A Chinese battery parts company expects to invest about $2.4 billion in private funds and create 2,350 jobs over roughly the next decade with a manufacturing facility that sprawls across two townships and 19 parcels of land on the outskirts of Big Rapids, according to the first public documentation chronicling the development code-named “Project Elephant.”
Economic developers seeking to secure the Gotion Inc. development over the past several months provided the details of the project to local communities Thursday in an application seeking to secure a Renaissance Zone designation making about 523 acres virtually property tax-free for 30 years.
The investment is a decrease from the more than $3 billion total local officials understood the spending to be just a couple of days ago but still a huge investment for the west Michigan area, Big Rapids Township Supervisor Bill Stanek said. Stanek explained details of the investment have been fluid in the final days ahead of the Renaissance Zone application.
In the Thursday application for the tax breaks, Grand Rapids-based economic development group The Right Place emphasized the impact Gotion would have in direct and indirect benefits in terms of job opportunities and housing, as well as population retention and growth. The Right Place has been working with the local communities and state to secure the development project for the Big Rapids area.
According to The Right Place, Gotion chose Michigan over six other states: Ohio, Georgia, Illinois, Kentucky, South Carolina and Texas.
“The automotive industry is transitioning to electric vehicles,” the application said. “The state of Michigan has always been the leader in the domestic automotive industry. Projects like Gotion, Inc.’s help to cement that prestigious designation for Michigan.”
Big Rapids Township, Green Township and Mecosta County will meet at 7 pm Monday at the Mecosta-Osceola Career Center in Big Rapids to consider the application for a 523-acre Renaissance Zone for the development, which will stretch across 18 Mile Road to encompass land in both Green and Big Rapids townships.
The property is located between US 131 and the Big Rapids airport. About 408 acres are located within Green Township and 115 acres within Big Rapids Township.
Monday’s agenda includes presentations from Gotion, Ferris State University and The Right Place before the townships’ and county boards vote on a resolution to consent to the Renaissance Zone’s creation.
The Renaissance Zone’s creation is then expected to go in front of the Michigan Strategic Fund board at a future meeting. It’s likely the project will also be considered for some kind of state taxpayer incentive through Michigan’s Strategic Outreach and Attraction Reserve fund, which has been used this year to secure other high-level automotive investments from General Motors Co., Ford Motor Co. and Hemlock Semiconductor.
In Thursday’s application, Gotion Inc. is described as a “fast-growing energy solutions company headquartered in the Silicon Valley of California.” The US subsidiary of China-based Guoxuan High-Tech Co., Gotion Inc. also has a facility in Independence, Ohio, and locations in Shanghai; Singapore; Tsukuba, Japan; and Göttingen, Germany.
Volkswagen AG holds about 26% of Gotion’s shares and is considered its largest shareholder.
“The company is an innovator of battery technology with core areas of development in electronics, battery packs, and next-generation storage technology,” the application said.
Sources have told The Detroit News previously that the 30-year tax exemption would amount to about $2 billion in property tax relief over that term of years.
Thursday’s application lists a variety of taxes the project would be exempt from, including about $13 million in annual property tax savings. Renaissance Zone designations also exempt companies from state personal income and education taxes as well as local personal property and real property taxes.
The application does not list other public incentives offered to Gotion, only that they are “summarized in an MEDC offer letter to the company.” The News has requested a copy of the offer letter from the Michigan Economic Development Corp., a state agency.
The application projected the facility, which is set to roll out in four phases and focus on “the innovation & manufacture of battery materials,” would be completed by 2030, with an investment of $2.4 billion over the first six years. Between $360 million and $450 million would be invested in each of the first four years and $820 million in the last year, according to the document.
The application includes an estimate of about 586 jobs to be created in the first year of operation, or through 2024; 556 in the third year of operation; and 723 in the fifth year of operation, or through 2028. Gotion expects total employment at the plant to reach 2,350 full-time jobs by 2031.
The application listed an expected annual average wage of $61,995, about 35% higher than Mecosta County’s median household income ($45,797) in 2020, according to Census data.
“Through the fruition of this proposed industrial development project, Gotion, Inc. has the potential to be the largest employer in the multi-county region,” the application said.
Ferris State currently is the largest with about 1,400 employees. “Along with Ferris State University, this proposed renewable energy facility project of Gotion, Inc. would become a base of the local as well as regional economy,” the application said.
The application notes that Gotion plans to give first priority to US suppliers when it comes to non-Michigan goods or services it may need, but “many of the commodity elements of advanced batteries are sourced globally as the US does not currently produce the raw materials necessary for battery production.”
The project would require about $14 million in infrastructure improvements, according to the application.
The improvements would include about $1.7 million for sanitary sewers, $3.6 million for road improvements, $3.9 million for water storage and mains and $4.8 million for the costs related to engineering, designing and administering the projects.
The company also noted that it would be seeking a variety of permits to complete the project, including those related to roadwork, site development, water supply, building zoning or water quality.
Gotion is expected to contract for utilities with Consumers Energy, which already has economic development electricity rates set and on Tuesday said it was “close to a potential partnership and transformational opportunity in the advanced manufacturing field in Big Rapids.”
Steve Locke, superintendent for the Mecosta-Osceola Intermediate School District, said there is cautious optimism in Big Rapids about the “potential positive impact this project would provide.”
“It’s hard not to be excited about the potential benefits to our students, families, and the whole community associated with this project,” Locke said in an email to The News. “While we don’t know many details, the purported massive size and scope of the project are unlike anything I have seen in our area.”
Staff Writers Kalea Hall, Riley Beggin and Mark Hicks contributed.