Tax Credit Authority OKs $20M in Incentives for Lordstown Motors
YOUNGSTOWN, Ohio – The Ohio Tax Credit Authority approved an estimated $20 million in job creation tax credits over 15 years for Lordstown Motors Corp. this morning so the company could begin manufacturing operations at General Motors’ former Lordstown complex.
Walt Good, senior project manager at Team NEO, the regional office for JobsOhio, told the tax credit board Monday that Lordstown Motors plans to create 1,570 jobs with an estimated $91.2 million in new annual payroll.
According to a scope of work description provided by the Ohio Development Services Agency, Lordstown Motors has pledged to meet these goals by Dec. 31, 2025.
Under the terms of the agreement, the tax authority requires that Lordstown Motors maintain operations at the site for at least 18 years.
The tax credit is worth 1.63% over the 15-year period, or a projected $20 million should all of the commitments be met, according to Todd Walker, spokesman for Ohio Development Services. Tax credits are performance-based, and the amount awarded is based on those jobs created.
Lordstown Motors has said it would invest a total of $423.8 million to retool the facility and manufacture electric pickup trucks at the factory, Good said. The company expects to begin production of the all-electric Endurance pickup truck in September.
Good also said that Lordstown Motors was considering sites in Michigan for a portion of the project’s assembly operations.
The tax credit authority approved 16 projects Monday that are set to create 4,183 jobs and leverage another $864 million of new investments across Ohio, officials said.
Lordstown Motors acquired the former GM factory in November 2019. Last August, the company announced it would merge with DiamondPeak Holdings Corp. a special purpose acquisition company, or SPAC, and would begin trading publicly by the end of the year.
General Motors has invested about $75 million in the venture – $50 million of which is “in-kind” investments made through a mortgage line of credit it issued to Lordstown Motors in November. Another $25 million investment was tendered through cash.
General Motors closed the Lordstown plant in March 2019. In September, the state of Ohio ordered that GM repay $28 million in tax credits it received because the automaker violated its agreement when it shut the plant down. It was also directed to pay $12 million in community support to the Mahoning Valley.
Lordstown Motors began trading Oct. 26 on the Nasdaq exchange in October under the ticker symbol RIDE.
Shares of Lordstown Motors were trading lower at $20.80 late Monday morning compared to Friday’s close at $23.47.
Copyright 2021 The Business Journal, Youngstown, Ohio.