Vote paves way for $5 billion project to continue on site east of Atlanta.

MADISON, Ga. --- A Morgan County board signed off Wednesday on a property rental agreement that’s a centerpiece of the $1.5 billion incentive package offered to electric vehicle maker Rivian.

The 4-1 vote means the Morgan County Board of Assessors ruled the rental agreement, known as a usufruct, does not make Rivian’s interest in the property taxable. In essence, the decision will allow Rivian to rent the land and future factory buildings on the nearly 2,000-acre site without paying typical property taxes.

The rental agreement is one of several components of Rivian’s incentive package — and by far the largest — providing some $700 million in property tax savings over the 25-year term. Under the terms of the agreement, Rivian will pay more than $300 million over 25 years to local governments and school systems under a payment in lieu of taxes agreement or PILOT.

The Rivian incentive package is the largest Georgia has ever offered an economic development prospect. The state has also offered infrastructure improvements, grants, tax credits and free worker training and a training center.

Rivian in December confirmed plans to build a $5 billion factory along I-20 about an hour east of Atlanta in southern Walton and Morgan counties. The company has promised to employ 7,500 workers on the site, where it will make electric vehicles and batteries to power them.

Rivian must fulfill 80% of its jobs and investment promises by the end of 2028 and hold them through 2047, or else be subject to state claw back provisions, in which Rivian would forfeit some of the incentives, documents show. Rivian will be subject to annual compliance checks. Much of the package requires Rivian invest or produce jobs before those incentives can be claimed.

Walton County officials signed off on the rental agreement last month.

“We look forward to continuing this journey,” said Jerry Silvio, chairman of the Joint Development Authority (JDA) of Jasper, Morgan, Newton, and Walton counties, after the Morgan County assessors’ approval. “This is inevitable.”

A grassroots opposition group, however, vowed to continue fighting the Rivian project.

“There’s a lot of questions here,” said John Christy, an attorney representing opposition group No2Rivian. He added that the group is reviewing its legal options. “This is the beginning.”

Dozens of residents attended the meeting, and opposition leaders were angered that the Board of Assessors chair, Mary Ellen Anton, did not allow public comments and denied a motion by assessor John Artz to amend the resolution on the PILOT agreement. Artz, the lone no vote, is the spouse of a leader of the opposition group.

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Audience members react as the Morgan County board of assessors vote to approve the Rivian tax exemption proposal in Madison on Wednesday, May 25, 2022. (Bob Andres / robert.andres@ajc.com)

Credit: robert.andres@ajc.com

Audience members react as the Morgan County board of assessors vote to approve the Rivian tax exemption proposal in Madison on Wednesday, May 25, 2022.   (Bob Andres / robert.andres@ajc.com)

Credit: robert.andres@ajc.com

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Audience members react as the Morgan County board of assessors vote to approve the Rivian tax exemption proposal in Madison on Wednesday, May 25, 2022. (Bob Andres / robert.andres@ajc.com)

Credit: robert.andres@ajc.com

Credit: robert.andres@ajc.com

Under the rental agreement, the future Rivian factory property will remain under government ownership for 25 years. Instead of being taxed at the typical rate, Rivian will pay PILOT fees to four counties and local school systems that are members of the local development authority that controls the property.

The estimated $300 million-plus PILOT payments from Rivian over 25 years will recoup some of the tax revenue for schools and local governments that’s not collected under terms of the incentive package.

After 25 years, the property will be taxed at full value. But much of that PILOT revenue will be paid near the end of the agreement, documents show.

Combined ShapeCaption
An artist's rendering shows the planned exterior of Rivian's manufacturing campus planned for a site about 45 miles east of Atlanta.

Credit: Rivian

An artist's rendering shows the planned exterior of Rivian's manufacturing campus planned for a site about 45 miles east of Atlanta.

Credit: Rivian

Combined ShapeCaption
An artist's rendering shows the planned exterior of Rivian's manufacturing campus planned for a site about 45 miles east of Atlanta.

Credit: Rivian

Credit: Rivian

The land where Rivian will build its plant currently generates about $80,000 in tax revenue annually. Rivian will pay $1.5 million annually in PILOT fees for six years starting in 2023, increasing to $12 million in the seventh year. PILOT fees will grow to $20 million a year by 2044.

Opponents say they fear revenues from the PILOT agreement will not cover costs to come from the plant, such as needed future infrastructure improvements or from enrollment growth at schools.

“The Morgan County taxpayer is getting screwed,” Christy said.

The amount of PILOT fees could grow if Rivian’s investment at its Georgia plant grows, officials have said.

“Once you turn that spigot of revenue on, it never stops,” Silvio said. “I’ve always said I’d rather have part of something than all of nothing.”

The property rental deal was part of a broader “economic development agreement” made public earlier this month that outlined terms with the electric vehicle company, including environmental standards.

Last month, the state filed for certain federal wetlands permits from the U.S. Army Corps of Engineers, and approval could take six to nine months.

The JDA meanwhile, on Tuesday said it is in the process of completing its purchases of remaining parcels that will become part of the nearly 2,000-acre site. Those transactions should be completed by the end of next month and groundbreaking is expected in late summer, the authority said.

The JDA said it is will soon seek bids for grading work to be done on portions of the site that do not have wetlands.

Critics contend California-based Rivian, a well-funded startup, is a risky bet. Rivian faces tough competition from Tesla and other automakers, and is also grappling with production and supply chain issues.


A note of disclosure

Cox Enterprises, owner of The Atlanta Journal-Constitution, also owns about a 4% stake in Rivian and supplies services to the company. Sandy Schwartz, a Cox executive who oversees the AJC, is on Rivian’s board of directors and holds stock personally. He does not take part in the AJC’s coverage of Rivian.