UPDATED: Incentive Package Details For Buyer Of Former Mitsubishi Plant
State and Bloomington-Normal Economic Development officials have found a probable buyer for the former Mitsubishi auto plant.
The Department of Commerce and Economic Opportunity has issued a news release about Rivian Automotive, a startup manufacturer possibly investing up to $175 million in the plant in Normal over the next eight years.
Bloomington-Normal Economic Development Council Director Kyle Ham says they have been working closely with Rivian for about four months.
"This will be certainly scaled over a period of time and when you are talking about this level of production in a facility of this size it takes a long time to get there. But, over a five year period those numbers will ramp up to 500 with up to a thousand jobs when they reach full production," said Ham.
The plant purchase from industrial salvage company Maynard's Industries hinges on approval of state and local incentives. Rivian is still in the early stages of development and pre-production.
"They are a technology company that is developing a portfolio of vehicles as well as services that will advance a larger shift in sustainable mobility," said Ham.
The Town of Normal Council will hold a special meeting Monday evening to consider economic development incentives. That would involve five years of complete property tax abatement by all taxing bodies with annual renewals based on investment and other targets achieved by the company.
Ham says the deal hinges on approval of economic development incentives.
"We'll be looking for a five-year, 100 percent property tax abatement," said Ham.
According to information for a special Normal Town Council meeting on Monday, Normal would also kick in a million dollars in cash. Other governmental bodies would also consider incentives, including the state.
"Taxing bodies will consider this in a tiered fashion. The company will have to meet certain criteria from year to year that involves capital investment, but also job creation that is tied to the year to year incentive," said Ham.
Investments in the plant would total 175-million dollars over eight years. The claimed average wage for the jobs is 54,000 dollars a year, according to the council information.
Sean McCarthy, the Acting Director of the Illinois Department of Commerce and Economic Opportunity said Rivian will be investing in the future of Illinois when they choose to purchase the plant.
McLean County Board Chair John McIntyre said the discussions with Rivian have been positive.
"We are progressing towards the goal of bringing investment to our community," said McIntyre.
"The auto industry is the fourth largest employer in the state and this investment gives Illinois a significant presence in the emerging electric vehicle market," said McCarthy.
Congressman Rodney Davis hailed the announcement as great news.
"We have always known that this community is home to some of the most-talented, driven workers right here in Central Illinois and this is reflected by Rivian's desire to invest and create jobs here. It's also because of the diligent efforts led by the Bloomington-Normal Economic Development Council, Town of Normal and Mayor Koos, the McLean County Board, and the Illinois Department of Commerce & Economic Opportunity to recruit new employers to the area," said Davis.
A state news release indicates Rivian's CEO is RJ Scaringe who led the company through a tough economic environment to develop Rivian's business strategy, vehicle platform, and financial positioning. The company is based in Detroit and San Francisco, according to the release. The company was founded in 2009. Its web site has been off line and under development for some years, though there are cached versions available.
Details of the Agreement
Below are some of the details of the agreement published on the Town of Normal website:
2.02. The Company agrees to invest not less than $40,500,000 in and employ not less than 500 employees at the Property during the Project. The annual tax abatement under this Section is effective only if the following conditions are satisfied for the corresponding years:
(1) 2017 Property Taxes for the Property shall be abated in full if, prior to 12/31/2017, Company provides Satisfactory Proof of the total amount paid by the Company for the purchase of the Property, including all land, building and contents, and that the Company has invested $500,000 in Project Expenses;
(2) 2018 Property Taxes the Property shall be abated in full if, prior to 12/31/2018, Company provides Satisfactory Proof that it has invested $10,000,000 in Project Expenses and has a head count, as of 12/31/2018, of 35 Full Time Employees;
(3) 2019 Property Taxes for the Property shall be abated in full if, prior to 12/31/2019, Company provides Satisfactory Proof that it has invested $22,000,000 in Project Expenses and has a head count, as of 12/31/2019, of 75 Full Time Employees;
(4) 2020 Property Taxes for the Property shall be abated in full if, prior to 12/31/2020, Company provides Satisfactory Proof that it has invested $32,000,000 in Project Expenses and has a head count, as of 12/31/2020, of 300 Full Time Employees; and,
(5) 2021 Property Taxes for the Property shall be abated in full if, prior to 12/31/2021, Company provides Satisfactory Proof that it has invested $40,500,000 in Project Expenses and has a head count, as of 12/31/2021, of 500 Full Time Employees with an average weekly salary equal to or greater than the average weekly salary in McLean County.
3 Section Three Municipal Grant by the Town of Normal
3.01. The Town is authorized and agrees to provide to the Company a municipal cash grant in a single, lump sum amount of $1,000,000.
3.02. The Company agrees to invest $20,000,000 in Project Expenses within five (5) years after the Closing Date. 3.03. The Town’s obligation to pay the municipal cash grant becomes due upon the Company’s demonstration of Satisfactory Proof that it has incurred at least $20,000,000 of Project Expenses. The Town shall make payment of $1,000,000 to Company within thirty (30) days of demonstration of Satisfactory Proof of Project Expenses. If the Company has not paid at least $20,000,000 in Project Expenses within five (5) years after purchasing the Property, then the Town is not obligated to pay the Municipal Grant.