By Derek R. Smith and Erin Meyer, Daily Repoter
HANCOCK COUNTY - Lithiumion battery pioneer EnerDel could bring 800 high-paying jobs to Mt. Comfort if the county wins a threeway competition to lure the company - and strikes what would be an unprecedented deal in terms of incentives.
"We are evaluating sites, but we haven't made any decisions," said Guy Westermeyer, a local EnerDel spokesman. What will be the company's third Indiana facility "will allow us to expand our footprint in the state," he said.
EnerDel develops and manufactures lithium-ion batteries - competing in a race to be the first company to mass-produce these batteries for the automotive sector.
With an Indianapolis manufacturing facility and a Noblesville assembly plant, EnerDel workers are developing batteries for future generations of hybrid, hybrid plugin and electric vehicles. Other applications of the lithium-ion technology involve energy storage and electrification, according to the Web site of Ener1 Inc., the firm's New York-based parent company.
EnerDel's third facility will allow the firm to double its capacity and will involve both manufacturing and assembly, Westermeyer said. It will also employ many more workers than the 100 who work at its Indianapolis facility.
As EnerDel shops around for a new home in Hancock, Madison or Hamilton counties, the Hancock County Council is mustering its resources to court the company and win the 800 new jobs and $184 million in investment it promises.
"They started out with a long list, pared it down and we are still on it," said County Commissioner Tom Stevens.
EnerDel has an interest in locating a new manufacturing facility in a building at Axcess70 Business Park, Dennis Maloy, executive director of Hancock Economic Development Council, told the county council Wednesday morning.
Maloy sought council approval Wednesday to forward a proposal detailing the incentive package to EnerDel executives.
"We want this to be a win for EnerDel and a win for Hancock County," Maloy said.
Axcess70 is a new 153-acre development by Browning Investments of Indianapolis off CR 300N east of Mt. Comfort Road. EnerDel has its sights set on Building 1, according to a document Maloy gave to the council. Building 1 is a bulk warehouse with 423,000 square feet available, according to Browning's Web site.
To entice EnerDel, county officials have sweetened the pot with an incentive package worth $28.6 million. Unprecedented by local standards, the package includes a 10-year personal property tax abatement, tax increment financing, recovery zone facility bonds, a foreign trade zone and transportation infrastructure.
"We've got to say something by this evening," Councilwoman Rosalie Richardson said. "It is a little scary, but the only obligation of the taxpayers is in the future on the road (infrastructure project)."
After hearing Maloy's EnerDel pitch, County Council President Bill Bolander said "I think we should take a run at it."
Officials in Hamilton and Madison counties have already submitted their proposals to lure EnerDel.
"They were just waiting on us," Councilman Jim Shelby said, adding that Hancock County has not been privy to the details of competing offers.
Two buildings are up at Axcess70, but no companies have yet committed. Among the advantages of the park is its proximity to Interstate 70. Also, the park's developer, Browning, is a well-known commodity with more than 30 years of experience in real estate transactions. It's unclear how the sites in Hamilton and Madison counties stack up.
EnerDel competes in an industry with great growth potential and facing stiff competition from Asian companies.
In 2005, Japanese companies had a 57 percent share of the global market, followed by South Korea (17 percent) and China (13 percent), according to EnerDel's Web site.
However, EnerDel operates the only large-scale lithium-ion manufacturing facility for automotive applications in the United States, according to the Ener1 Web site.
And now EnerDel is flush with federal stimulus dollars granted last week to help it further develop its technology and double its U.S. production capacity.
President Obama announced Aug. 5 that EnerDel will receive $118.5 million in federal grant money as part of a massive stimulus investment of $2.4 billion in technologies involving electric and hybrid vehicles.
EnerDel's $118.5 million will come in the form of a matching grant, which means the company has to come up with more capital to show the federal government it is committed to the project.
However, EnerDel will use the stimulus money on its Indianapolis facility, Westermeyer said, adding the company has separately applied for a low-interest federal loan for the new facility.
Maloy and several county officials visited EnerDel's Indianapolis headquarters last Friday.
To attract EnerDel, local officials are digging deeper than they have in the past because, if it works, the payback will be much greater.
"Normally, I would not go for an abatement in a TIF district," Shelby said. "But this is $170 million (of personal property); it's entirely different."
Even with federal and local assistance, there are no guarantees that EnerDel will succeed.
"The downside is that the product is a new technology," Shelby said. "It has not been tested and accepted by the market. So the business risk here is very high."
The county drew the line at a handout.
"(EnerDel) came across to me as expecting taxpayers to gamble with them," Shelby said. "We compromised. There's no risk to the taxpayer."
By specifying that EnerDel will be responsible for purchasing the bonds, which is how government units borrow money, he said the offer does not overburden local taxpayers if the company folds or the project fails.
"If we do that the taxpayers will not have any liability, even if EnerDel goes bust," Shelby said.
The market for automotive lithium-ion batteries for cars is still in its infancy, with companies like EnerDel attempting to sign agreements with automakers to rev up capacity and lower production costs.
EnerDel announced July 30 it was teaming up with automaker Nissan Motor Co. to research "a new generation of electrical conductive material" intended to lower cost and improve the performance of batteries for electric and hybrid vehicles.
Earlier that month, EnerDel announced that Volvo had chosen its batteries to power a pair of plug-in hybrid V70 demonstration cars that will be shown in Europe this fall as part of a development program leading up to the 2012 launch of a production plug-in model.
Fisker Automotive isn't a household name, but the independent American automaker is developing green vehicle for the global automotive market. In May, EnerDel announced that Fisker had signed a letter of intent to use its batteries for the Fisker Karma. Set to come out in June 2010, the Karma is anticipated to be the first plug-in hybrid electric vehicle to market, according to an Ener1 news release.
"Based on what I know about the company, I definitely would like to see (EnerDel) come our way," said Stevens, who was among the local contingent to visit EnerDel's headquarters. "It's a company that's, in my opinion, on the leading edge of a technology that's going to be commonplace as time goes on."
Council members, most of whom learned about the proposal only yesterday, appeared eager to welcome EnerDel and hundreds of good-paying jobs to the county. But having had little time to examine the details of the incentive package, they are proceeding cautiously.
Before approving tax abatements, the council is also bound by law to hold a public hearing.