By Beth LeBlanc, Tribune News Service
Attorney General Dana Nessel’s office on Friday sent a formal demand letter to Gotion, Inc. in an attempt to recoup about $23.7 million in taxpayer cash used to prepare land in the Big Rapids area for a battery parts manufacturing plant project that’s been halted.
The demand comes more than four months after the state of Michigan, on Sept. 17, sent Gotion a letter holding the company in default of a $175 million taxpayer incentive agreement.
Assistant Attorney General James A. Zeihmer said in the Friday letter to Gotion that the matter had been referred to Nessel’s office and that the company now has 30 calendar days to pay back the $23.7 million.
The Michigan Economic Development Corporation has been working since Sept. 17 “to fully brief the Attorney General’s office and coordinate to return the balance of the SSRP grant to put the state in the strongest position for repayment,” said Danielle Emerson, an MEDC spokeswoman.
Chuck Thelen, Gotion’s vice president for North American manufacturing, did not immediately respond to a call and email seeking comment. Zeihmer’s Friday letter was addressed to Thelen.
In a federal court filing last week, Gotion argued its current situation in Green Township — where locals are largely opposed to the project and have rescinded project agreements that pave the way for construction — makes the project “no longer viable.” The company said in its Jan. 20 filing that it plans to amend its complaint against the township to seek monetary damages.
“The fact still remains that the township breached a valid and binding contract, caused Gotion harm, and is liable for damages to Gotion for its breach, including a claim for significant monetary damages that Gotion now intends to seek,” Gotion’s Jan. 20 court filing said.
Michigan lawmakers approved $175 million in taxpayer incentives for the Gotion project in Green Township in August 2023. About $125 million of that total was reserved for Gotion directly through Critical Industry Program dollars disbursed through the Strategic Outreach and Attraction Reserve Fund. Another $50 million was directed to The Right Place, an economic development group in west Michigan, to purchase and prepare the land for Gotion’s eventual construction.
But the Gotion project was hit with consistent and significant pushback by local residents and, later, officials at the local, state and national level. Opponents raised concerns about the effect of the manufacturing plan on the environment, the initial secrecy surrounding the state’s agreement with Gotion and the manufacturer’s ties to its Chinese parent company.
In November 2023, all of the members of the Green Township board were either recalled or resigned in the wake of community outrage against the project. They were replaced by a slate of candidates who are largely opposed to the project.
In March 2024, Gotion sued the township in federal court after the newly elected board rescinded its approval of a water line meant to serve the plant. Gotion argued the board’s decision was in breach of a development agreement requiring the township to assist the company in “obtaining the necessary governmental authorizations” for the project. That suit is ongoing.
In the state’s Sept. 17 letter to Gotion, nearly two years after entering a grant agreement with the company, the Michigan Strategic Fund said the company’s “cessation of eligible activities” for a period of 120 days constitutes an “abandonment” in violation of the grant agreement.
Additionally, the letter said, the company’s involvement in at least two pending lawsuits violates a provision of the agreement that prohibits involvement in a suit that “would reasonably be expected to have a material adverse effect on the project or the grantee’s performance of its obligations under this agreement.”
Of the funding appropriated by the Legislature, only about $23.7 million in Strategic Site Readiness Program funds was disbursed before Gotion was found in default.
