Business

How Did the Deal Unfold to Attract Nikola Motor Company to Buckeye?

(Source: AZBigMedia): Jesse Millard – The future of trucking will be taking shape in Buckeye. The far West Valley city will be home to a hydrogen-electric semi-truck manufacturing headquarters facility, which will represent a little more than $1 billion in capital investments and thousands of jobs by 2024. 

Nikola Motor Company will build a one-million-square-foot facility to house its semi-truck manufacturing efforts, research and development and headquarters in Buckeye, adding 2,000 jobs to the region. 

“We have already begun planning the construction for our new zero emission manufacturing facility in Buckeye, which we expect to have underway by the end of 2019,” says Trevor Milton, CEO and founder of the Nikola Motor Company.  

The facility will be built on a 500-acre plot that Nikola Motor Company received for free from El Dorado Holdings and JDM Partners, which Arizona businessman and sports icon Jerry Colangelo is a principal of.  

The land is located near Douglas Ranch at Sun Valley Parkway and the future site of Wintersburg Parkway. The facility is at one of the entrances for the Douglas Ranch/Trillium master-planned community being developed by El Dorado Holdings and JDM Partners. That community is projected to house more than 300,000 residents.  

The free land isn’t the only thing that convinced the Nikola Motor Company to build its factory in Arizona. The semi-truck manufacturer will be financially assisted by Buckeye with a reimbursement of the building permit fees, and with a reimbursement of 49 percent of the sales tax generated by the project, says David Roderique, Buckeye’s economic development director. 

Between those two reimbursements, the city would give back between $3-6 million after the factory spends that money in the city, Roderique notes.  

The State of Arizona has offered an incentive package that will give up to $46.5 million based on the Nikola Motor Company project assumptions, according to information provided by the Arizona Commerce Authority. 

Qualified Facility Tax Credits make up $41.24 million of the incentives, which are based around the amount of capital investment made into the facility and the number of full-time jobs created. 

Nikola Motor Company was also offered a $3.5 million grant through the Arizona Competes Fund, which is used to promote the growth and diversification of business in Arizona. Then, a $1.815 million Job Training Grant was offered to the manufacturing company.  

The Nikola Motor Company CEO also touted Arizona’s supply of workers as another reason for picking the Grand Canyon State.  

Creating this type of employment within Buckeye’s borders was very important to the city, Roderique says. Many of Buckeye’s residents leave town for work, and this manufacturing facility will help them stay in Buckeye. This project could also help draw many supporting businesses to the area. Roderique says that vehicle manufacturing facilities around the country typically generate 5-10 times the number of jobs through suppliers and other ancillary needs.  

“This will set the tone for future businesses in the city – our focus is on attracting technologically advanced and sustainable businesses, and Nikola is right in line with that,” Roderique says.