on the project.

The upgrades are necessary to separate vehicular traffic associated with the First Solar manufacturing facility from trucking traffic near the site.

“Also, the fire marshal’s office wanted to have additional access to the site, not just the one,” said Blake McAnally, owner and president of Pugh Wright McAnally, a civil engineering firm working on the project.

The project will provide road access to a 2.6 million square foot manufacturing facility that First Solar will use as part of its business.

“That one floor is 43 football fields,” McNally said during the meeting. “That is how big this building is.”

Looking for jobs

First Solar’s plan to locate in the area has been a key component for addressing the county’s workforce-related needs. The county lost about 1,500 jobs when International Paper closed a local operation in 2015, according to Tabitha Pace, president and CEO of the Lawrence County Industrial Development Board.

The unemployment rate for Lawrence County is 2.8%, according to the Alabama Department of Labor. The state rate is 2.2%.

According to McNally’s presentation, the company is investing more than $1 billion to assist with building the facility. The company would provide jobs and contribute tax revenue to fund the area’s school funding needs. First Solar could offer up to 800 jobs for residents and 23 years of taxes totaling about $46 million to the education fund.

“It would be one of our largest employers in the county, if not the largest,” said Winston Sitton, an engineer with the county. “It would be huge. The boost to the education budget is going to be huge.”

Lawrence County is contributing about $1.3 million in funding and providing tax incentives.

“What you are really asking us to do is to pave the building of a road around the facility,” Cooper said. “Technically the property abuts a public road already.”

The state provided almost $3 million to help with the development, offering a community development block grant and Appalachian Regional Commission grant to help pay for water and sewer facilities at the location.

“Commerce is recommending to support the grant,” said Angela Till, deputy secretary for the Alabama Department of Commerce. “We confirmed the jobs, the investment, but we don’t commit to what the board is wanting to approve.”

Cooper expressed concerns about an imbalance in the financial incentives that the county contributed to the project. The state, he said, footed most of the expense, not only for the infrastructure but the financial incentives to bring the company to the state.

In a November press release, Gov. Kay Ivey said the company would invest $1.1 billion for the development as part of the company’s plan to scale its American manufacturing footprint to more than 10 gigawatts by 2025.

Commerce has invested in the project totaling about $18.5 million.

Local officials had been looking for an investor who would be willing to develop that site, hoping that some corporate entity would take root in the community and contribute to the local economy. First Solar was the one company that agreed to take the property and develop it.

“It was really one of those projects that just fit,” said Pace. “I know that you talked about the layout, but they looked at every way they could lay out on that site.”