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Rivian opponents ask Morgan court to reverse company's tax exemption
Rivian rendering
This exterior rendering of Rivian’s future Georgia manufacturing campus shows a view of the front of the plant building, along with planned green spaces filled with native plants. - photo by Special to The News

SOCIAL CIRCLE, Ga. — Some Rivian opponents are asking a judge to reverse a board's designation of the company's future site as tax-exempt because they say it violates the state constitution and will cause residents to shoulder a "greater share of the tax burden."

They also claim the length of a rental agreement between the four-county Joint Development Authority and Rivian for the site partly in Social Circle means it is taxable because it qualifies legally as an "estate" rather than a standard lease or "usufruct." 

Seven opponents of the planned vehicle production and training facility filed the legal action in Morgan County Superior Court Tuesday, June 21, asking a judge to reverse a board's approval of the tax-exempt status and a Payment in Lieu of Taxes (PILOT) plan by the four-county Joint Development Authority (JDA) that was used to induce Rivian to locate in Georgia.

Ironically, those filing the lawsuit include Rutledge resident JoEllen Artz while defendants include the Morgan County Board of Tax Assessors on which Artz's husband, John, is a member.

Other defendants include Rivian, the JDA and Walton County Board of Tax Assessors.

Gov. Brian Kemp announced in December that Rivian was planning a $5 billion production facility on the 2,000-acre site located in Social Circle and unincorporated Morgan and Walton counties on the north side of I-20. 

The state and JDA announced in March the company is receiving $1.5 billion in incentives to build in Georgia, including tax credits; state and local incentives totaling $1.28 billion; $198 million in state site and road improvements and other projects and services such as a state-sponsored training center.

Construction is expected to begin later this year with production starting in 2024. The plant will be designed to produce up to 400,000 vehicles a year, officials said.

The PILOT agreement requires Rivian to meet a number of performance goals, including creation of 7,500 jobs paying an average starting salary of about $55,000 apiece.

Chas Moore, a spokesperson for the opponents including, said, “Rivian and the boondoggle King Kemp are working on is not a done deal."

“Citizens are serious about stopping this plundering of our land, sky, and water against our will,” Moore said.

John Christy, an Atlanta attorney who filed the legal action, said, "The complaint speaks for itself but we look forward to having the matter heard before the Superior Court and are confident in our analysis of the law and conclusion that the rental agreement is not a non-taxable usufruct.”   

However, a statement from the JDA, which includes members from Newton and Walton counties, said the "legal challenge is entirely without merit."

"Once again, this activist group that does not represent the opinion and thinking of the majority of our community is attempting to sabotage a generational economic development opportunity," the JDA said.

"This legal challenge will cost the taxpayers of Jasper, Morgan, Newton and Walton counties by engaging in a frivolous legal action that won’t have any impact on the project’s success. The JDA looks forward to the project’s groundbreaking later this summer.”

The Rivian opponents' attorneys, Christy and Scott Peters, wrote in the request for review that the Morgan County Board of Tax Assessors' (MCBTA) recent determination that Rivian's interest in the property qualified as tax-exempt was "based on an erroneous legal interpretation of the rental agreement" with the JDA and "violates petitioners' rights" under the Georgia Constitution "to have their property taxed equally and uniformly with other property located within Morgan County." 

"Petitioners will suffer damages as a result of the obligation to pay a greater share of the tax burden of Morgan County than would otherwise exist if Rivian's interest under the rental agreement were properly taxed as required by Georgia law," they wrote.  

"The erroneous approval of the PILOT Agreement and the erroneous determination that interests of Rivian under the rental agreement constitutes an untaxable usufruct constitutes an unconstitutional gratuity in violation of (the Georgia Constitution). 

"Despite the MCBTA's and individual respondents' decision to the contrary, Rivian's interest in the property clearly constitutes an estate for years — not a usufruct­ — thus subjecting it to the payment of ad valorem tax.

"The terms of the rental agreement which are inconsistent with the finding it is a usufruct are numerous. For example, the length of the rental agreement between the JDA and Rivian is greater than five years, thus creating a rebuttable presumption 'that the parties intended to create an estate for years rather than a usufruct,'" the attorneys wrote. 

"Specifically, the term of the rental agreement is effectively 25 years, with only an option for Rivian to terminate the agreement earlier if it desires to do so. 

"Section 5.1 of the rental agreement provides that the initial term will continue through Dec. 1, 2027, and then provides for four additional 'options' whereby Rivian may unilaterally extend the agreement for an additional 20 years. These 'options' are automatically exercised unless Rivian takes affirmative action to provide written notice of its intent not to extend the agreement at least 60 days prior to the end of the then-existing term. 

"These are therefore not true options to extend, but rather constitute options to terminate running in favor of Rivian. In other words, the true term of the rental agreement is 25 years. Thus, a rebuttable presumption is created that the rental agreement constitutes an estate for years subject to taxation, and the burden is on the JDA and Rivian to prove otherwise." 

They said the seven petitioners are asking a judge to reverse the PILOT agreement and the MCBTA's determination that "Rivian's interest under the rental agreement is exempt from Georgia ad valorem real property and personal property tax."