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Mar 11, 2023

Electrovaya seeks tax breaks for new Jamestown gigafactory

Nine months after announcing plans to open its first $75 million U.S.

Nine months after announcing plans to open its first $75 million U.S. manufacturing plant, a Canadian-based maker of lithium-ion batteries is seeking more than $3 million in tax breaks for its transformation of a vacant former manufacturing plant outside Jamestown.

The Chautauqua County Industrial Development Agency would be on top of more than $6.5 million in state grants that it already won.

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Mississauga-based Electrovaya Inc. wants to renovate and equip a 134,858-square-foot manufacturing facility in the Town of Ellicott that has been empty since Heidenhain closed an electronics and optics factory in 2018 and cut 40 jobs.

The facility would serve as a new "gigafactory" for the company's production and distribution of ceramic battery cells and packs, while creating 150 new jobs over the next three years, according to its CCIDA application. It's expected to produce more than one gigawatt-hour of battery and energy storage systems over the next five years.

That would add to the company's two factories in Canada and would address rising demand for its batteries, which are used in electric forklifts, trucks, robots, buses and other heavy-duty vehicles.

About 90% of Electrovaya's sales are in the U.S. market, so the new facility will not only be closer to customers logistically, but can also enable the company to compete for business that requires that products be made in America. And the facility at 1 Precision Way in the Town of Ellicott is large enough for the company to expand production as needed, with additional land to build on down the road.

Electrovaya, a publicly traded company based in Mississauga, Ont., said it had chosen a former manufacturing plant near Jamestown for the project.

The company completed its $5 million purchase of the 52-acre site in March from Sustainable Energy Jamestown, and plans to spend about $1 million on a renovation of the plant, which has the clean rooms that Electrovaya needs.

It will then invest at least $34.5 million to purchase the battery assembly, research, testing and logistical equipment, machinery and furniture for the new operation. It's also spending $2 million on professional fees.

Plans call for site preparation work, electrical infrastructure improvements and initial assembly installation during the current quarter, followed by commissioning of the equipment through yearend. Production would begin later this year or early next year.

Electrovaya said it expects to hire for management, professional, administrative, production, supervisory and labor jobs, with salaries ranging from $35,000 to $100,000 and a full-time annual payroll of $9.2 million after three years.

"In addition to high-quality job creation, this expansion project is well-aligned with initiatives across Chautauqua County to foster renewable energy and manufacturing for clean technology," the company added.

The $42.5 million project as laid out in the application for tax breaks appears to be scaled back from the initial announcement last October, when Electrovaya and state officials unveiled the project, highlighting plans for the much larger investment and creation of up to 250 jobs.

The project will be funded with $32 million in private loans, a $4.5 million conventional mortgage and $3.5 million in company equity. It was approved for up to $4 million in Excelsior Jobs tax credits from Empire State Development Corp., and another $2.5 million in capital funding from the state through the Western New York Regional Economic Development Council. It will also receive low-cost hydropower from New York Power Authority.

But it still says it needs the CCIDA help "for the venture to be economically feasible," and to "assist in accelerating plans for expansion." It's asking for $2.4 million in sales tax breaks, $62,250 in mortgage-recording tax relief and a 15-year payment-in-lieu-of-taxes that will save $572,639, with a fixed-payment per year that deviates from the agency's standard policy.

The CCIDA is expected to take up the application in June.

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News Business Reporter

I've been a business reporter at The Buffalo News since 2004, now covering residential and commercial real estate and development amid WNY's resurgence. I'm an upstate native, proud to call Buffalo my home, and committed to covering it thoroughly.

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