Rivian opponents contend Morgan County board erred in recent vote

Citizens opposed to the measure gather outside to talk with their attorney, John Christy, after the Morgan County board of assessors voted 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

Combined ShapeCaption
Citizens opposed to the measure gather outside to talk with their attorney, John Christy, after the Morgan County board of assessors voted 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

Lawyer for critics alleges flaws, but county dismisses concerns.

Plans for a $5 billion Rivian electric vehicle factory east of Atlanta are barreling forward after an incentive agreement cleared two key county votes, but an opposition group has raised concerns about the way one board approved it.

A lawyer for Morgan County Land, Sky & Water Preservation has sent a series of letters to the county’s Board of Assessors attacking the legality of the Rivian deal and the board’s action.

Last month, the Morgan County Board of Assessors approved a rental agreement that’s a central piece of the $1.5 billion package of state and local incentives offered to Rivian to build an EV factory on about 2,000 acres along I-20 in southern Walton and Morgan counties. A Walton County board approved the deal weeks earlier.

Atlanta attorney John Christy, who represents Rivian opponents, has raised questions about the way the Rivian lease was struck, contending the automaker shouldn’t be exempt from paying typical property taxes.

He also argues the board’s vote should be invalid because the group’s chair refused to allow public comment at the meeting, in accordance with a board policy. The opposition group, meanwhile, is also fundraising to support potential legal challenges.

Combined ShapeCaption
John Christy, attorney for the group opposing the measure, speaks with them after the Morgan County board of assessors voted 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

John Christy, attorney for the group opposing the measure, speaks with them after the Morgan County board of assessors voted 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

Combined ShapeCaption
John Christy, attorney for the group opposing the measure, speaks with them after the Morgan County board of assessors voted 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

The letters offer glimpses into potential legal strategies that Rivian opponents could take — though it’s yet to be seen if they will file a lawsuit challenging the deal, or intervene in the project’s required environmental permitting.

“There are various legal actions that can be taken which would challenge the board’s decision,” Christy said. “We are actively looking into that.”

Christy said he hopes the board will instead “realize that there was an error in not following the procedures,” rendering a lawsuit unnecessary. So far, he said, he’s gotten “crickets” from the county in response to his last letter.

Christian Henry, the attorney for Morgan County, said members of the public in opposition were allowed to comment at a previous meeting.

Officials with the Joint Development Authority (JDA) of Jasper, Morgan, Newton, and Walton counties say the agreement was lawfully approved.

Rivian lease

Under the deal, Rivian will lease the land from the JDA, a public body not subject to property tax. The rental agreement is the largest chunk of Rivian’s incentive package — providing some $700 million in property tax savings over the 25-year term.

Combined ShapeCaption
Location of Rivian's $5 billion electric vehicle factory east of Atlanta. The company’s site, about 2,000 acres along I-20 between the towns of Social Circle and Rutledge in southern Walton and Morgan counties, is about an hour’s drive from Atlanta and can pull from the metro area’s talent pool to fill its 7,500 planned jobs. Work on Rivian’s plant is slated to start this spring at a 2,000-acre site in Morgan and Walton counties.

Credit: ArLuther Lee

Location of Rivian's $5 billion electric vehicle factory east of Atlanta. The company’s site, about 2,000 acres along I-20 between the towns of Social Circle and Rutledge in southern Walton and Morgan counties, is about an hour’s drive from Atlanta and can pull from the metro area’s talent pool to fill its 7,500 planned jobs. Work on Rivian’s plant is slated to start this spring at a 2,000-acre site in Morgan and Walton counties.

Credit: ArLuther Lee

Combined ShapeCaption
Location of Rivian's $5 billion electric vehicle factory east of Atlanta. The company’s site, about 2,000 acres along I-20 between the towns of Social Circle and Rutledge in southern Walton and Morgan counties, is about an hour’s drive from Atlanta and can pull from the metro area’s talent pool to fill its 7,500 planned jobs. Work on Rivian’s plant is slated to start this spring at a 2,000-acre site in Morgan and Walton counties.

Credit: ArLuther Lee

Credit: ArLuther Lee

Rivian will instead pay more than $300 million over 25 years to local governments and school systems under a payment in lieu of taxes agreement or PILOT.

Christy argued in a letter to the Board of Assessors that they should reject the PILOT deal, because the Rivian lease is a type that should be subject to full taxation.

His argument centers around the difference between two arcane terms in real estate: Whether the lease is a “usufruct,” a common type of lease in which the tenant isn’t subject to property taxes, or an “estate for years,” in which the tenant has more complete control of the property and is subject to taxes.

Christy argues Rivian will have “full control of the property,” which would not qualify as a usufruct.

Christy also says Morgan County will only get 15% of the revenue from the project, even though nearly half of the project is in the county, and the county will have to pay for supporting the plant with roads and sewers, school funding and public safety expenses.

“When all the sheen comes off the new plant, the taxpayers are going to be left holding the bag,” he said.

The Georgia Court of Appeals recently cited in a ruling that the type of lease “depends upon the intention of the parties, and this is true without regard to the length of the term.”

The Rivian lease states: “It is the intention of the parties that the interest of the Company hereunder shall be a usufruct.”

An attorney for the JDA acknowledged in a letter that while the parties’ intentions are important, “they are not dispositive.” The JDA attorney added that other restrictions in the lease also make it a usufruct, including requirements that Rivian use the property only for the auto plant project, maintain insurance for itself and the JDA, and allow the JDA to inspect the property.

No public comment

In a letter to Morgan Board of Assessors Chair Mary Ellen Anton, Christy said the board also erred by not permitting public comment in accordance with the board’s procedures. Christy was denied a request to speak at the board’s May 25 meeting when it approved the Rivian agreement.

Greg Lisby, a professor emeritus at Georgia State University and an expert on open government, noted that while there may be a dispute over the board’s policy, under the state Open Meetings Act “public comment is not required.” The law instead requires meetings be open, he said, “so the public knows what’s going on.”

Combined ShapeCaption
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

Combined ShapeCaption
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

Henry, the county attorney, told Christy that “as a member of the public, you are welcome to attend, but you have no right to be heard.”

Christy disagrees. He said local officials have “miscalculated” public anger.

“These people are committed to challenging this,” he said.


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.