- Lawmakers demand answers from a failed, $175 million deal with EV battery maker Gotion
- Steps are underway to recoup $23.5 million in taxpayer funding, but it’s unclear what the money was spent on.
- Questions about how the deal unwinds also include whether the state can foreclose and regain the 270 acres it bought.
LANSING — Michigan owes the public answers while it seeks repayment from Gotion Inc. of a $23.5 million subsidy for a failed deal to bring a battery plant to the Big Rapids area, legislators said Wednesday.
“There are a lot of unanswered questions here,” Rep. Tom Kunse, R-Clare, told the House subcommittee on Corporate Subsidies and State Investments.
Among them:
- How the state plans to manage the termination of its 2022 agreement to give the electric vehicle battery maker up to $175 million in cash in exchange for a promised 2,350 jobs.
- How the $23.7 million for land near the proposed plant in Green Charter Township was spent.
Critics for years have criticized the project for its size, impact on nearby communities and possible impact on national security. Gotion’s parent company, Gotion High-Tech, is based in China and has ties to its communist party.
Vice President JD Vance campaigned against the project during the 2024 campaign, rallying in nearby Big Rapids.
Related:
- Michigan: Gotion battery plant plan is dead after years of controversy
- Jobs v. China: How politics, communist ties roiled $2.3B Gotion plan in Michigan
- Big Rapids Twp. eyes life after Gotion; could cash in on state-bought land
After years of litigation and little progress, Michigan Economic Development Corp. on Oct. 17 terminated the Gotion subsidy award, saying that the lack of work toward building the factory was an “abandonment” of the project.
Bridge Michigan documents obtained through the Freedom of Information Act show that $50 million was disbursed to The Right Place economic development organization.
That group, in turn, gave $23.67 million to Gotion, as allowed by the state’s Strategic Outreach and Attraction Reserve (SOAR) fund incentive, according to the MEDC.
Also spent from the $50 million award was $96,000 for the Mecosta County Road Commission to work on road engineering; and $333,900 for grant administration by The Right Place. The unspent balance of the $50 million as of Sept. 30 was $27.4 million, while the funds earned $3.3 million in interest.
Gotion has said it didn’t abandon the project, but it couldn’t move it forward
amid litigation with Green Charter Township over its plans to build on 270 acres.
Kunse, whose district includes the township, appeared before the committee to implore lawmakers to investigate the transfer and whether the state could foreclose on the property. He said he worries that a California bank appears to hold a lien on at least part of the property.
The MEDC told Bridge it continues to work with Gotion and that it hopes to recoup funds amicably and avoid a foreclosure.
“Gotion cannot sell or transfer the land without the approval of the Michigan Strategic Fund based on their agreement with the state,” spokesperson Danielle Emerson said.
Ultimately, Emerson said, the strategic fund “could take title of the property if it is unable to recoup the funds used to reimburse for the purchase of the land.”
The property, Kunse said, “is only worth $6 million.”
Rep. Joseph Fox, R-Fremont, also spoke at the 90-minute hearing, following criticism of the state’s economic development deals by John Mozena, president of the Center for Economic Accountability.
He said the silence behind megadeals such as Gotion “almost invariably creates tension between what’s best for the people managing the project on behalf of the public and what’s best for the public.”
Fox said the Big Rapids area protesters against Gotion plan a celebration this weekend over the end of the project.
Many felt disregarded when they raised concerns about the project, he said, echoing earlier testimony about communities feeling like big projects are foisted upon them.
Meanwhile, Kunse said he also wants Green Charter Township to receive compensation for its legal fees after Gotion sued the township for blocking an extension of water lines that a previous board — ousted in the 2023 election — approved in a development agreement.
The resulting legal battle stalled the project and put the company’s plans in a spotlight as the community and opponents across the state questioned Michigan’s spending on the factory.
Kunse had sought $275,000 for the township in earmark funding, but the request did not make it into the final budget.
The township, Kunse said, “is the pointy end of the spear. They were leading the fight.”
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