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Richland offers tax breaks to woo ‘revolutionary’ battery parts plant to Horn Rapids

By Wendy Culverwell, Tri-City Herald
Published: December 27, 2023, 7:29am

KENNEWICK — Richland is competing with Butte, Mont. for a factory that would use new technology to produce anodes used in lithium-ion batteries

Cenate, based in Norway, will choose between Washington and Montana for a 40,000-square-foot production facility by mid-2024, Richland announced Monday.

The city is offering property tax breaks to convince Cenate to choose it for the company’s first-ever U.S. plant. Cenate aims to build plants near Oslo and in the U.S. to mass produce anodes using its new technology.

Advantage Butte?

In August, Cenate announced it had secured access to an industrial site in Butte, noting Montana offered “substantial tax abatements.”

But it also said it would pursue “one or two” more U.S. sites “in parallel” and noted it had strong support from government officials in both Washington and Montana.

The Richland deal came together a few months later. The city council voted Nov. 7 to sell 50 acres at 2694 Horn Rapids Road to Cenate for $3.75 million, or $75,000 an acre.

If Richland is selected, Cenate could be among the first manufacturers eligible to take advantage the city’s new “targeted urban area,” or TUA, which offers tax incentives to new employers.

It isn’t yet eligible to apply. If it does choose Richland, the tax breaks would be one of the biggest reasons, said Mandy Wallner, the city’s economic development manager.

The value of the tax breaks has not yet been computed, Wallner said.

Tax breaks for jobs

Manufacturers that invest in targeted urban areas are eligible for property tax breaks in exchange for meeting job targets..

Richland created its targeted urban area in January, taking advantage of a new state law that lets cities and counties woo manufacturers with property tax breaks for up to 10 years.

ATI Inc., a specialty metals company, was the first to take advantage of the targeted urban area program when it began a $28 million expansion project in Richland in June.

Benton County created a parallel TUA this fall.

To qualify, employers must invest at least $800,000 in a building at least 10,000 square feet in size.

The site must employ at least 25 full-time workers and pay benefits plus wages of at least $23 an hour, 2,080 hours per year.

New manufacturers must also start construction within three years of purchasing property. They can seek a two-year extension to complete work to qualify for tax breaks, for a total lead time of five years.

Richland’s 2024 legislative priorities include amending the TUA rules to give nuclear businesses more time to build their plants, particularly if they need to be certified by the Nuclear Regulatory Commission.

It cited Framatome’s plan to partner with Ultra Safe Nuclear Corporation to expand its fuel production capabilities in Richland. A five-year development time limit would compel Framatome to build out of state, Richland said.

Revolutionizing battery production

Cenate specializes in silicon-containing anode materials used in the batteries that power everything from electronics and toys to electric vehicles. It would employ about 250, the city said.

It said its innovative materials have the potential to revolutionize battery production, reduce costs and cut carbon emissions.

The site under consideration is within in the city’s North Horn Rapids Industrial Park, also known as the Northwest Advanced Clean Energy Park.

The Cenate site is on land that was part of the 1,300-plus acres transferred to the city and the Port of Benton from the Department of Energy via the Tri-City Development Council.

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The park is meant to help the Tri-Cities position itself as a hub for clean energy development.

Butte, MT, Local Development Co., which prioritizes advanced materials and high tech manufacturing, could not be reached to comment on the case for siting the plant in Montana.

It outlines economic development incentives offered in Montana at bit.ly/479AXA3