As it approaches a deadline on a state-backed incentive package, electric automaker Rivian faces fresh legal headaches in its plans for a $5 billion production plant in rural Georgia.
A deal negotiated between Rivian, the Georgia Economic Development Commission, and the Joint Development Authority for Jasper, Morgan, Newton, and Walton Counties, with the blessing of state authorities, saw a $15 billion development package for the 16 million square-foot vehicle plant ironed out, backed by $15 billion of special project tax revenue bonds.
The bonds were to be issued by the state via the JDA around early March in a “bond-financed sale-leaseback structure” that would see the carmaker rent the factory and surrounding ground after purchasing bonds, acting as a tenant and free from local property taxes, and instead on the hook for payments-in-lieu-of-taxes to the counties.
The sale of those bonds never went ahead as the deal faced several legal challenges targeting its financing structure, zoning requirements, and other provisions ahead of a Monday deadline allowing Rivian to walk away from the state development agreement with no strings attached.
Bloomberg News
A fresh federal lawsuit filed with the U.S. District Court for the Middle District of Georgia is just the latest hurdle gumming up the project’s execution.
The lawsuit, filed by Jasper County resident Julie Jenkins, whose property is adjacent to the site of a planned production facility for the EV maker, targets Rivian and private contractors alleging that earthmoving operations started late last year by contractors in preparation for full-scale development of Rivian’s factory had polluted rivers and other nearby waterways in violation of federal law.
The company has continued to voice support for the arrangement, but hasn’t commented specifically on the new lawsuit or the looming deadline.
Federal authorities cleared the project for a wetland work permit late last year.
The latest suit follows a string of other legal challenges from residents and community groups seeking to halt the facilities development and comes on the heels of several decisions on those cases.
In another lawsuit filed against the state and JDA that questioned the legality of the project’s stated granted of zoning permits, Fulton County Superior Court Judge Thomas Cox Jr. granted a JDA request that the $365,000 legal fees they’ve paid associated with the case be covered by No2Rivian, the community group opposed to Rivian’s plant that brought the suit.
The JDA had called the lawsuit “frivolous” and Cox questioned the intent of the lawsuit in his ruling.
JoEllen Artz, president of No2Rivian, said the group’s attorneys requested and were granted permission to appeal the decision this week and are moving to file a motion in state court.
It could take 9 to 10 months to appeal, she said.
No2Rivian also successfully challenged the validation of the PILOT bonds associated with the project in October, with Ocmulgee Superior Courts Chief Judge Brenda Holbert Trammell denying approval, saying in her decision that the JDA failed to “perform any independent analysis concerning the economic viability of the bonds, the project, or Rivian itself.”
The JDA and state appealed that decision, arguing that “the trial court essentially substituted its own economic skepticism for the analysis of the multiple local governing bodies that entered into a specific agreement allocating the PILOT payments to the participating counties and municipalities.”
“For the court to reject the economic judgment of those local governments essentially presumed they were committing economic suicide to attract the Rivian project,” court documents filed by state attorneys said. “It makes no sense that the state and these local governments would compete with numerous other states and localities to win this project if it were not economically sound, feasible, and reasonable.”
Rivian lost $6.8 billion last year and has struggled to gain footing in an increasingly crowded EV market, a frequent point of criticism from opponents to the development project.