The Queen Creek Town Council is scheduled to vote this week on two measures that will help pay for required infrastructure improvements in support of the planned LG Energy Solution battery manufacturing plant at the NEC of Germann Road and Ironwood Drive.
Under a development agreement with LGES, Queen Creek will widen existing roads, build new roads and improve water and sewer infrastructure at the site.
The total cost of the infrastructure improvements in support of the planned $5.5B battery plant is estimated at $84M. Queen Creek has already incurred approximately $12M in expenditures. The plant has not yet started construction, and no firm start date has been set. Construction is hoped to break ground at some point this year and deliver in 2025.
The Town had planned to pay for the improvements using construction sales tax revenue. However, since construction has not started, the Town is not receiving those revenues and does not have cash on hand for all the project costs.
Most of the costs will eventually be covered under a state reimbursement program that will return $67M, or 80% of expenditures. Queen Creek will use the construction sales tax funds to cover the remaining 20%. Before that can happen, LGES will have to spend at least $280M of its originally agreed $2.8B investment.
Queen Creek predicts it will have spent approximately $50M before the first construction sales tax revenues start coming in next June.
The measures under consideration this week consist of an interfund loan and an external interim funding source.
The interfund loan will use capital improvements funding totaling $23.4M. External financing is expected to repay that loan by Oct. 31 plus a 5% interest charge of $265K. The loan is intended to fund work until the Town can secure larger external loans over a longer term.
Under the second request before Council, the Town will request funding from banks and other financial institutions. The external funding is expected to close by Oct. 25. The loans will have to be paid off by June 1, 2028, but the Town expects to have them paid by June 30, 2025. (Source)