Rivian: Back for property tax abatement

By:  Diane Benjamin

In 2018 Rivian didn’t qualify for property tax abatement.  At Monday’s Council meeting they will get a rebate for the taxes due to the Town of Normal based on 2019:

rivian property taxes

All of the other taxing bodies that were part of the 2016 agreement will also have to rebate taxes.

These are the qualifications:

rivian qualifications

What you might not know:

  • The employees required to be hired don’t have to be Rivian employees.  Contractors hired also qualify.  It doesn’t matter they will only have temporary jobs.
  • The Economic Development Council (EDC) verifies compliance, your elected officials are taking their word for it.
  • Normal waived all fees for permits, I wonder if they are doing inspections?

This is the 2016 agreement:  https://normal.org/ArchiveCenter/ViewFile/Item/2258

Employees are described as:

full time employee

Contractors are paid by the “company”.  Since taxpayer money is being given away, you deserve to how many permanent jobs have been created.  That information is easy to obtain because returns and taxes have to be filed as of 12/31/2019.  You will never see them however.

Why am I questioning the number of “employees”?  Because of this email, it confirms contractors are considered “employees” by the EDC:

rivian email

A new article about Rivian appeared:  https://www.reuters.com/us-ford-motor-rivian

Ford’s Executive Chairman’s daughter is now on the Rivian Board of Directors.  The agreement for $500,000,000 from Ford still stands, it was Lincoln that was put on hold.

14 thoughts on “Rivian: Back for property tax abatement

  1. What a sweetheart deal! Building contractors are considered employees? Yet they do not have any benefits from Rivian and no long term commitments. How many other businesses get those privilege’s?

  2. We might as well make them Town of Normal employees? We did that for CIRBN… That way Rivian employees can get a city pension and all the other benefits.

    Seriously, you count contractors working in the plant as Rivian employees?

    Normal can continue to baby Clark Kent and his company if they want, but it will not make even one massed produced vehicle emerge from the back of that plant.

    Fuhrer Koos picked a loser and they will continue to double down on what we all see as a terrible mistake.

  3. That’s not any definition of a “full-time employee” that I’ve ever known. Of course, this was written deliberately. Rivian is unlikely to directly employ large numbers of engineers, techs, assembly line workers, and others in BN, at least not anytime soon. Speaking of soon, can you believe Rivian came to town back in 2016. Yikes! Wonder if their agreement has a clause (real or imagined) that will allow them to obtain future benefits and rebates that were not otherwise earned, due to COVID-19. At the very least, it’s already been used as an excuse to postpone production into 2021. Where’s the pot of gold at the end of this rainbow?!

  4. Creative Accounting at its finest!
    KInd of like buying a bicycle and THEN getting a PO #.
    What next??

  5. In other Rivian related articles that pop up on my phone from time to time, it appears the company has a different definition as it relates to local employees. I have read in several articles where the company claims they have over 300 employees working in Normal. However, people working off-site in Michigan and elsewhere but presumably working on Normal related projects are included in this number (researchers, engineers, product development, etc.). One would think plant employees would actually have to work at this plant and not elsewhere.

  6. Rivian is in the big leagues now. If they take property tax break by fraudulently claiming short term construction workers are their full time employees, the news will eventually find its way to Elon Musk (Tesla), GM, Chrysler or any competitor. Their competitors will have a hayday with that negative PR. Ads saying they swindled money from elementary schools children will be hard to recover from.

    Not sure if they met the requirement or not. If they did great. If they are pushing the line, they are risking their reputation for a few dollars.

  7. How about the knuckleheads writing these deals don’t give any incentive money until the business actually produces something and they have permanent positions hired.

    This concept of giving away the taxpayers farm upfront and praying something materializes is asinine. This is like paying someone upfront their full annual salary then wondering why they stopped coming into work.

  8. 1.) If our local government bodies were smart, the definition of what a full-time employee is would be most important. Here’s why: there are contract workers for some companies who have been around 10-15 years (or more). These contractors own houses here, pay property taxes, utilize local businesses. Some of these are 6-figure jobs. Yes, “temporary” but in all reality, I think people would be happy with those jobs being created. (No guarantee that is what a contractor at Rivian would be) On the flip side, you could have a full-time Rivian employee who makes $40k, rents an apartment, and that job goes away the day after the abatement period. Which would we rather have?

    As long as they aren’t getting golden government pensions, I don’t care what name is on their paycheck if it is pumping money into the local economy for a long time.

    2.) I was very skeptical of Rivian, but there is sizable investment in the company by major investors and a good chunk is being spent on local employees, upgrading a local facility, etc. I’d much rather have them and a good chance at 1,000+ decent/good-paying jobs than nothing out at the plant.

    Yes, Rivian could pull out. However, they’d be leaving behind a huge amount of money in the facility that could then be sold to someone else if they do not work out. Sunk costs but they would then have to spend boatloads to build a new facility or rehab another one elsewhere. Even if they are making batteries and skateboard technology for other vehicles and don’t make their own, those are still great manufacturing jobs we didn’t have after Mitsubishi left.

    It would be great if Rivian did some local deals – ex. donate some cars amongst Bloomington, Normal, the county, ISU, IWU, and Heartland. Get the locals seeing these vehicles. With them being local, we are likely to see more of them here per capita than most other places like Mitsubishi had.

    1. TJ : I understand where you are going with your post but here are the realities. First, the abatement deal was for creating full-time Rivian jobs, not contractor or sub- contractor jobs that are likely temporary if even for a few years. Counting these jobs fly in the face of the presumed integrity of the abatement agreement. As far as the investments, I will repeat it until I don’t have to anymore. First, they are miniscule in automotive manufacturing terms. Strictly done for a piece of the battery technology and nothing more. As far as abandoning a large building, happens all the time. Rivian loses little to nothing if they leave. They will write it off or their creditors or investors write it off. See South Bend, Ind. for a abandoned auto manufacturing facilities. They are not going to donate $70,000 vehicles and up for good will unless it is one or two. Hell, they won’t even let potential consumers even get close to the prototypes for someone to examine quality. I do agree they should concentrate on battery manufacturing only and concentrate on perfecting that first before attempting to build high price niche vehicles.

  9. Good points, MPWABIDY. I do see where TJ is coming from on point #1. However, with point #2, the amount of money raised, on its own, has not historically been a good predictor of success. It’s a common belief that more money/investors mean more validation which means more of a likelihood of success. There’s no valid causal relationship between capital raised and success.

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