Normal Council Backs Rivian Deal For Mitsubishi Plant
After agreeing that it is a low-risk, high reward proposition Normal council members last night unanimously approved an incentive package to lure a start-up electric car manufacturer to the former Mitsubishi plant. Rivian is an automotive technology company developing vehicles and services to advance the shift to sustainable mobility which would include automation and car-sharing models.
The company currently has operations in both the Greater Detroit and San Francisco Bay Areas and would reconfigure the Normal plant for its vehicle production. The council heard from some community members who questioned Rivian's history and financing ability along with the need for incentives. Some also suggested delaying action but Maynards salvage company has already delayed auctions twice and would not be willing to hold off. After listening to a key executive for a couple of hours, council members who were skeptics became believers.
Rivian CEO RJ Scaringe says the first car will have some autonomous features and would require 500 employees by 2021. In addition to jobs, Rivian must also invest $40.5 million into plant improvements within five years before receiving a $1 million dollar grant and a five-year property tax abatement.
Normal Mayoral Rival Marc Tiritilli says he felt a little better after hearing from Scaringe. "If what he says really pans out to be true, then that would be good for the community, " he said. However, Tiritilli still has concerns about what happens if the plans fail and the building falls into disrepair.
Why the delays from Rivian's earlier projections?
Rivian will use cash to buy the plant and equipment. The entrepreneur and company founder explained he made mistakes and discarded some ideas while he was spending an extra two years working to raise capital at a time when the recession hit hard. He changed strategy and went after investors with big money and a stake in success such as a company described as "the largest global distributor of automobiles." He now has, in his words, "hundreds of millions of dollars" from shareholders.
Councilman Jeff Fritzen was impressed. "They've generated their revenue from, 'here's our ideas, here's our product, here's what we hope to do' and people said, 'I believe you' and they've provided the resources for them to do this so there are others out there that believe in them at even a higher level than we do," he said.
What About the Florida Deal?
City Manager Mark Peterson and Economic Development Director Kyle Hamm assured council members they've investigated the company and that criticisms from that circulated over the weekend from a Florida-based blog post were not based in fact. Rivian complied with terms of a grant given by Florida for research that was produced but with no promise of production in that state. The two officials drove a prototype of Rivian's semi-autonomous, electric car last week and Peterson said it was amazing. He also indicated local banking experts and state leaders from the Illinois Department of Commerce and Economic Opportunity have vetted the company and its finances.
Sean McCarthy, Acting Director of the Illinois Department of Commerce said, “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.” It is not clear yet whether any state incentives will be part of the final deal.
Other taxing bodies will have to approve the deal. Heartland Community College board of trustees will vote on the package tonight.