COOLIDGE — A company that specializes in the development of hybrid trucks has decided on Coolidge as the ideal spot to develop a manufacturing plant, less than a year after it announced it would build in a Valley city.
Nikola Corporation, which specializes in building pure electric and hydrogen-electric powertrains for big rigs among other endeavors, has announced that it will be developing a manufacturing facility in Coolidge.
The million-square-foot plant is to be located near Houser and Vail roads, south of the city core along State Route 87, and will produce hydrogen-electric vehicles designed for Class 8, or heavy truck, transportation.
According to Tom Stringer, the site selection consultant representing Nikola Corp., the plant will create approximately 1,800 to 2,000 jobs and bring approximately $1 billion in capital investment to the area.
An independent study conducted by economic and real estate consulting firm Elliott D. Pollack & Company found that a total of $800.8 million would be invested in the development of the new facility.
The study also indicates that the manufacturing site will generate approximately $278.3 million in wages and have an overall economic output of $717.2 million for the region during the construction period alone. By 2025, when the facility is anticipated to be at full production, the plant is expected to generate an economic impact of $1.2 billion.
“This is the project that was originally targeting Buckeye earlier this year,” Stringer said. “But because the company had received a substantial order from Anheuser-Busch, we’ve had to expedite our production schedule.”
Brewing company Anheuser-Busch pre-ordered hundreds of the zero-emission semi-trucks in May, which caused Nikola Corp. to reconsider locating to Buckeye. Instead, Stringer said the company began to look for sites that already had the infrastructure in place to support the development of the plant in a much quicker time frame.
“We needed to find a site where infrastructure was already in place,” Stringer said. “You know, your water, sewer, gas, electric hookups, roadway hookups, site grading completed so, effectively, we could start pushing dirt with a design and build a building.”
That was how they landed on Coolidge, and more specifically a 430-acre parcel owned by Saint Holdings LLC.
Designed for the Inland Port Arizona project, the area is being developed to include the infrastructure needed to attract major manufacturers and distribution centers to Coolidge. The industrial park is based off a similar, smaller-scale project developed in Casa Grande that is anticipated to become the future home of the Lucid Motors manufacturing plant.
The decision to build the facility at the Coolidge-based industrial park will shave several years off the development phase of the project, Stringer noted.
He also indicated that once the site is up and running, the factory will producing “several thousand” vehicles per year.
Nikola aims to outpace the demand for diesel trucks in the global market by providing a more green and cost-effective alternative.
“The Nikola business model and cost argument is overwhelming when compared to cost of operating a diesel truck,” Stringer said. “It’s substantially less expensive to operate a clean hydrogen-electric alternative.”
Anheuser-Busch has placed an order for “up to 800” trucks designed by Nikola. Stringer said that the potential to gain interest from other major fleet carriers like Amazon and Walmart is definitely there.
“Those are substantial players who operate several hundred to a thousand trucks,” he said. “The market is quite large.”
The hydrogen-powered fuel cells on the vehicles will allow drivers to travel up to 1,200 miles each time they fill up. Comparatively, a similar model of trucks developed by electric car manufacturer Tesla allows approximately 600 miles at maximum.
In addition, the Salt Lake City startup is already in the process of developing hydrogen refueling stations along interstates around the nation.
Preliminary design work on the Coolidge manufacturing plant is already underway. The motor vehicle company anticipates breaking ground for construction in the not-too-distant future, with site mobilization projected to be sometime in late 2019 or early 2020.
Nikola headquarters, on the other hand, will be relocating to Phoenix. The new headquarters and research and development facility are currently under construction.
“We were really attracted to the enthusiasm shown by the city of Buckeye (and) their partnership showed in conjunction with the Arizona Commerce Authority in the state and the Greater Phoenix Economic Council — it was a pretty incredible team effort,” Stringer said.
Coolidge City Manager Rick Miller echoed that sentiment during Monday’s City Council meeting.
“The initial offer and the incredible enthusiasm that was expressed by the city of Buckeye and GPEC (Greater Phoenix Economic Council) played a decisive role in helping this company choose Arizona in the first place,” he said. “Although they are looking at placing this manufacturing facility in Coolidge, we believe Arizona remains the perfect partner and location for Nikola to design and manufacture its revolutionary technology.”
During the meeting, the council adopted a Notice of Intent to enter into an Economic Development Retail Tax Incentive agreement with Nikola Corp.
Among the provisions laid out in the agreement are that the city provide a 49-percent sales tax reimbursement to the company for the construction of the facility over a period of 10 years, help designate the manufacturing site as a Foreign Trade Zone so the property taxes will be dramatically lowered and give a 49-percent sales tax reimbursement to the company for any direct sales made in Coolidge from the facility or from potential retail outlets that could locate in the city, among other stipulations.
The agreement will be voted on at the next City Council meeting held in two weeks.
“We’re extremely excited to be a part of several different communities in the Valley,” Stringer said. “I think we’re going to be an employer that everyone can be very proud of.”