Work to develop the site for one of Georgia’s largest economic development projects continues for EV-maker Rivian as multiple cases work their way through courts.
Fulton County Superior Court Judge Thomas A. Cox Jr. ruled on April 21 that the state is entitled to a bond of $364,619.55 before a lawsuit concerning zoning for the Morgan County portion of the project can continue because it is unlikely to succeed.
The law states, according to the judge’s order, that the opposing party has “asserted a claim … to which there existed such a complete absence of any justiciable issue of law or fact that it could not be reasonably believed that a court would accept the asserted claim.”
Basically, due to the state’s ownership of the land that was purchased from private landowners, local zoning ordinances no longer apply, according to attorneys for the State of Georgia.
The order outlines the $5 billion investment by Rivian, “to build an environmentally conscious campus on property located in Walton and Morgan counties, near the city of Social Circle.”
It suggests the company will eventually produce up to 400,000 electric vehicles per year and create 7,500 jobs locally.
In addition to buying the property, the state has committed to:
• A $21,320,000 Regional Economic Business Assistance grant to the Joint Development Authority of Jasper, Morgan, Newton and Walton Counties (JDA)
• $899,950 in engineering expenses
• Bearing the cost of purchasing stream and wetland mitigation credits, which was budgeted at $14,397,753
• A Quick Start training facility to train employees, budgeted at $62,500,000
• A Mega Project Tax Credit of $5,250 per job per tax year for five years This creates “substantial public benefit,” the state alleges, and follows the Georgia Department of Economic Development’s (GDEcD) mandate “to create economic and employment opportunities in the state.”
After the judge’s ruling, the GDEcD and JDA issued a joint statement, calling the plaintiff’s effort to derail the project meritless and insisting that it is wasting taxpayer money.
“Rivian’s manufacturing facility is being constructed on state-owned land for the governmental purpose of economic development,” the statement reads. “As Judge Cox confirmed, it is well-established in Georgia law that state-owned property is exempt from local zoning and other regulations when it is used for a governmental purpose.”
In another case that has been argued before the Georgia Court of Appeals, the question of whether $700 million in property tax breaks related to the Rivian project is legal.
Ocmulgee Judicial Circuit Chief Judge Brenda Trammell ruled in September 2022 against validating bonds for Rivian, a process that is typically a rubber stamp for economic development.
That decision was appealed and was argued in front of the court of appeals by former Georgia Supreme Court Chief Justice Harold Melton, who is representing the appellants.
A ruling by the Appeals Court is not expected until June.
Trammell’s concerns were largely due to Rivian’s questionable financial backing.
“Rivian’s cash reserves are quickly drying up, thus casting serious doubt on whether it will be able to commence, let alone complete, the project,” Trammell wrote in her opinion.
The decision went on to say the JDA has not “put forward sufficient evidence demonstrating that the project would promote the ‘general welfare within the territory of the authority.’”
According to an Atlanta Journal-Constitution story from March, Rivian has plans to sell $1.3 billion in bonds to shore up its Georgia factory.
Citing production woes, Rivian posted a $6.8 billion loss in 2022, causing the stock price to plummet. It was then valued at $14.64 per share. As of April 25, it is down even further at $12.02.
Rivian’s comments from CEO R.J. Scaringe to the AJC in March remained optimistic, however, as the company ended 2022 with $12.1 billion in cash reserves.
“We’re committed to this state and this project,” he said. “The future of our company in terms of scaling and growing really relies on the future of this project. There’s no other option. We’re not planning an alternative. This must work.”