CLARKSVILLE, TN (CLARKSVILLE NOW) – With an announcement as big as LG Chem’s cathode manufacturing plant in Clarksville, there is bound to be an abundance of community concerns. While many are ready to see what happens next with the largest foreign direct investment in Tennessee’s history, some still have questions.
Officials with the Clarksville-Montgomery County Industrial Development Board (IDB) recently sat down with Clarksville Now to answer those frequently asked questions on tax incentives, environmental concerns and more.
MORE: 5 things to know about $3.2 billion LG Chem plant coming to Clarksville
Question: What exactly will the plant produce?
The LG Chem plant in Clarksville will produce cathode material for electric vehicle (EV) batteries, with a production target of 120,000 tons of cathode material annually by 2027. They will not be producing whole batteries.
“So, this is not a battery acid factory or any of the things that have been discussed. Those things will not be happening at this location,” said Shea Hopkins, IDB executive director.
Cathode material is a powdery substance and is just one component of a battery. According to Raw Materials Inc., batteries are made of three parts: the anode, or negative side of the battery; the cathode, referred to as the positive side of the battery; and the electrolyte, which separates the anode and cathode and transforms chemical energy into electrical energy.
Josh Ward, IDB director of economic development, said that to make this material, LG Chem had to request a zoning variance for the height of the facility, which was approved several months ago.
“We got a 200-foot variance, but it’s only going to be 140 feet high, so 60 feet less than the variance,” Ward said. “They (LG Chem) have these large hoppers. They put the material in the top of the hopper, and it processes down, and they export the powder material to another manufacturer who puts the battery together.”
Question: What is the environmental impact?
The plant will be not be a major pollutant, and is at the bottom of the scale when it comes to state and federal pollution categories, Hopkins said.
“LG Chem is actually a minor source, so it’s the lowest level you could possibly be as far as environmental concerns go. And all of those environmental concerns are regulated through the Tennessee Department of Environment and Conservation (TDEC),” Hopkins told Clarksville Now. “So, it’s not anyone here in Clarksville determining how safe a company is. That’s happening on the state and federal level.”
Ward added that LG Chem works with a staff of dedicated full-time environmental experts and is required to submit several permits before projects can begin.
“It’s a state-regulated process for them to even get permitted,” he said. “There are outside sources monitoring the air quality, and if there are any concerns, they have to mitigate the concerns.”
The minor air quality source refers to dust and general debris from the factory. Ward explained that water coming in and out of the facility will also be treated as part of the process.
“They have to treat their own wastewater on site. So, before any water gets pumped into the system, it has to be treated in their facility, and they’re constructing that process in their factory,” Ward said. “So, air, wastewater and sewer are all being managed there on site, so this is really a low-impact environmental manufacturing facility.”
Question: How will the plant affect traffic and homes?
Some residents have raised concerns about how close the plant will be to homes and to Charles Bell Road. IDB officials told Clarksville Now the project will have a “buffer zone” in between the property and neighboring homes.
“Part of the reason this was approved originally is because there is about a 40-acre buffer in between this property and the adjacent homes,” Hopkins said. “That will never be developed as anything but a buffer park space.”
While that won’t include the residents of Charles Bell Road, those residents will still be rather far from the plant.
“The setback for the building will be about 600 feet, or about two football fields. I know there was some concern that it was going to be right up on the road, and that’s not true,” Hopkins said.
A second entrance and exit will also be installed on the property so that not all traffic will be on Charles Bell Road.
Question: What are the community benefits?
High-wage jobs are one of the major benefits LG Chem is bringing to the community. The plant will create around 860 new jobs, with about 200 of those paying more than $100,000 per year.
Entry-level positions will also see higher pay ranges.
“We want people to know that LG Chem is, in fact, contractually obligated to pay their entry-level workers $24 an hour, so that is not just a promise. That is contractually obligated, or they have the potential for penalties as a company,” Hopkins said.
Many residents were concerned that the company would hire all positions directly from Korea, but the IDB reports that the majority of hires will be local.
“They’re going to work with the universities, they’re going to work with the work force providers and they’re going to fill those jobs,” Chris Self, workforce development coordinator, told Clarksville Now.
When it comes to the 200 jobs that will pay over $100,000 a year, that alone adds up to $20 million annually in new income dollars for the community.
“Some of them are going to be local, some of them are going to be brought in from other communities, and some of them are going to come from Korea, but at the end of the day, it’s still $20 million just in these 200 jobs, once they get to full capacity, of new dollars to Clarksville.”
Aside from the employment benefits, the plant will bring water upgrades to the area. IDB officials report that LG Chem is a large water user and will be paying for about $11 million in water system upgrades.
“It’s actually going to benefit the grid because they’re going to create so much capacity that Clarksville Gas & Water can then serve the residents in the surrounding area. So, they’re upgrading the whole system, not just for their factory but for the whole surrounding area,” Ward said.
Construction of the plant will begin in the first quarter of 2023, with mass production to start in the second half of 2025.
Question: What tax benefits will come from LG Chem?
Securing the $3.2 billion project was no small task, the IDB officials said. It was a highly competitive process, as the company was looking at multiple states that all offered their own set of incentives.
A 20-year PILOT (payment in lieu of taxes) has been approved for LG Chem in Clarksville, but the plant will still offer millions of dollars in tax revenue before the end of those two decades.
“Even in the 20 years with the tax incentives, the county is still getting $146.9 million (and) the city is still getting $130.3 million from the company in tax revenue (total over those 20 years). And then after the 20 years, it’s 100%. It will be exponentially more,” Ward said.
He said those who want road improvements should understand that a company like this entering the community brings along the tax revenue to make that happen.
“Everybody wants improved roads and infrastructure, but the way you pay for that is through these large companies and increasing the tax base by millions of dollars a year. We all pay taxes, but not to the level of an industrial user.”
Hopkins added that the expected tax revenue increase doesn’t include the amount of people buying homes, cars, eating at restaurants and spending money on other activities within the community. So the economic impact will be much higher.
“We’ve been working on this project for almost a year, and so every concern, every question that they’ve (the community) asked, we’ve been studying over the last 12 months. We’ve been asking those same questions. We’ve been ensuring that this is definitely a community benefit.”