$2.5 billion Alabama aluminum plant: $123 million in county incentives, $5 million from Bay Minette

Steve Fisher, president & CEO with Novelis Inc., speaks to reporters after a groundbreaking for his company's future aluminum manufacturing plant on Friday, October 7, 2022, at the South Alabama Mega Site near Bay Minette, Ala. (John Sharp/[email protected]).

Baldwin County taxpayers will provide over $123 million in tax abatements, infrastructure improvement and economic incentives for Novelis to build a massive $2.5 billion manufacturing plant north of Bay Minette.

The city of Bay Minette is also forking over incentives, including $5 million in cash to support the project. The city, with an annual overall budget of around $11.6 million, will pay out the cash incentive over a period of time. The first installment of $1.7 million was recently paid out, according to Bay Minette Mayor Bob Wills.

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The local incentives are on top of approximately $135.3 million in tax breaks and credits the state of Alabama is providing in final project. But despite the extra support from local taxpayers, the overall incentive package for the massive project falls well below the more than $800 million incentive package that North Alabama provided to attract a Mazda-Toyota plant a few years ago.

The estimated payroll for the Mazda-Toyota plant is $5.2 billion over 10 years. For the Novelis plant, it's estimated at $1.67 billion in new payroll related to construction and direct permanent jobs for the next two decades.

"It takes a lot of incentives to get industry like this to the area," said Bay Minette Mayor Bob Wills.

Indeed, county and city officials say the tax breaks are worth it. The Novelis plant is among the most expensive economic development projects in Alabama history.

It's a project that Wills said will be a "long-term relationship that will last for decades" and is expected to transform North Baldwin County.

"The investment they have made in our community is life changing," said Baldwin County Commission Chairman Jeb Ball. "It will change the face we have here forever."

Political dignitaries and Novelis representatives gathered at the South Baldwin Mega Site home for the future manufacturing site for a ceremonious groundbreaking on Friday. The event signified the beginning of what will be a long construction project that will culminate in the operations of a $2.5 billion low-carbon fully integrated aluminum recycling and rolling plant.

The investment is so significant that Wills said he anticipated Novelis taking control of the entire 3,000- acre Mega Site – the massive rural site north of Bay Minette that has, for the past decade, been marketed for a large manufacturing operation.

Bay Minette Mayor Bob Wills talks about the Novelis manufacturing plant coming near his community during a groundbreaking event for it on Friday October 7, 2022, at the South Alabama Mega Site. (John Sharp/[email protected]).

"We’re not exactly certain what is about to happen," Wills said. "We have a small-town atmosphere. Our goal is to try and maintain that atmosphere."

Bay Minette's assistance also includes infrastructure support. Wills said his city's utility board is working with Novelis officials about providing the proper sewer, water and natural gas to the site. He also said that traffic control will be needed throughout the construction period.

Wills said the city could discuss the potential of annexing the property into the city limits, though talks have not begun on that.

Novelis is planning to open the plant in early 2025.

The county is providing a 10-year non-educational property tax abatement that is estimated to cost $49.4 million. Sales and use tax abatements will total around an estimated $47.7 million. And infrastructure improvements at the Mega Site will cost the county $26 million.

The project was first announced during a news conference in May, and at the time only state incentives were unveiled. According to Alabama Commerce Secretary Greg Canfield, nothing has changed with the state incentive package since then.

They include:

A sign extols the virtues of recycling during the groundbreaking ceremony for the $2.5 billion Novelis aluminum manufacturing facility near Bay Minette, Ala., on Friday, October 8, 2022. (John Sharp/[email protected]).

The presence of Novelis is also supposed to support local schools and an evolving county-wide recycling program. The Baldwin County Commission is currently in the process of examining the designs for a new recycling facility at its landfill in Magnolia Springs.

Novelis officials, also on Friday, announced the company was distributing 30, state-of-the-art recycling bins to county facilities.

The Baldwin County plant will be primarily powered with renewable energy, use recycled water and be a zero-waste facility.

"You will hear Novelis talk about sustainability not because it's the latest trend or nice to have," said Novelis president & CEO Steve Fisher. "But because it's the heart of our company."

Novelis is committed to being a carbon-neutral company by 2050 or sooner and plans to reduce its carbon footprint by 30% by 2026.

The company is an Atlanta-based industrial aluminum company and is a subsidiary of Hindalco Industries Unlimited, based in India.

"Novelis prides itself that over something like 80 percent of their product is recycling," said Ball. "They are relying on us to pick up on our game on recycling and we’re willing to do that."

Lee Lawson, president and CEO with the Baldwin County Economic Development Alliance, said the county's project – a material recycling facility -- was in the works before Novelis announced it was building its manufacturing project in Baldwin County.

"It's an interesting thing that is weaved into this project," Lawson said. "The county was getting into the (recycling) business and it will totally benefit Novelis."

Novelis is also expected to play a role in the development of an Advanced Manufacturing and Leadership Training Center at Daphne's Innovation & Science Complex (DISC) on Alabama State Route 181. The DISC property's development has been in the works by Daphne city leaders since 2015.

Also, the plant will be linked to educational institutions like Coastal Alabama Community College and the Baldwin County Public School System, which is developing a career tech high school approximately four miles north of Interstate 10 in Loxley.

The project is expected to bring 1,000 jobs with an average annual salary of around $65,000.

Alabama Gov. Kay Ivey, who participated and spoke at the groundbreaking, said that anyone who is a Bay Minette resident looking for a job should be able to get one once the new plant is operational.

"The people of Bay Minette who think they have to leave to get a good paying job can think again," said Ivey. "These advance high paying jobs are right here in L.A., lower Alabama."

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