Joon Georgia Inc., a new unit of established auto body parts manufacturer Ajin USA, will receive a 10-year partial break from Bulloch County property taxes on the $317 million factory it plans to build in the Bruce Yawn Commerce Park, in exchange for the anticipated, eventual 630 jobs.
The “tax savings mechanism” described by Development Authority of Bulloch County CEO Benjy Thompson and approved by the DABC board Nov. 22 as part of a memo of understanding with Joon Georgia is reportedly very similar to that provided in February to Aspen Aerogels.
Like Aspen, which is also building a $325 million, 250-job factory in the commerce park, Joon Georgia will be exempt from the county government portion of the property tax millage for 10 years but will make payments in lieu of taxes equivalent to the Board of Education and fire protection millage.
No date has been set for Joon Georgia to break ground at the roughly 83-acre site it will occupy in the Commerce Park at the I-16 interchange on U.S. Highway 301.
“They’re still talking to our local people about construction timelines, about when they can start moving dirt on the site and those kinds of things … but those conversations are ongoing as we speak,” Thompson said Friday.
As a critical supplier for Hyundai Motor Group’s electric vehicle Meta Plant at the Savannah Harbor-I-16 Joint Development Authority site in Bryan County, the Joon Georgia factory needs to be completed first, he said.
“They are on a schedule that Hyundai requires them to be on, really, because the suppliers, especially of large and critical components like what Ajin does for the Hyundai plant, they’ve got to be up and going before the plant itself is up and going,” Thompson said. “So they are in a hurry to get started.”
Hyundai’s target is to have its main plant in production by Jan. 1, 2025.
However, neither all of the Joon Georgia parts factory’s 630 expected jobs nor the full $317 million investment will be realized on the day the plant starts production.
“It will take them a little bit of time to get to the full number of employees that they’ve committed to, and the same way with the investment number,” Thompson said.
In a deal typical of those made by Georgia development authorities as incentives to industry, the DABC, which is tax-exempt, will retain legal ownership of the Joon Georgia site for 10 years. Without an arrangement for special payments compensating for the school and fire district taxes, the factory would be completely exempt from property taxes.
Not a land gift
Unlike Aspen, Joon Georgia is not being given the land completely free of charge but will receive it at a “reduced price,” Thompson said. With industrial sites now in high demand in the region, the DABC is in a more competitive position, he said.
The Statesboro Herald informally requested Friday, but had yet to receive as of press time, a copy of the memorandum of understanding.
Joon Georgia will receive the use of the property for the first 10 years on a “bond lease,” Thompson said.
The Development Authority of Bulloch County board had approved a letter of intent Nov. 7 – the day the Joon Georgia plant was announced by Gov. Brian Kemp – to negotiate terms with the company.
Initially the letter gave the authority and company until Nov. 15 to reach an agreement, but it wasn’t ready for DABC board approval until a week later. In addition to the DABC’s local attorney, Steve Rushing, the authority had a bond attorney, Dan McRae, from the Atlanta offices of the national law firm Seyfarth Shaw, involved in the negotiation.
The structure of a bond transaction was required for the tax savings arrangement, Thompson said.
If the company did issue bonds to raise money, the development authority would serve as “a flow-through for the bond documents,” but neither the authority nor county would incur any obligation to repay, he said.
The memorandum of understanding is listed on the Bulloch County Board of Commissioners’ 5:30 p.m. Tuesday agenda for a vote of endorsement.
City supplies Aspen
Meanwhile, Statesboro City Council is slated to take further action during its 9 a.m. Tuesday meeting on supplying city utility services within the commerce park.
The council will be asked to award a $1.63 million contract to Y-Delta Inc. for extension of water and sewer mains to serve the Aspen Aerogels factory.
“The extension will also make water and sewer available to the last remaining large lot in the park, which has since been announced as the Ajin USA site,” city Public Utilities Director Steve Hotchkiss stated in a memo for the council.
Y-Delta’s bid was the lowest of three qualified bids received Nov. 16. Although the cost is more than the city’s original $1.56 million estimate, Aspen Aerogels had agreed to pay all cost about $1.25 million, Hotchkiss wrote.
Of that amount, $750,000 comes from an Employment Incentive Program grant awarded through the Georgia Department of Community affairs to the city and county. The other $500,000 will come from the city’s water and sewer operating revenue.
At the Nov. 15 meeting, the council approved a base contract of $366,413, to a maximum for $420,000 for additional work, for C&H Pipeline Inc. to install 3,800 feet of natural gas main to serve Aspen Aerogels. This is funded from natural gas operating revenue.