The Georgia Supreme Court has declined to hear an appeal challenging the validity of roughly $700 million in property tax breaks that Rivian is expected to receive for its future $5 billion electric vehicle factory.
The state’s highest court said Thursday it will let stand an appellate court’s ruling that primarily sided with the state and a local development authority and paved the way for a bulk of those property tax breaks to be reinstated for Rivian.
The decision is a boon for the electric vehicle upstart that’s behind one of the state’s largest-ever economic development projects, and it deals a blow to critics who say the tax savings don’t stand up to scrutiny and go against the wishes of nearby residents.
Applauding the decision were the Georgia Department of Economic Development and the Joint Development Authority of Jasper (JDA), Morgan, Newton and Walton Counties, which own the 2,000-acre Rivian project site in southern Morgan and Walton counties.
“The earlier decision from the Court of Appeals in support of the Rivian project is now final, reinforcing that the State and JDA provided unrefuted evidence that this project is sound, reasonable, and feasible,” the agencies said in a joint news release.
John Christy, an attorney representing seven Morgan County residents who were challenging the tax breaks, told The Atlanta Journal-Constitution he’s disappointed the Georgia Supreme Court did not take up the case. He added that he believes the case “raised important issues.”
In April, a panel of three appellate judges ruled in favor of the state and JDA on four of five aspects of the legal controversy over the the bulk of the $1.5 billion incentive package used to woo the California-based startup to Georgia.
The panel found a local superior court judge erred by declining to approve or “validate” bonds at the center of $700 million in local property tax breaks that Rivian was poised to receive. The panel also ruled the land lease Rivian signed is a limited arrangement known as a usufruct, not a taxable lease called an estate for years.
The lower court ruling threatened the proposed factory and presented Rivian the opportunity to terminate its agreement with the state and JDA in May if the local property tax breaks weren’t reinstated. Rivian CEO R.J. Scaringe told the AJC earlier this year that, “We’re committed to this state and this project.”
Two of the three judges on the panel sided with the local judge on one item, ruling that Rivian may owe certain taxes on specific equipment within the factory. A spokesperson for the state and JDA said that ruling will not be appealed, meaning the equipment taxes will not be abated. The value of those taxes depends on the assessed value of equipment that Rivian installs on-site, which has not been publicly released.
The appeals court did not validate the bonds, meaning they’ll have to go back to get a local judge’s approval before the tax savings will be finalized.
A formal groundbreaking ceremony for the Rivian factory has yet to take place, but the project site is currently being graded. It’s expected to begin production in 2026, a year later than initially scheduled.
Credit: HYOSUB SHIN / AJC
Credit: HYOSUB SHIN / AJC
The plant is expected to employ 7,500 workers, and Georgia Department of Economic Development Commissioner Pat Wilson said it will spur thousands of ancillary and supplier jobs.
“A project of this scale attracts suppliers and builds a thriving community that can support more local businesses,” Wilson said in the release. “The benefits will be felt across the e-mobility ecosystem and the dozens of other industries its supply chain touches.”
While this legal battle over incentives is over, several other challenges related to the Rivian project are still working their way through the courts.
Many of the same plaintiffs in the incentives case are involved in two separate lawsuits accusing the state of taking over the Rivian site to avoid public scrutiny during rezoning discussions. A local judge ruled the plaintiffs must pre-pay $365,000 to cover the state and JDA’s legal fees under what’s known as a petition for bond, a tactic designed to discourage frivolous lawsuits against local and state governments. The Georgia Court of Appeals has agreed to determine whether the petition for bond is warranted.
Rivian and two contractors enlisted to clear and grade the project site are also being sued in U.S. District Court by a nearby resident who claims muddy runoff from the site has choked streams and ponds downstream in violation of federal environmental law. That case is still pending.
Cox Enterprises, owner of The Atlanta Journal-Constitution, owns about a 4% stake in Rivian.
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