HOLLAND, Mich. (WOOD) — Transformational.
That’s the word Holland City manager Keith Van Beek’s using to describe the proposal from LG Chem Energy Solutions. A $1.7 billion investment at the current LG Energy Solutions plant in Holland’s south side, promising over a thousand jobs by the time it’s completed in 2025.
The Holland City Council held a public meeting Monday night to discuss a proposed expansion of LG Energy Solution’s battery plant.
The company wants to move into the phase 2 expansion of its property at 1 LG Way. The plans call for adding a two-story building to its campus that’s nearly 963,000 square feet. A warehouse, control room, cell test building, administrative office, utility and control rooms and safety facilities are also included in the proposal.
LG notified the Whitmer administration last month that Holland had been selected for the investment in the company’s U.S. battery production. The expansion is expected to create more than 1,000 skilled, high paying jobs by 2025, according to city documents.
On Monday, Holland city leaders said the jobs are expected to pay an average of $50,000 a year.
The city says the expansion would give the state better opportunity to compete in the energy industry. Currently one-third of all car battery production and development for vehicles in the U.S. takes place in Michigan, but Jennifer Owens with the Lakeshore Advantage says many companies are now choosing to bring facilities to southern states because of the incentives.
“We think today is really exciting not only for our community but really for our state to really start winning when it comes to this energy space for the future,” said Owens.
Several homeowners who live near the existing Holland plant spoke to council Monday about their concerns.
“I worry about the air and water quality, the water runoff in the creek as we are already in water lowlands that get flooded, the increased noise,” said one woman. “We already hear those wonderful alarms going off all day and night and I worry about my kids playing in the backend of a property.”
Some say their property values have already plummeted because of their home’s proximity to the plant.
“We lost a large amount of equity, not to mention 100% of the desirability on the housing market. What we learned through our sale and is even more true now, while our houses still have an appraised value, they’re essentially worthless on the market,” said one neighbor who recently sold their home near the plant.
While there were concerns, there were also Holland residents excited about the potential jobs that would come to the area when the plant is completed.
“There’s a lot of jobs here and those jobs are going to be ladders up for folks in the community that do live here now,” said one man.
The city says those jobs would mean increased demand for affordable housing, which is why the state is expected to offer LG a $525 million incentive package and set up a $10 million workforce housing loan program to support affordable housing in the area.
Ryan Kilpatrick with Housing Next says the loans would go to nonprofit and for-profit developers to build the housing in the area. There is no finalized location for the affordable homes. Kilpatrick says it would likely result in 100-150 units, depending on the cost of materials and design.
“We’re still having conversations with the state about how that will be structured at the Michigan Economic Development Corporation, how those loans will participate and be used in eligible projects and what role we’ll play here on the ground,” said Kilpatrick.
Along with the $525 million in state incentive, the LG site would be considered a state-authorized Renaissance Zone, giving the company a break on property taxes for the next 20 years.
“The city has to approve or agree to that Renaissance Zone before it would go ultimately to the state for final consideration and approval,” Van Beek said.
Van Beek can’t say what the impact would have been on the city budget if the expansion was taxed.
“It can be hard to project exactly what the value of that incentive will be over time,” Van Beek said.
But he says there will be an impact from the addition of a thousand new paychecks being spent locally.
“They’re good paying jobs which has a positive impact on our citizens,” he said.
There was similar optimism when the plant opened in 2011. Former President Barrack Obama was at the groundbreaking for the plant in July of 2010. Federal Recovery Act Funds totaling $151 million helped build the plant.
But that optimism soon faded.
In 2012, Target 8 Investigators learned production was so low employees were sent to do community service work outside the plant.
Van Beek says times have changed and the plant has grown. He says the difference can be measured two ways, from the number of cars in the employee parking lot at the plant to the kind of vehicle parked in a lot of driveways these days.
“Electric vehicles are … becoming more popular, but quite frankly, they’re becoming the norm, the expectation of the future,” Van Beek said.
The Holland Board of Public Works is proposing building a $10 million substation near the expansion to support the plant’s energy usage, which is expected to grow as well.
“Because we have a municipal electric provider, they are purchasing a lot of electricity in order to produce these batteries,” Van Beek said. “That does have a positive impact both on the BPW bottom line, which keeps the rates lower for all of our customers, but it also helps offset some of the general fund costs for the city.”
The city has scheduled a public hearing on the Renaissance Zone application for Feb. 2, with a vote on the application expected during the council’s Feb. 22 meeting. From there, the project would head to the state for final approval.
New 8’s Christa Ferguson contributed to this report.