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Update on Canoo's Battery Module Plant in Pryor, OK.

Updated: Feb 5

Render of the building with Canoo logo - by Canoo

We had some new documents shared with us that shed some light on the Pryor Battery Module Plant that Canoo announced early December of last year.

The first set of documents is from a MAIP board meeting we theorized about when it happened back in September of last year. Thanks to these meeting minutes, we can confirm that it was indeed about Canoo leasing building 625 for their battery manufacturing plant. The second set of documents is called a Memorandum of Lease, which is a document that puts it into public record that there is is leasing agreement between Canoo and MAIP, signed on November 1st.

From these documents we learned the following:

  • Although we don't know the exact price, the lease will be at market rate.

  • The lease agreement is for 10 years, ending on December 31st, 2032.

  • Canoo will be afforded the "Right of First Refusal" to purchase the property at the conclusion of the lease agreement

  • Canoo is anticipating 75-85 jobs

  • MAIP is providing incentives for these jobs and will also provide $375,000 in improvements to the site.

The incentives for jobs was interesting, so we took a look at MAIP's website, and they list the following local, state and federal potentially incentives available.

  • MidAmerica Quick Action Incentives Fund. The park’s strong capital position allows us, at the discretion of our trustees, to provide financing for qualified projects.

  • Investment/New Jobs Tax Credit Package—doubled. Because MidAmerica is in an Enterprise Zone, these already-attractive credits get doubled. So, you can receive $1,000 per employee, or 2% of the cost of depreciable property—whichever is higher.

  • American Indian Lands tax credit. Because of MidAmerica’s location, qualified industries enjoy jobs tax credits and accelerated depreciation schedules.

  • Free customized workforce training. Take advantage of Oklahoma’s nationally-recognized Training for Industry Program (TIP), which provides quality training for businesses locating to Oklahoma. Choose from a range of top-ranked programs ready to be customized to your company’s needs—and provided right on-site at MidAmerica.

  • Oklahoma tax exemptions and credits. Qualified companies are eligible for many tax incentives. Freeport property/inventory exemptions on certain goods coming into Oklahoma and leaving within nine months, for example. Tax credits and exclusions for creating jobs and making investments. And much more.

  • Oklahoma Quality Jobs Program with a cash-back guarantee. Get direct quarterly cash payments of up to 5% of new taxable payroll for up to 10 years, with advantageous options for small and large employers.

  • Oklahoma Quality Investment Act Incentive. Companies can enjoy rebates for up to 10% of capital costs incurred for major retooling and modernization projects.If you were to spend even a small amount of time looking at the Canoo subreddit, you'd no doubt see comments referring to the battery module plant building still having a "for sale/lease" sign out front with the implication being that Canoo has either lied or pivoted away from the plan.


Is the Facility Delayed?

We see lots of comments on social media wondering about the current status of the facility or even suggestions it's been cancelled or another pivot must have been made, mostly because of claims that a "for sale/lease" sign is still displayed outside the facility.

We can confirm, as of a few weeks ago last month, that the building does indeed have a sign listing the property as still being available. Given the fact we know there is a signed lease agreement between MAIP and Canoo, it's pretty likely we can put to bed any claims of it being cancelled, but is it delayed?

Photos of the building from late December, 2022

Per the original press release, Canoo said they "will begin renovations on its 100K sq.ft building located on a 10-acre campus in Q4, 2022 in preparation for delivery of secured manufacturing equipment in Q1, 2023."

The sign being there isn't a big deal, it provides marketing for MAIP to get potential or interested parties to call them up, so it could just be a simple agreement between them that the sign can stay until Canoo is ready to move in. If MAIP's commitments to make tenant improvements were finalized, perhaps the sign will stay up until those improvements are finished.

We don't actually know if any of those improvements have been completed or even begun - so although it doesn't strike us as concerning yet and Canoo seems to be still be on track, it would be nice to see some external evidence of things happening soon or an official update from Canoo.

If you want to see the filings we mentioned, check out the companion video for this article on the following video:

UPDATE 2/5/23: We've heard there's some shimmers of activity happening at the Pryor battery module facility. Looks like maybe some excavation for underground utilities are being prepared for but the sign is still out front

Authors disclosures: I am long Canoo - I own common shares, warrants and call options.

#Manufacturing #Pryor #Batteries

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