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Utah has awarded up to $69 million in future tax breaks to a Logan company that plans to produce batteries for flying cars and other aerospace applications at a new factory that will hire as many as 3,100 new employees over the next nine years.
Electric Power Systems has been marketing battery systems for aviation for years, having moved to Logan from California five years ago after the state gave the company its first incentive. This time, the company plans to build a 700,000-square-foot manufacturing plant in the Logan-North Logan area.
CEO Nathan Millecam said EPS has more experience than anyone in designing battery systems capable of powering aircraft, including small, car-size craft. “We call them electric vertical takeoff and landing vehicles.”
The company currently employs 135 people in Logan. It sells battery power systems to Boeing, NASA and Bell helicopters, among others, Millecam said EPS said.
“We plan to invest hundreds of millions in capital expenditures to start production,” he told the Go Utah board that granted the tax incentive Thursday. “… This is the most advanced battery manufacturing in the world.”
EPS spokesperson Abbie Bean said the 3,100 jobs, which will be phased in over nine years, will have an average wage of $75,000 a year plus benefits.
“We are also building our own electric aircraft and will have a first flight hopefully this year, and that is being built at our facility in Logan,” she added.
“This is a real difference maker for Cache Valley,” said Kirk Jensen, economic development director for Logan.
The grant from the Governor’s Office of Economic Opportunity came from the Rural Economic Development Tax Incentive Financing program (REDTIF) and was approved by the Go Utah board appointed by the governor. Like all state tax incentives, it is a “post-performance” grant. No funds are fronted to the company. Instead, it must prove it has paid new employees the target wages to receive the income tax breaks on future income.
As projected, the company will pay out $867 million in wages over the nine years, which would generate $279 million in new state tax revenue. Under the grant, EPS would be able to keep 25% of that tax revenue, which is about $69 million.
“I love everything you’re doing,” Susan Johnson, Go Utah board chair, told EPS executives at Thursday’s meeting. She said the economic benefit will extend beyond EPS as other companies supply the factory.
“We see a supply chain getting built around us,” Millecam said.
“EP Systems’ expansion will help Utah grow its battery-powered industry,” said Theresa Foxley, president and CEO of the Economic Development Corporation of Utah. “The company has established itself as the leader in the electrified aeronautics space, and we’re proud to call them a Utah brand.”
Correction: The average annual wage for the jobs is $75,000. An earlier version gave an incorrect figure.
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