Deal for $5.5 billion Hyundai plant in Georgia nears final approval
SAVANNAH, Ga. (AP) — The local economic development agency that worked with Georgian officials to recruit Hyundai Motor Group to build a $5.5 billion electric car factory near Savannah on Tuesday approved its parts of the agreement, although details of the tax breaks and other incentives have yet to be disclosed.
The Joint Development Authority that voted to complete the deal represents four southeastern Georgia counties that will waive hundreds of millions in taxes in exchange for at least 8,100 jobs that Hyundai has promised to create. Officials said they would not release details of the incentive program until the state and Hyundai finalize the deal, possibly later this week.
“I think it’s very fair, I think it’s very fair,” Trip Tollison, who heads the Savannah Economic Development Authority, said of the deal. “I think that represents what the region needs for the business – the people moving here with all the jobs – to succeed.”
Republican Gov. Bryan Kemp called the project the biggest economic development deal in Georgia history when it was announced two months ago in Bryan County, where Hyundai plans to build the first U.S. the company dedicated to electric vehicles. The automaker plans to start construction next year and start producing up to 300,000 vehicles a year in 2025.
State officials said the incentive package would be similar to the $1.5 billion in tax and expense relief given to Rivian Automotive, which is planning an electric vehicle plant east of Atlanta.
The largest element of this Rivian package was $700 million in property taxes waived by local governments over 25 years. The company has agreed to pay $300 million in payments in lieu of taxes starting in 2023. The Savannah Harbor-Interstate 16 Corridor Joint Development Authority voted on Tuesday on how money from Hyundai’s payments in lieu of taxes would be shared, but did not communicate the expected amount. tax revenue is removed or how much Hyundai will pay.
Tollison, who works with the Joint Development Authority, said Bryan, Bulloch, Chatham and Effingham counties have yet to approve the revenue-sharing agreement. He said Bryan County will get the majority of the money, but other counties will share in the revenue as they invest money to buy land and build roads, and will also see growth from the deal. .
One of the main benefits for Hyundai will be an income tax credit worth an estimated $213 million. That’s based on the five-year, $5,250 per job credit Georgia offers for its largest development projects. If Hyundai did not owe so much corporate income tax, Georgia would instead give the company personal income taxes collected from Hyundai workers.
Hyundai is also likely to save hundreds of millions of dollars through sales tax exemptions on machinery and building materials.
State and local authorities have already spent $61 million to purchase 2,200 acres (890 hectares) for the project site in Bryan County. The partners then purchased an additional 700 acres (283 hectares), but did not disclose the cost of the additional land. The authority on Tuesday approved a $65.7 million contract to clear the land. It also approved a contract for the design of an entrance road.
Kia, another subsidiary of the Hyundai Motor Group, has secured more than $450 million in incentives for its plant in West Point, southwest of Atlanta. Georgia has promised SK Innovation $300 million in incentives for a $2.6 billion, 2,600-worker battery plant the Korean company is building northeast of Atlanta.
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Amy reported from Atlanta.