In exchange for building a $2.5 billion-plus electric vehicle battery plant to Kokomo and creating up to 1,400 jobs, carmaker Stellantis NV and renewable battery company Samsung SDI stand to reap the largest economic development incentive package in state history.
The Indiana Economic Development Corp. laid out a substantial incentive deal to lure the joint venture, with tax credits and investments totaling at least $186 million. Some of the breaks and funds would go to the companies and some of it would pay for infrastructure for the project.
The deal, which the IEDC confirmed was the largest ever offered by the state, helped Indiana beat out several other states to land the plant, including Michigan.
“We’ve had some really nice conversations and we’ve had some tough conversations [with Stellantis and Samsung]. But it’s quality over quantity,” said Indiana Commerce Secretary Brad Chambers in Kokomo on Tuesday. “And I am so proud of our team and in the locals for being able to convince these two quality companies to locate here. It is just fantastic.”
The state incentives include up to $37.5 million in tax credits, as much as $20 million in redevelopment tax credits and up to $2 million in training grants. All the financial incentives are conditional, based on whether the company reaches its job-creation and investment goals.
The project will also qualify for $25 million for site readiness to offset capital and infrastructure costs, and up to $2 million from the Industrial Development Grant Fund for the infrastructure improvements Kokomo needs to make to support the project.
The project will also get $100 million in what the state called conditional structured performance payments. And the IEDC and other state financing authorities will offer repayable financing to further boost construction and infrastructure.
The city of Kokomo, the Greater Kokomo Economic Development Alliance Inc., Howard County, Duke Energy Indiana and the Northern Indiana Public Service Co. offered additional unspecified incentives above the state package.
The deal surpasses the incentive packages for a trio of other, previously record-breaking, projects.
Elanco Animal Health, which plans to spend $300 million to open a new headquarters campus in Indianapolis, was promised $163.1 million in state and city incentives in a deal announced in December 2020. The economic development package includes $99.1 million in state incentives and $64 million in tax increment financing from the city.
The Elanco project is expected to create 573 jobs and retain 1,623, and at last fill the long-vacant former General Motors stamping plant site near White River State Park.
In 2018, Indiana and Indianapolis offered Infosys a $101.5 million package after the India-based tech company committed to invest $245 million in an Indianapolis campus and create 3,000 local jobs. The package included $84 million in state incentives and $17.8 million in real estate grants and infrastructure improvements from the city.
And back in 2006, when Honda pledged to create 2,067 jobs with a $550 million plant in Greensburg, it was offered a package of $141.5 million in tax credits and abatements, training assistance, and road infrastructure upgrades, with most of the incentives coming from the state.
“Large-scale investments like this are a testament to Indiana’s business-friendly climate, our strong workforce, growing population and our continued investment in quality of life,” Chambers said. “It is a testament to the strength of our values and the vibrancy of [our] communities, communities like Kokomo.”
Stellantis’ predecessor companies have had a presence in Kokomo for nearly 90 years, since Chrysler in 1937 converted the former Haynes Automobile plant into a manual transmissions production facility. Government officials and company leaders cited that long history in the decision to locate yet another Stellantis facility in Kokomo, lavishing praise on the local workforce.
“The workers here in Kokomo, Indiana are absolutely fantastic,” Stellantis North America Chief Operating Officer Mark Stewart told reporters. “We have a lot of folks that are second-, third- and … possibly fourth—but for sure, three generations—of families who have been a part of our brands over the last 85 years.”
“It really is one of our staple locations,” he added. “And what better place to put our next-generation staple than right here with our folks that are dedicated to the company? They do great work. Spot-on quality, spot-on performance, spot-on efficiency, just great.”
Stewart also said that proximity to the company’s three other Kokomo facilities was a plus logistically. Other states were considered, he said, but he declined to name them.
The companies said one of the building blocks for that workforce was education, repeatedly thanking Ivy Tech, Tuesday’s event host.
“There was also a more important reason for choosing Kokomo, Indiana as our final site. It is because of Ivy Tech Community College, where we are currently at right now,” said Samsung SDI CEO Choi Yoon-Ho. “We would like to ask for your support so that your institution’s best and brightest students will have much interest in working for our joint venture one day.”
Indiana’s been criticized for its comparative poor test scores and its working population’s educational under-attainment, most notably by Eli Lilly and Co. CEO David Ricks.
Asked about the skills future plant employees would need, Indiana Gov. Eric Holcomb emphasized the state’s investments in science, technology, engineering and math, including through grants.
“This is why we’re … supporting Ivy Tech [so] that it can build a curriculum that Stellantis and Samsung SDI have said, ‘This is what we need,'” Holcomb said. “And so, that’s how we’ll work through this whole process, from the first employee to the 1,400th employee, to make sure every station inside that massive building is fully staffed up.”