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Lansing City Council endorses tax breaks for GM battery plant

Lansing City Council on Monday moved forward with supporting a $2.5 billion investment from General Motors Co. for a battery cell manufacturing plant near its Delta Township assembly plant.

Council approved a resolution recommending the formation of a renaissance zone for the development in an application to the Michigan Strategic Fund. Granting a renaissance zone exempts persons and property from taxes levied by the city. This renaissance zone would be in place 18 consecutive years starting in December 2022, or whatever date that’s set by the Michigan Strategic Fund, the governing body of the Michigan Economic Development Corp.

GM and battery partner LG Energy Solution through their joint venture Ultium Cells LLC are seeking local and state tax incentives for the multi-billion battery cell plant investment that they say will bring 1,700 jobs to the area when fully operational. Details were first acknowledged publicly on Friday when Lansing city government released the council meeting agenda with information about the potential investment.

After losing out on a multi-billion investment by Ford Motor Co. for electric vehicle development, state and local officials are pushing to offer up incentives to get GM to invest billions in its home state. GM is planning to spend $35 billion on EV and autonomous investments through 2025.

Michigan lawmakers and Gov. Gretchen Whitmer’s administration are working on a major new economic development program, which could gain final legislative approval on Tuesday. The program would allow the state to provide funding for large projects, such as GM’s potential battery cell plant investment.

The Detroit automaker plans to have four U.S. battery cell manufacturing plants to meet its EV goals including selling 1 million EVs by mid-decade. GM has so far revealed the locations for two of those plants: Lordstown, Ohio, and Spring Hill, Tennessee.

The property in consideration for this project is technically located in Delta Township, but more than 20 years ago, Delta and Lansing signed an economic development agreement transferring the property from the township to the city. Lansing assesses and collects the taxes on the property, according to the agreement. The tax revenues are then divided between the two.

On Monday, both Lansing council and the Delta Township board approved extending that agreement through 2046. The extension “clears any obstacles for new economic development in this area and provides clarity for an additional 25 years for the township and city,” according to a memorandum included the Delta Township meeting agenda.

“Lansing and Delta Township worked jointly to be a good home for General Motors and … that collaboration and spirit of working to put forward the best possible proposal to land these plants is something that is still happening here in Lansing and I think it really is one of the reasons why we are a great area for this,” Delta Township Supervisor Ken Fletcher said. “And you add in our long-term history of being an automotive-focused region, and (the) experienced, skilled workforce that we have here are all the reasons why we hope that we’ll be selected.”

GM spokesman Dan Flores said in a statement the company “sincerely appreciates the support of the City of Lansing and Delta Township.”

“As we’ve previously mentioned, securing all available tax incentives plays a critical role in any business case moving forward,” he added. “Approving our tax incentive applications is a positive step forward, however, the proposed project is not approved. I’m not going to speculate on GM leadership making a final determination on the business case under development.”

Lansing is also considering an industrial tax exemption for GM’s battery cell plant project. A public hearing is set for that request on Dec. 20.

In addition to looking at investing in the Lansing area, GM is also considering investments at its Orion Assembly plant in Lake Orion to make electric trucks there based off of its new Ultium electric platform, sources previously told The Detroit News.

The Orion plant builds the electric Chevrolet Bolt EV and EUV.   GM is planning to invest $160 million at its Orion Assembly plant for construction of a new battery pack assembly line and filed an industrial tax exemption request with Orion Township for the “proposed investment … primarily for the construction of an addition and land improvements for a new battery pack assembly facility.”

Battery packs house the battery cells that power EVs.  There will be a public hearing in Orion Township on the tax exemption request Dec. 20.

Posted By: The Detroit News on December 13, 2021.  For more information, please click here to read the source article.

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