Lucid Motors to lease more than 1,300 acres in Casa Grande
Update: As expected, the Pinal County Board of Supervisors on Monday approved the lease and purchase agreement with Lucid Group Inc. in a 4-1 vote. It also approved the bond in a 4-1 vote.
The county manager said the lease will bring Lucid’s overall site to about 2,000 acres, or the size of an OEM auto manufacturer campus. The county also said this would enable Lucid to produce its full line and have a supplier park.
Citing an economic impact report that was not included in the agenda, the county said Lucid could hire more than 6,000 when the “full vision” is built out. Over 20 years, the county added that the economic output would total an estimated $256 billion, while the tax revenue from Pinal County is expected to total $352 million.
“As we seek to expand our product offerings globally, we must continue to grow here in Arizona, and we frankly require additional space to do so. It’s worth emphasizing we see this investment as securing the county’s future as a national leader in vehicle electrification. As we expand, so too do the opportunities for a significant supplier network as well as our own operations to grow with us,” said Daniel Witt, Lucid’s head of state and local public policy, at the special session on Monday.
Stifel, Nicolaus & Co. also told the county at the meeting that the land acquisition for industrial development through the tax revenue bond would total about $114 million.
Original story: Weeks after Lucid Motors (Nasdaq: LCID) purchased 120 acres around its existing plant, newly released documents show the electric vehicle startup could be planning an even bigger expansion in Pinal County.
The Pinal County Board of Supervisors will vote Monday afternoon in a special session on a development agreement, lease and purchase agreement with Lucid USA Inc. for more than 1,300 acres around the company’s existing facility.
The proposed agreements will allow the county and Casa Grande to lease the property to Lucid Motors for an annual rent of $7.1 million for four years with the option to purchase the site, according to city documents. Casa Grande is looking to annex and rezone the property for industrial development.
The Board of Supervisors will also vote on Monday to approve a $126 million tax revenue bond, which could go toward purchasing the property Lucid will lease or other sites for industrial development projects in the county. The resolution for the bond does not specify what parcels are being purchased.
The bond also has an estimated interest of nearly $140 million and will be paid back by the potential industrial companies, according to the county.
In 2018, Pinal County purchased an initial 500 acres for nearly $30 million in Casa Grande to be leased and eventually sold to Lucid Motors, which built its first plant on the site. Through the agreement, Lucid is paying $1.8 million annual rent for four years before it purchases the 500 acres.
Plans for the property
Documents said Lucid Motors is considering using the new site for uses related to its adjacent car manufacturing, assembly and testing facility. Its current plant is located about an hour south of Phoenix at the southwest corner of Thornton and Peters roads between Interstates 10 and 8 in Casa Grande.
The newest proposed lease is generally located south of the Lucid plant from Burris to Chuichu roads and Peters to Cornman roads. Specific site plans for the area have not been released, but the development agreement promises Lucid an expedited review and processing of building plans, building permits and any other development or construction related applications or approvals without additional fees or charges, documents said.
The city of Casa Grande said that “encouraging” development of the property through the agreement will also result in “significant” planning, economic and other public purpose benefits for the city and its residents. In addition, the agreement said Lucid could seek out Foreign Trade Zone status for the site, which could significantly reduce property taxes if it receives federal approval for the designation.
In its most recent annual report, Lucid Motors said at full build out, its AMP-1 plant is expected to total more than 5 million square feet across the initial 500 acres. Lucid, which had a net loss of $81 million in the first quarter of this year, also said it expects its Arizona facility to have an annual output capacity of 90,000 vehicles per year by the end of 2023.
In September, Lucid opened AMP-1, a 1 million-square-foot facility, where it started producing its first batch of vehicles. Lucid also started construction on new factory just south of the existing plant, which is expected to add an additional 2.85 million square feet to the company’s footprint.
Lucid, which leased a 116,000-square-foot space in Tempe, also has about 2,000 employees in Arizona and plans to hire 1,000 more by the end of this year. Its rapid expansion has started to put more pressure on housing vacancies and basic services within Casa Grande.
Lucid recently confirmed that it froze production for a week at its manufacturing plant in Casa Grande, according to a June report by Business Insider. The company said its scheduled pause was needed to install tooling for assembly of the Air Pure.
The company has in recent months experienced challenges with the supply chain. Business Insider also reported that Lucid had missed its 2021 production goals and already lowered its 2022 target from 20,000 cars to between 12,000 and 14,000.