Jackson County GA
borders Gwinnett and Hall counties. If SK’s customers continue to sell hybrids
and need batteries, we should see the 2000 jobs planned near Commerce GA begin
to arrive between 2020 and 2025. The deal with SK was made in 2018 and the groundbreaking
was March 2019.
Congress is to blame for not lowering the US
corporate tax in 1993, implementing UN Agenda 21 in the US in 1993, passing the
2008 Meltdown - Community Reinvestment Act in 1993, allowing job-killing
regulations to explode in 1989 and allowing the cost of manufacturing to
explode in the 1970s. Foreign countries paid US corporations to add
manufacturing plants and now we need to pay companies to move back to the US or
add their manufacturing operations in the US. Huge incentives helped Georgia land battery
plant, by Scott Truby, 3/23/19, AJC. Package
for SK Innovation is one of state’s largest
Georgia’s biggest jobs deal in a decade came
with one of the state’s biggest-ever incentive packages.
The state
and Jackson County combined offered SK Innovation about $300 million in grants,
tax breaks and free land to convince the company to build an
electric car battery plant along I-85 in Commerce, according to an offer
letter obtained Thursday by The Atlanta Journal-Constitution through an open
records request.
Georgia’s
offer includes sales tax exemptions for equipment and energy as well as
research and development tax credits that could generate millions more in
benefits to SK Innovation for years to come, letter shows.
SK
Innovation held
a ceremonial groundbreaking Tuesday for the nearly $1.7 billion factory, which the company
said will employ 2,000 people and generate batteries to power 250,000 electric
vehicles per year at full capacity in 2025. It will rise on nearly 300 acres
about 65 miles northeast of downtown Atlanta.
The
incentive deal is the largest in Georgia since the $1.2 billion Kia Motors
factory opened in West Point in 2009. Kia was offered $410 million in subsidies
and other perks from state and local officials, according to data from Good
Jobs First, a left-leaning incentives watchdog group. The $300 million offered
SK Innovation would rank second.
Incentives
are a common and controversial currency in the job creation battle between
job-hungry states. Elected leaders often contend incentives are part of the
price of recruiting new jobs and investment.
Critics
say state and local governments often pay dearly for jobs and corporate
investments that would have happened anyway.
J.C.
Bradbury, a Kennesaw State University economist, said the promised jobs and
investment often don’t justify such heavy subsidies. “That type of
investment normally assures you a share of the profits. That’s generous,”
Bradbury said of the SK Innovation package.
In an
interview earlier this week, the company’s CEO, Jun Kim, said Georgia’s
offer was similar to packages from other Sun Belt states that courted the
company.
“But there
were other factors than just tax benefits that were weighed quite heavily on
our decisions,” Kim said, including workforce availability, the state’s business
climate and perhaps most importantly, Georgia’s Quick Start customized training
program.
“Since
we’re not planning to do just business for one or two years in the easiest
places and just exit, our plan is to find a place we could grow together with
the community as a part of the community,” Kim said. “The selection of the
location was more of a process of deciding who we wanted to work with.”
The bulk
of the state incentives are tax credits or exemptions that require the company
to hire and retain workers for certain periods of time, or make certain
investments for the company to claim the tax break. The $18.75 million state
grant also includes a claw back mechanism that allows Georgia to seek repayment
if SK fails to meet at least 80 percent of its combined jobs and investment
goal.
Georgia is
no stranger to blockbuster incentives offerings. The state’s unsuccessful pitch
for Amazon’s second headquarters featured more
than $2 billion in incentives, including a state-funded training academy, an exclusive lounge
and free parking at Atlanta’s airport and an Amazon-dedicated car on
MARTA.
Georgia
started recruiting SK Innovation, which is part of South Korean conglomerate SK
Group, near the end of former Gov. Nathan Deal’s second term. In October, about
six weeks before the
project was formally announced,
Georgia’s
top economic development recruiter delivered the state’s secret
offer. “Georgia offers unique assets that give your business the advantage
it needs to grow and compete,” Pat Wilson, the state’s commissioner of
economic development, wrote the company in a letter dated Oct. 10. “Georgia’s
outstanding logistics, well-trained and educated workforce, low business costs,
pro-business climate and high quality of life have landed it on a number of
“Best Of” lists.”
Included
in the “Best Of’ lists was Georgia’s top ranking for business by industry
publication Site Selection.
The
five-page letter, which referenced the battery factory as “Project Hercules,”
went on to detail tax breaks, grants and other perks SK qualified to
receive.
The list
includes:
· A state
project development grant of $18.75 million.
· 283 acres
of free land valued at $18.76 million.
· Mega
Project Tax Credits for new jobs created valued at more than $53 million if the
company meets its goals.
· Georgia
Quick Start training to prepare new workers valued at nearly $7.4
million.
The letter
values the state incentives at $176.8 million, not including potential ongoing
incentives such as the R&D tax credit and tax exemptions for qualified
machinery and software used in manufacturing, energy used in the manufacturing
of batteries and for high-tech investments such as equipment for sensitive
production areas known as “clean rooms.”
Jackson
County offered $122.7 million in incentives, including 20 years of property tax
breaks, according to the document.
Andres / bandres@ajc.com
The letter
valued the incentives assuming SK would spend $1.6 billion on the factory and
hire 2,032 people at an average wage of $40,000 per year within six
years.
Many
economists often tout the job-creating power of manufacturing because of the
potential for spin-off growth from suppliers and other ancillary
businesses. But Bradbury said such incentive packages are unfair to other
taxpayers who don’t receive the same sorts of subsidies and will shoulder a
greater tax burden.
Gov. Brian
Kemp said Tuesday landing SK “shows the commitment we have for remaining the
No. 1 state in the country for business.” Kemp said
“We’ll see
how it plays out over the years,” he said following the groundbreaking
ceremony. “But also, we have the great opportunity for other manufacturers and
suppliers to the company to come with them, which would just create good
opportunities further down the line for hardworking Georgians.
Norb Leahy, Dunwoody
GA Tea Party Leader
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