Skip to main content
You have permission to edit this article.
Edit
top story

Fort Worth OKs $440 million in incentives for Rivian

  • Updated
  • 0

Rivian Automotive, the electric-vehicle startup backed by Amazon.com, is in talks to invest at least $5 billion to build a factory near Fort Worth, Texas, according to a document obtained by Bloomberg News. Bloomberg's Ed Ludlow has more on "Bloomberg Markets." (Source: Bloomberg)

FORT WORTH — Fort Worth city officials have approved a $440 million package of tax incentives for electric vehicle manufacturer Rivian Automotive, saying the company's proposal to build a $5 billion factory would forever change the landscape of the once-rural western side of the city.

In return, Rivian would create 7,500 jobs by 2027, which would make it one of the largest employers in the Dallas-Fort Worth region. The California company is looking at several cities for its proposed manufacturing plant, although Fort Worth is considered a front-runner.

The manufacturer's current plant is in Normal. 

The new project would be built on 2,000 acres of undeveloped land.

Supporters of Rivian's proposal compare it to the arrival of General Motors' assembly plant in Arlington in 1954. That project ushered in a new era for Arlington — a much sleepier suburb at the time — and paved the way for other neighboring projects such as Six Flags Over Texas in 1961 and the Texas Rangers baseball club in 1972.

"With an anchor tenant like Rivian that is technology-focused, forward-thinking and really building for the future, you're going to attract like-minded businesses and offices that want to have corporate campuses near a hub of technology," Greg Miller, a spokesman for the Walsh Companies, said in a phone interview after the City Council vote.

The City Council on Tuesday unanimously approved the tax breaks for Rivian or its affiliate without discussion. The move includes creation of a tax abatement reinvestment zone, which clears the way for Tarrant County, Parker County or other government entities to offer incentives as well.

The Walsh development straddles the Tarrant-Parker county line.

The project also will be submitted as a potential Texas Enterprise Zone project, making it available for further state funding.

The city's tax breaks is the equivalent of 85% of maintenance and operations property taxes over 15 years.

The Fort Worth factory would be capable of producing 200,000 vehicles per year, city records show. Workers at the factory would be paid minimum average annual salaries of $56,000.

Rivian is supported by Amazon and Ford Motor Co. Amazon has a contract with Rivian to order 100,000 electric delivery vans, economic development director Robert Sturns told the City Council.

The Rivian project would be a huge economic generator for the region, said Ray Perryman, an economist and president of The Perryman Group in Waco.

Rivian is reportedly investing at least $5 billion to build a second electric vehicle factory near Fort Worth, Texas. The manufacturing plant, codenamed “Project Terra,” will have an annual capacity of 200,000 electric vehicles and is expected to create at least 7,500 jobs by 2027. 

Construction and development alone could lead to about $6.2 billion in gross product to the area, Perryman said in an email.

By 2027, the annual benefits could include almost $2 billion on gross product, about $1.2 billion in personal income, and more than 30,000 to total job, he said.

Perryman said the local government incentives would be recouped in fewer than seven years, and the annual return on investment would be about 19%. But, he cautioned that the project isn't without risk.

"Effects of that magnitude are certainly adequate to justify the package according to typical criteria," Perryman said. "Having said that, the risk associated with the project are relatively high given that Rivian is essentially a startup company in an emerging industry that is already characterized by stiff competition. That fact should be considered in both the magnitude and terms of any package."


0 Comments
0
0
0
1
0

The business news you need

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Related to this story

Get up-to-the-minute news sent straight to your device.

Topics

News Alerts

Breaking News