Casa Grande, AZ

Lucid Motors expands footprint in Casa Grande with lease of 1,366 acres

Jeff Kronenfeld

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A Lucid Motors vehicle.(Eugene Gologursky/Getty Images Entertainment)

Jeff Kronenfeld / NewsBreak Pinal County, AZ

(Casa Grande, AZ) On Tuesday, July 5, the Casa Grande City Council unanimously voted in favor of a development agreement between the city, Lucid Motors, and Pinal County.

Since four out of five Pinal County Board of Supervisors members also voted in favor of the deal on June 27, the electric vehicle company’s plan to expand in Casa Grande will move forward.

Lucid’s growing impact on Pinal County

Currently, Lucid is working to triple the square footage at its factory in Casa Grande, which produces the company's first vehicle, the Lucid Air, according to a presentation for the board by Daniel Witt, head of state and local public policy at Lucid Motors.

Witt also stated that the company currently employs over 2,000 workers at the Casa Grande facility, which he anticipates growing to more than 3,000 by year's end.

These employment numbers put the company well ahead of projections in a 2018 presentation by Applied Economics, an economic research and consulting firm based in Phoenix, Arizona. They forecasted the creation of 2,185 new jobs by 2025, including positions for assemblers, engineers, maintenance workers, auto body technicians, supervisors, and managers.

Not included in those figures were 2,100 direct construction jobs and 290 indirect jobs projected to be created by Lucid’s building projects.

Further, Applied Economics predicted purchases from local suppliers and employee spending would generate $2.07 billion in economic impact by 2029.

In addition, Lucid works closely with and helped develop curriculum for Drive48, a 13,000-square-foot facility offering training for high-tech manufacturing jobs, including automotive assembly.

Housed at Central Arizona College’s Signal Peak Campus in Coolidge, Drive48 was created by a partnership between the school, state, county, and Casa Grande.

Variant views on Lucid

In another vote at the June 27 board meeting, the supervisors authorized a $115 million bond to finance the purchase of 1,366 acres, which Lucid will lease for four years, with an option to buy.

This expansion would bring the property closer to the standard size for an automotive original equipment manufacturer campus, according to Pinal County Manager Leo Lew’s statement at the June 27th meeting. It would also allow the company to produce its complete product line, house a supplier park, and directly employ up to 6,000 workers.

“We did a similar arrangement with them when they first came to Pinal County and Casa Grande about four years ago,” said Stephen Miller, Pinal County supervisor for District 3. “It was very successful. It’s set up to have a balloon payment at the end, and they actually are going to exercise that balloon payment on the first deal.”

Miller’s colleague Kevin Cavanaugh, Pinal County supervisor for District 3, was the board’s lone vote against the agreement. However, he offered a different assessment.

“I didn't like this whole deal,” Cavanaugh said. “I like economic activity. I didn't think it was the right thing to do to increase our debt load nearly 25% for one company who is replete with cash. The county's got to borrow the money in a time when even our deputy county attorney recognized that problems could occur which could place this deal at risk.”

Nonetheless, Miller dismissed these concerns by pointing to the company's positive track record with the county and specific aspects of the agreement, which limits the government's potential exposure.

“In the past deal and in this current deal, there will be in escrow the amount of money that would make one year's payments to the bonds should Lucid default for some reason,” Miller explained. "We have in a separate escrow account the money that would cover all the infrastructure that they want to put in so that if there's any kind of hiccup, there would be money available."

Pinal County Board of Supervisors Chairman Jeffrey McClure also voted for the agreement, citing increasing tax revenue, employment, and diversification of the county’s economy as factors in his decision.

Like Miller, McClure disagreed with Cavanaugh’s criticism of the deal’s danger to the county financially.

“The collateral there is that, of course, we get the land back, and the infrastructure improvements they provide on that land are given to us if they default,” McClure said. “They are getting ready to pay off the previous deal that we made with them four years ago. They're paying it off early.”

Still, Cavanaugh expressed other objections to the deal on principle as both a fiscal conservative and skeptic of the government of Saudi Arabia, which owns a controlling stake in Lucid.

“There is actually some concern that Saudis utilize slave labor in their factories,” Cavanaugh said. “While it was officially outlawed in about ‘62, some of the reporting agencies who track slavery assert the practice continues. Now, does that apply to Lucid? I don't know who will be employed or if Lucid has spelled out those standards in their agreements with the Saudis.”

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Jeff is an award-winning freelance journalist covering news, business, science and the arts. His work has been published in Discover Magazine, Vice, the Phoenix New Times and other outlets.

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