Ala. Landowners in Court over Hyundai Land Deal

Montgomery, Ala., landowners who were paid almost twice the appraised value of their property are suing state and local officials, saying they were not properly paid for land where Hyundai located its auto plant in Montgomery.

The landowners say they were paid about $8 million less than they were due under an agreement with city and county officials in Montgomery.

Some officials say the legal battle is hurting the area’s ability to recruit other industries.

Hyundai now employs 2,900 people at its Montgomery plant, and its suppliers employ more than 5,700.

When Alabama was recruiting Hyundai in 2002, city and county officials reached an agreement with several landowners for a plant site in an agricultural area. The local officials agreed to pay all landowners the same — $4,500 per acre, which was almost twice the appraised value.

At the last minute, Hyundai officials told Todd Strange, the state’s chief industrial recruiter during Gov. Don Siegelman’s administration, that it needed more land to locate in Alabama.

Joy Shelton and her sister, Jeanne Walker, had earlier refused to sell their 93 acres for the original plant site, but they agreed to sell to the state for $12,000 per acre.

Now, two landowner groups that include Montgomery County Probate Judge Reese McKinney and Judge Joel Dubina of the 11th U.S. Circuit Court of Appeals are suing state, city and county officials, saying they violated the agreement by paying more for the 93 acres.

State officials say they were not bound by the agreement that city and county officials had with the original landowners.

McKinney said the lawsuit “is not about the people involved — it’s about doing right.”

But it has strained friendships.

Bill Joseph, former chairman of the Montgomery County Commission, told the Montgomery Advertiser in a story Tuesday that he helped get McKinney appointed probate judge in 1998.

“I can never support him again,” Joseph said. “He has personally called me a lair and a fraud.”

The dispute appears to have had a negative impact beyond the landowners.

“I know it has had an effect on the feelings that Hyundai has with Alabama, and it could have had some effect on the locating the Kia plant in Georgia,” Montgomery Mayor Bobby Bright told the Mobile Register.

The Montgomery Area Chamber of Commerce had been a defendant, but its insurance company has agreed to pay $1 million to get it out of the litigation, according to court records.