Lansing City Council approves tax exemption for $2.5B GM battery cell plant

Kalea Hall
The Detroit News

Lansing City Council unanimously approved an industrial facilities tax exemption for a $2.5 billion battery cell manufacturing plant that General Motors Co. and partner LG Energy Solution are looking to build in nearby Delta Township. 

Council granted the exemption at a special meeting Monday, a week after endorsing another tax incentive for the project by passing a resolution recommending the formation of a renaissance zone for the development in an application to the Michigan Strategic Fund.

General Motors' Lansing Delta Township Assembly Plant in Delta Township, Mich., is photographed Tuesday, June 19, 2018. (Matthew Dae Smith/Lansing State Journal via AP)

A renaissance zone exempts persons and property from taxes levied by the city. In this case, the renaissance zone would be in place 18 consecutive years starting in December 2022, or whatever date is set by the Michigan Strategic Fund, the governing body of the Michigan Economic Development Corp. The industrial facilities tax exemption absolves for up to 12 years the facility from real or personal property taxes, according to the Michigan Department of Treasury. 

"This is the last piece, at least on our end, that we have to approve in order to try to secure this investment," Councilman Adam Hussain told the body before it approved the exemption. 

Lansing's approval of the exemption came the same day Gov. Gretchen Whitmer signed a $1.48 billion spending plan that will use tax dollars to lure economic development to Michigan, including the new GM and LG battery cell manufacturing plant. After losing out on a multi-billion investment from Ford Motor Co. to southern states, state and local government leaders in Michigan are now doing what they can to solidify major GM investments.

GM and battery partner LG Energy Solution, through their joint venture Ultium Cells LLC, have filed for local and state tax incentives for the battery cell plant investment that they say will bring 1,700 jobs to the area when fully operational. GM is already building two other battery cell operations with LG: one in northeast Ohio and the other in Spring Hill, Tennessee. 

The Detroit automaker also has filed a request for exemption with Orion Township to invest $160 million in a battery pack assembly line at GM's Orion Assembly plant, The Detroit News first reported. Battery packs hold the battery cells that power electric vehicles. 

But the automaker has since pulled that Orion application, The News learned Monday. GM is expected to resubmit a modified request that could be for a higher investment amount and more expansion at the plant. The News previously reported GM is looking to transition the Orion facility to make electric trucks based off its new Ultium electric platform.

The Chevrolet Bolts currently made there are not built on the Ultium platform. When transitioning its Detroit-Hamtramck plant to build Ultium trucks and SUVs, the automaker spent $2.2 billion. 

GM spokesman Dan Flores said in a statement the company needs "more time to assess the business case for the project under consideration for Orion Assembly, therefore, we’ve requested Orion Township postpone consideration of our recently submitted tax incentive application. We hope to resubmit the application once we’ve completed our review."