Gotion wants Michigan township to pay the $23.7M it owes in incentives

Gotion Inc. has asked a federal judge to order the Michigan township where it was supposed to call home to repay the roughly $23.7 million it owes the state in taxpayer-funded incentives.

Green Township’s actions opposing Gotion’s planned battery parts plant made it all but impossible to move forward, the company argued, leaving Gotion in default under its agreement with the state and on the hook for the $23.7 million in taxpayer-funded incentives it received for land purchases and improvements.

“Now that it is clear the project cannot move forward in the face of this continued opposition and the state of Michigan’s withdrawal of support, Gotion seeks to add these constitutional claims and request damages as a result of the township’s breach of the development agreement and violation of Gotion’s constitutional rights,” a May 29 court filing in the case said.

Last week’s filing seeks to amend an earlier lawsuit Gotion filed against Green Township over zoning changes that made its development all but impossible to proceed.

In February, the Sixth Circuit Court of Appeals blocked Gotion’s lawsuit, arguing that it was moot because the state had already found the project in default and had demanded back roughly $23.7 million that had been given to the subsidiary of a Chinese company to purchase and prepare land in Green Township. In light of that ruling, Gotion is seeking to amend its lawsuit to seek additional damages.

“…the Sixth Circuit implied that given the facts of the dispute at this point, the correct form of damages for Gotion’s breach of contract claim against the township is likely monetary damages and no longer injunctive relief,” Gotion said in the May 29 filing.

The amended filing includes demands for damages arising from the “millions” Gotion paid or spent in reliance on the project moving forward, lost profits the company would have made if the manufacturing facility were built, attorney fees and an amount “not less than $23,670,873.56 for funds advanced towards land and development costs related to the project that the state of Michigan is now claiming should be repaid.”

Attorney General Dana Nessel’s office, which is seeking to recoup the $23.7 million on behalf of the Michigan Strategic Fund, said it was aware of Gotion’s May 29 filing against Green Township and is “monitoring the situation.” The office declined further comment, citing attorney-client privilege.

Gotion first sued Green Township in March 2024 after the board — all of whom had been replaced in November 2023 with members concerned about the Gotion project — rescinded two resolutions needed for the project to move forward. Gotion sued in federal court for breach of contract, and a U.S. district court judge issued a preliminary ruling in Gotion’s favor.

But the Sixth Circuit later blocked the case after Gov. Gretchen Whitmer’s administration, last fall, found Gotion to be in default of its grant agreement.

The state’s finding of default was in part due to the Green Township lawsuit. The company’s agreement with the state prohibits involvement in a suit that “would reasonably be expected to have a material adverse effect on the project or the grantee’s performance of its obligations under this agreement.”

The state also maintained Gotion’s “cessation of eligible activities” for a period of 120 days constituted an “abandonment” in violation of the grant agreement.

The Michigan Strategic Fund said it would seek to recoup the $23.7 million used to purchase and prepare land for Gotion in Green Township.

The Gotion project in Green Township was fraught with controversy shortly after its announcement. The company had planned to locate a battery parts plant in the Big Rapids area, creating up to 2,350 jobs and receiving about $175 million in taxpayer-funded incentives for the project.

Local opponents pushed back on the project because of the secretive nature with which it was negotiated, the unknown environmental effects of the project and Gotion’s parent company in China. Those concerns were amplified by Republican candidates in 2024, including both Vice President JD Vance and President Donald Trump.

The legal maneuverings with Gotion have already come at a cost to the township.

For the past three years, the state Treasury Department has flagged Green Township in Mecosta County because its expenditures have exceeded the amount of money authorized in its annual budget. In a corrective action plan submitted to Treasury last month, the township said its deficits were “primarily due to the legal fees.”

eleblanc@detroitnews.com