by DAVID BAUERLEIN
Florida Times Union

Jacksonville’s pursuit of a high-tech battery plant promising hundreds of jobs took a leap forward Wednesday when the federal government announced a $95.5 million grant to Saft America for construction of the factory.

Saft America won the grant in fierce competition that saw 165 applications for $1.5 billion in grants for plants to build advanced batteries for plug-in vehicles and other heavy-duty uses. Saft’s plant in Jacksonville would build lithium-ion batteries for military vehicles and industrial uses.

Saft was one of just nine applications selected for funding.

Getting the grant was make-or-break for Saft to build the plant at Cecil Commerce Center on the Westside. Before any ground is broken, however, the Jacksonville City Council must approve a $7.2 million package of local and state incentives for Saft.

Saft would spend about $122 million in private investment for construction and equipment at the plant, according to the mayor’s office.

Mayor John Peyton, who recently toured one of Saft’s plants in France during a meeting with the company’s top executives, put his backing behind approval of the deal. He said the city faced competition from other cities that also wooed Saft with financial incentives. He said the factory would be a boost for development of Cecil Commerce Center, the former Navy base, and also welcome economic news in the midst of the recession.

“We think this type of technology is state of the art,” Peyton said. “It’s something that adds to our portfolio of industries.”

Saft America, which is part of French-based Saft, a global company, announced in May that construction of the battery plant in Jacksonville would create 800 jobs within three years.
But the legislation filed Wednesday with the City Council ties the financial incentives to the company creating 279 jobs by the end of 2017.

Peyton said Saft is “bullish that there is a huge market opportunity” for the batteries that would be produced at the plant and expects employment will exceed 279 jobs. But in negotiations for incentives, the city and company pegged the financial support to a conservative figure for job creation.

City Council Vice President Jack Webb said the prospect of manufacturing jobs makes him inclined to support financial incentives. But he said he wants to analyze the specific details of the legislation and determine whether the amount of incentives being offered is justified by the number of jobs that would come to Jacksonville.

The provisions of the proposed incentives are:

• The state would pay up to roughly $1.9 million and the city would match that with $474,000 through the state’s Qualified Target Industry program. The program refunds state taxes paid by businesses that pay above-average wages and are the types of business the state wants to expand. The maximum payout to Saft would depend on how many jobs that company creates at the Jacksonville plant.
• Jacksonville would pay up to $3.3 million through the city’s Recaptured Enhanced Value Grant program, which is based on how much a company’s investment adds new property tax revenue to city coffers.
• Jacksonville also would pay $1 million to Saft in the form of an economic development grant.
• The company would get an exemption from paying the public service tax, which the city assesses on electric and water sales, worth up to $550,000 over a five-year period.
• Jacksonville would sell a 12-acre tract to Saft at Cecil Commerce Center for $1.

“We tried to do all we could to make sure we could win the deal,” Peyton said.

He said a big hurdle the city faced is Saft consumes a large amount of electricity at its plants and other cities have lower electric rates than Jacksonville.

Saft also considered other sites in North Carolina and Georgia where it already operates manufacturing plants.

Peter Denoncourt, vice president of manufacturing for Saft at the company’s Valdosta, Ga. plant, said company officials were confident about their chances for federal funding, notwithstanding the flood of applications.

“We have been in this business for such a long time that we felt pretty confident that we would be successful,” he said. “We weren’t really intimidated by the large number of applications because we know who our credible competition is.”

Saft also partnered with Johnson Controls in a separate successful application for $299 million to build a battery plant for plug-in vehicles in Michigan.

The federal funding comes from the stimulus packaged signed by President Barack Obama in February. The funding is aimed at speeding up the development of a manufacturing capacity for batteries and electric drive components.

“If we want to reduce our dependence on oil, put Americans back to work and reassert our manufacturing sector as one of the greatest in the world, we must produce the advanced, efficient vehicles of the future,” Obama said in an announcement of the grant recipients.

For more visit: Stimulus Grants

Source: Florida Times Union