ford

Price tag for Ford megasite deal hits $884M

Gov. Bill Lee speaks at Ford’s announcement it will build an electric vehicle and battery plant at the Memphis Regional Megasite on Sept. 28, 2021. (Erik Schelzig, Tennessee Journal)

When lawmakers return into special session next week to take up an incentive package for Ford’s Blue Oval City at the Memphis Regional Megasite, they might be surprised the price tag has now reached $884 million.

Gov. Bill Lee’s administration had already disclosed the $500 million grant it had agreed to provide to Ford and battery maker SK Innovation. But as first unearthed by Chattanooga Times Free Press reporter Andy Sher, the legislation appropriates state funds for three further items.

Here’s the breakdown:

— State grant to Ford Motor Co. or its affiliates: $500 million.

— Road work: $200 million.

— Building, demolition, and related work on site: $138.2 million.

— Construction of Tennessee College of Applied Technology at the site: $40 million.

— Consulting and legal services: $5 million.

— Establishment of a new Megasite Authority of West Tenenssee: $675,000.

Just like any other major investor, Ford and SK Innovation will also qualify for statutory job tax credits worth $4,500 for each new job created. The Haywood County location also qualifies for an enhanced credit of an additional $4,500 for five years. Or the company can choose the “super tax credit,” of between $4,500 and $5,000 per position (depending on wage level) for up to 20 years.

The enhancement and super tax credit can’t be used together, so the Blue Oval City project will have to decide whether to go for the large per-employee credit for a shorter amount of time, or the lesser amount for longer.

The full projected employment level of 5,800 workers times $4,500 is $26 million. At the enhanced level, the total credit would balloon to $52 million against the projects franchise and excise tax obligations.

New TNJ edition alert: Ford incentive deal gets scant attention amid furor over COVID-19 mandates

The 6 1/2-square-mile Memphis Regional Megasite.

The new print edition of The Tenenssee Journal is out. Here’s what we covered this week:

— Ford session near, but still no official call on COVID-19 mandates.
— Robinson faces Senate removal following conviction in fraud trial (with cameos from John Ford, Tommy Burnett, and Ed Gillock).
— Cue the waterworks: State releases plan for spending federal funds on water, sewer projects.
— Obituary: Jim Coley, social studies teacher who spent 14 years as lawmaker.

Also: Mick Jagger on a pedal tavern, big school districts and teachers’ union frozen out of BEP review, Randy Boyd apologizes for Mark Pody fundraiser, and Steve Cohen makes an endorsement in the Democratic gubernatorial primary.

As always, access your copy of the TNJ here or subscribe here.

Sexton threatens abstentions on Ford deal if there is no second session on COVID-19 mandates

Rep. Cameron Sexton (R-Crossville) speaks to colleagues at a House Republican Caucus on July 24, 2019. (Erik Schelzig, Tennessee Journal)

House Republicans may sit on their hands rather than vote for a $500 million incentive package for Ford’s massive investment in West Tennessee if there isn’t going to be another special session on COVID-19 mandates, Speaker Cameron Sexton (R-Crossville) said Friday.

“If there wasn’t a special session, you’d have members who vote against [the Ford deal] in the House,” Sexton told WWTN-FM. “Instead of getting the 90-plus votes that is like everyone’s in unison with the decision and wanting Ford, you’d be in the 70s. It would still pass, but is that really the message you want to send to the biggest investment in Tennessee history?”

Gov. Bill Lee has called a special session for the week of Oct. 18 to address issues related to the Ford deal. He extended his executive order allowing parents to opt their school children out of mask mandates on Thursday and said he wants to fight against federal rulings and orders about the issue in court rather than in the General Assembly.

That’s not good enough for some GOP lawmakers.

“You just have members who are like, If I’m in East Tennessee, and it’s great that we landed that in West Tennessee, but I’ve got families and parents over here and who need help and we’re not doing anything to help them. And why can’t we?” Sexton said.

“Members at that point may choose to vote for it anyway or they may choose to say I may not vote no, but I’m not going to vote yes,” he said.

One issue Sexton said lawmakers may want to take up is whether businesses should be subject to lawsuits from workers they require to get vaccinated against COVID-19.

“Currently they have absolute immunity if an employee has a reaction to that vaccine,” Sexton said. “So, I think it’s important for us to go in and take a look and say if you do a mandate on your employees then you shouldn’t have the immunity to where they don’t have any repercussions if that happens.”

The business community is likely to take a dim view of lifting liability protections enacted amid the pandemic.

Sexton and Senate Speaker Randy McNally (R-Oak Ridge) issued a joint statement on Friday:

The Ford megasite deal is transformational for Tennessee, and we look forward to working with Gov. Lee to finalize this project as part of his special session call for Ford Motor Company. At the same time, we have heard from many Tennesseans seeking relief from burdensome Covid-19 mandates being imposed upon them. We are working together per our state constitution to call an additional special session upon the completion of the megasite session to address issues surrounding Covid -19.”

Lee calls special session limited to Ford deal

Gov. Bill Lee speaks at Ford’s announcement it will build an electric vehicle and battery plant at the Memphis Regional Megasite on Sept. 28, 2021. (Erik Schelzig, Tennessee Journal)

Gov. Bill Lee has issued a call for lawmakers to return into a special session starting on Oct. 18 to take up a $500 million grant for Ford to build a new electric vehicle and battery production campus in West Tennessee and to establish a college of applied technology at the site.

While Republican lawmakers are clamoring for a platform to denounce what they see as federal overreach on mask mandates and COVID-19 vaccines, Lee is limiting the call of the special session to matters related to the Ford deal.

While it remains unclear what exactly lawmakers could do to fight federal court rulings or executive orders, there is still a growing sentiment that a special session should be held if lawmakers are coming back to Nashville anyway for the Ford deal. If so, they may have to take the route of calling themselves into their own separate special session by gathering the signatures of at least 66 House members and 22 senators — a step that has occurred only twice in Tennessee history.

Here’s the release from the governor’s office:

NASHVILLE, Tenn. – Today, Tennessee Governor Bill Lee called for the Tennessee General Assembly to convene on Monday, October 18, 2021 for a special session to address funding, buildout and oversight of Ford Motor Company’s historic $5.6 billion investment at the Memphis Regional Megasite.

“Our partnership with Ford and SK Innovation will transform West Tennessee, and it’s important we ensure this project has the structure, funding and accountability needed to be successful,” said Gov. Lee. “I am calling a special session to secure a lasting impact for Tennesseans, and I thank the legislature for their partnership in an efficient, productive assembly.”

During the special session, lawmakers will address funding to support and benefit the Memphis Regional Megasite, including site development, education and workforce preparation.

The full special session call may be viewed here.

Ford picks Memphis Regional Megasite for $5.6B electric vehicle and battery plant

Ford is announcing plans to build a $5.6 billion electric vehicle and battery manufacturing facility on the sprawling Memphis Regional Megasite. The Dearborn, Mich-based automaker said the project dubbed Blue Oval City will create nearly 6,000 jobs.

Gov. Bill Lee said he will call a special session in the coming weeks for lawmakers to approve a $500 million incentive package for the project slated to comprise nearly all of the 6.5-square-mile site in Haywood County. Lee noted that Tennessee will join Indiana as the only states where four auto companies produce vehicles. The Volunteer State’s existing manufacturers, General Motors, Nissan, and Volkswagen also have made heavy investments in electric vehicles.

Ford plant is projected to start assembling electric F-Series trucks in 2025 and the joint venture with South Korea’s SK Innovation is slated to begin making batteries there the same year. Company officials say it is Ford’s first all-new plant to be commissioned since 1969.

The Ford F-150 Lightning Electric Truck. (Image credit: Ford)

The ongoing development of the megasite has been a subject of a yearslong debate among lawmakers and politicians, some of whom have complained it was too big, remote, and expensive. According to an outside study previously commissioned by the Lee administration, 18 prospects had considered — but decided against — the megasite, including five original equipment manufacturers, five battery or stored energy companies, six tiremakers, one data center, and an appliance manufacturer.

Here’s the full release from Ford:

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