LANSING, Mich. (Michigan News Source) – When the Michigan Strategic Fund asked Chinese battery manufacturer Gotion Inc. to return $23.67 million in taxpayer grant money after their taxpayer- funded project collapsed, the company didn’t exactly reach for its checkbook. Instead, according to Crain’s Detroit Business, Gotion offered up something else: the land.
Take the farm, leave the $24 million.
In a letter to the Attorney General’s office, Gotion’s attorney argued the company shouldn’t have to repay the grant used to buy farmland near Big Rapids for an electric vehicle battery parts plant because Green Charter Township made the project “undevelopable.” They also said that the company didn’t pocket the money. They used it to pay property owners in land deals.
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Never mind that the state formally declared the $2.4 billion project dead in October and the Michigan Economic Development Corporation pulled the plug after determining Gotion was in default.
Yet while the project may be officially defunct, the financial consequences are very much alive. Michigan News Source previously reported the price tag of this stalemate will be ticking upward – roughly $236,708 a month in potential penalties and interest if the money isn’t paid by Gotion by April 30.
“Not our fault,” says company.
Gotion insists it didn’t “voluntarily abandon” the project – that local backlash and political pressure doomed it. It also promises to pursue “significant monetary damages” from Green Charter Township in federal court.
In a letter obtained by Crain’s Detroit Business and sent to Assistant Attorney General James Ziehmer on Tuesday, February 10, Gotion attorney Mark Heusel said, “Gotion finds itself in an unfair, if not impossible, situation. The money that the State is now seeking to recover from Gotion was advanced for the specific purpose of purchasing the land for the construction of a manufacturing facility, but due to the actions of Green Charter Township, Gotion cannot develop this Project on that land. In essence, the land has been rendered undevelopable and is useless to Gotion.”
The attorney tried to negotiate a deal in the letter and said they are willing to sit down and “discuss an amicable resolution to the issues, but it cannot and will not simply repay funds for land it cannot use due to the actions of Green Charter Township.”
Heusel said that the “only equitable solution” is for the state to take the deed to the land and drop their claim – or have Green Charter Township buy the land from Gotion for the price that they paid for it which they said would mitigate a portion of the “hundreds of millions of dollars” in damages they allege were caused by the township’s breach of contract.
MEDC is reviewing the letter.
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The letter continued to say, “The shocking truth here is that the state of Michigan fully supported this Project until recently, when, apparently suffering from internal attacks and bowing to the anti-(Chinese Community Party) rhetoric that animated Green Charter Township’s opposition and breach of the Development Agreement, the State decided to abandon its support.”
The Michigan Economic Development Corporation (MEDC) confirmed to Michigan News Source that letter has been received and is being reviewed.
