BIG RAPIDS — The Gotion battery project near Big Rapids is stalled — and potentially canceled — after the company was served with a default notice from the state.
Gotion will lose $175 million in tax incentives that had been approved for the project, and will be forced to return $50 million they’ve already received.
“At this point, we just need to say, okay, what is the exit strategy? It’s not going to go here. It’s not going to fit in the state of Michigan,” said Rep. Tom Kunse, who represents the area in the state House. “This just isn’t a good fit. So yes, this project is dead.”
The initiative was billed as the largest economic development effort in Northern Michigan’s history has potentially been canceled after the state pulled back 175 million dollars worth of support.
“Bribing companies to come here doesn’t work. We’re better off to garden our own companies, instead of going trophy hunting for this big ribbon cutting thing,” said Kunse, (R) District 100, Clare. “Let’s bring a company in that’s had some success here. Let’s help our local people.”
The Michigan Economic Development Corporation said in a letter to Gotion that the company had abandoned the Green Charter Township property, and that no work has occurred at the site in at least the last four months.
The state is looking to claw back nearly $24 million that had gone towards the purchase of land and $26 million that hasn’t yet been spent.
The $2.3 billion project was announced three years ago, when Gov. Whitmer said the facility would create more than 2,300 jobs in the Big Rapids area.
Kunse says Michigan’s economic incentive programs are broken and in need of reform.
“So that means we have to take something — we have to take tax money from people who have earned it, and we have to give it to people who have not earned it, to bribe them to come here,” he said.
The project also became a political flashpoint due to ties between Gotion’s parent company and the Chinese Communist Party.
Kunse says that the MEDC — the state’s incentive manager — should consider other uses for the funding.
“There are other companies that are looking to come in, Department of Defense-approved companies,” he said. “Now we go back to the MEDC and start over, so we’ll see.”
Kunse also says he was concerned the facility, which would produce components for electric vehicle batteries, could have struggled economically without the incentives.
“When the government gets involved, we distort the free market, and it doesn’t work,” he said. “Sooner or later, when the subsidies end, when the money goes away, the free market takes over.”
It’s unclear exactly what will happen next with the project and the land, which Gotion currently owns. The MEDC says Gotion needs approval from the state before any sale or transfer of the land.
Gotion says they still plan to pursue the project — but Kunse and other lawmakers say the project will not happen.
“Do I think the project is dead? Yes, I’ve thought this for a year — but they don’t have any friends left,” Kunse said.
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