Phoenix suburb to take on $50M of temporary debt to support battery plant

Sep 9, 2023, 6:30 AM

A rendering shows the planned battery manufacturing facility that LG Energy Solution is going to bu...

A rendering shows the planned battery manufacturing facility that LG Energy Solution is going to build in Queen Creek. (Queen Creek)

(Queen Creek)

The Town of Queen Creek has moved forward with a temporary solution to fund substantial public infrastructure costs for the planned LG Energy Solution battery manufacturing plants in the southeast Valley.

As part of an agreement with the battery company, Queen Creek has promised to build out more than $80 million worth of public infrastructure for LGES’ new factory, including new streets and water and wastewater improvements adjacent to the facility.

Queen Creek is expecting a state reimbursement program to cover about 80%, or $67 million, of the $84 million in anticipated costs. Through the program, cities can be reimbursed costs through prime contracting tax revenue generated from construction of a qualified manufacturing plant.

The other 20% of public infrastructure costs is expected to be covered through local construction sales tax, the town said. The project is expected to break ground sometime in 2023. Because construction hasn’t started, the town isn’t yet collecting those taxes and cannot receive reimbursements from the state. As a result, it needed to come up with a temporary solution to pay for the millions of dollars it will cost for infrastructure.

This story is posted in partnership with Phoenix Business Journal. Click to read the full story.

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Phoenix suburb to take on $50M of temporary debt to support battery plant