The judge who initially denied the validation of bonds to provide tax incentives for the Rivian electric vehicle plant has now signed an order to uphold the bonds.
Ocmulgee Judicial Circuit Chief Superior Court Judge Brenda Trammell initially ruled against the bonds on Sept. 29, 2022, citing concerns over the company’s financial viability.
“Rivian’s cash reserves are quickly drying up, thus casting serious doubt on whether it will be able to commence, let alone complete, the project,” Trammell wrote in her opinion.
Property tax abatements are a common practice in Georgia and their approval routine is a way to circumvent part of the state constitution that taxpayer funds may not be used as “gratuities” to companies or individuals.
As part of the deal with the Joint Development Authority of Jasper, Morgan, Newton, and Walton Counties (JDA), Rivian would still pay $300 million in local property taxes over the next 25 years. The estimate of taxes to be abated totals $700 million to secure the $5 billion manufacturing plant.
The JDA appealed Trammel’s decision, and in a decision released on April 28, the Georgia Court of Appeals said the trial court was in error to deny the validation of the bond by considering the project’s economic feasibility.
“Specifically, the JDA argues that the economic wisdom of the project based on Rivian’s financial status was beyond the scope of what the superior court could consider in deciding whether to validate the bonds,” the decision states. “We agree that the superior court erred in denying validation of the bonds and the project based on a finding that the JDA and the state did not make a prima facie case that the bonds were sound, feasible, and reasonable.”
The Georgia Supreme Court declined to take up the case on July 13, meaning the Appeals Court’s ruling would stand, paving the way for bond validation.
The JDA and the Georgia Department of Economic Development issued a joint statement last week.
“An order validating the bonds is a victory for the State of Georgia and people of Jasper, Morgan, Newton, and Walton counties,” the statement reads. “We are grateful for Judge Trammell’s quick entry of an order validating the bonds for this great project. We also thank the Georgia Court of Appeals for its prompt review and decision concluding what we have known from the outset thanks to the research and vetting process: the Rivian project is sound, reasonable, and feasible and will provide enormous benefit to the community for decades to come.”
The statement reports that 90% of grading is complete at the Rivian site, meaning it is on track for construction to begin “in coming months.”
The Rivian plant is estimated to create 7,500 new direct jobs with production expected to begin in 2026, according to the JDA statement.