Hall County waived its right to stimulus bond financing, opting instead to use the funding to help jump start the new King's Hawaiian operation in Oakwood.
The county voted at its most recent board meeting to return its approximately $17 million in federal recovery zone bonds back to the state of Georgia. Georgia collected the unused bond allocation along with other counties' funding to help attract the major industry to North Georgia.
King's Hawaiian, a California-based bakery, will construct a bakery and distribution center in Oakwood South Industrial Park off McEver Road over the next two years.
The company plans to create 126 new jobs followed by an additional 100 jobs around 2015.
As part of the American Recovery and Reinvestment Act of 2009, the federal government allocated tax-exempt recovery zone bonds by counties in each state. The purpose was for the counties to issue tax-exempt bond financing for private investment or economic development investments in the community.
Tim Evans, vice president of economic development at the Greater Hall Chamber of Commerce, said because there are so many counties in Georgia - the most of any state besides Texas - the individual allocations were not enough to make an impact in each county.
"The way that the federal government allocated out the bond capacity didn't make much sense for Georgia," Evans said.
The Georgia General Assembly, lead in part by Rep. James Mills, R-Chestnut Mountain, passed legislation earlier this year allowing the state to pool the unneeded bond capacity of various counties to fund selected projects.
"It was a really smart move on behalf of the state and the legislature to recruit competitive projects to the state," Evans said. "Without that, a lot of this bond capacity would have gone unused."
The option to use the bond financing expires at the end of 2010.
"The bond allocations are use it or lose it," Evans said.
By returning their recovery zone bond capacity to the state, the commissioners essentially gave up $17 million to get $48 million for the King's Hawaiian facility in Hall County, Evans said.
The bonds will not create a financial obligation for Hall County. They are backed by King's Hawaiian.
The prospect of the federal bond financing played a big part in King's Hawaiian's decision to locate its new operation in Georgia.
"We were competing with Greenville and Spartanburg, SC," Evans said. "That was a factor in the final decision, so I think it's great we had that in our tool box to be able to reel in this company."
Assistant Hall County Administrator Phil Sutton said it was an easy decision for the county to waive its bond capacity.
"We don't need them," Sutton said. "We have other financing sources that don't have federal restrictions."
He said the county looked at the federal recovery zone bonds "very seriously" but decided they would be better utilized by King's Hawaiian.
"For a private company it's fabulous because they don't have access to that kind of low-interest borrowing," Sutton said.
King's Hawaiian expects to begin production at its new bakery and distribution center in fall 2011.
The company produces dinner rolls, sandwich and snack rolls, and round bread.