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Pennsylvania

$13 million in incentives lures battery maker to Westmoreland County

Rich Cholodofsky
| Wednesday, March 28, 2012

A Lawrenceville-based advanced battery maker has accepted more than $13 million in state incentives to locate its manufacturing operations in the former Sony television assembly plant in Westmoreland County, according to records obtained by the Tribune-Review.

Aquion Energy Inc. Chief Executive Officer Scott Pearson confirmed on Tuesday his company will use a package from the state Department of Community and Economic Development to open a $70 million, 250,000-square-foot factory in East Huntingdon, where he hopes to employ more than 500 workers within three years.

The package includes as much as $10 million in low-interest loans and $1 million in tax credits, according to records. The company, with about 70 employees now, also could receive a $2 million grant to make rent payments at the site.

Earlier, officials said the privately held company, founded in 2008, would use a combination of private and government-backed funding to launch the venture.

Aquion could receive an abatement of all state and local taxes for up to 15 years should the Sony site be accepted as a Keystone Opportunity Zone.

For that to happen, the state, along with Westmoreland County officials, East Huntingdon supervisors and the Southmoreland School District, would have to give approval. It's not known how much Aquion stands to save from the designation.

The deal was revealed yesterday in response to a request by the Tribune-Review under the state's Right-to-Know law.

The offer to Aquion is the fourth time in four decades that state officials have crafted a package of incentives to lure a manufacturer to the East Huntingdon site. Since 1976, more than $150 million in state grants and loans have been infused into the location.

"This is a cutting-edge project, and we were able to work with the company to get them to invest in Pennsylvania and the region," said Steve Kratz, spokesman for the state economic development agency. "It would have been a real loss if they developed the technology here and took it to another state."

Kelli Roberts, spokeswoman for Gov. Tom Corbett, said the deal is worth the investment.

"Obviously, the economic growth and job growth it could bring to the region is very important," Roberts said. "We see the benefits of this by creating economic development in our area and furthering our energy self-sufficiency mission."

In February, Aquion officials announced Westmoreland won out over sites in three other states and one in Asia to produce commercial-grade batteries using sodium instead of lithium, providing a less-expensive method of storing electricity generated by renewable energy sources such as wind and solar power.

Company officials said they hope to begin production next year. Pearson said tens of thousands of batteries a day could roll off the lines at the new plant, compared with about 60 a day at the firm's plant in Lawrenceville.

One official said designation as a Keystone Opportunity Zone was crucial in the deal.

"It's probably the strongest marketing tool the state would have," Westmoreland County planning director Jason Rigone said.

The state invested millions of dollars to lure Chrysler Corp. to the East Huntingdon site in the late 1960s, but the company backed out before the plant was completed.

The state spent about $100 million in 1976 to get Volkswagen of America to use the plant to produce its Rabbit and Golf automobiles. Volkswagen closed the plant in 1988.

In the early 1990s, the state pledged $40 million to convert the plant to a television production factory. Sony shuttered the plant in March 2010.

With Sony's departure, the state, which is the leasing agent that operates the site, was left with a nearly vacant, 2.8-million-square-foot manufacturing facility.

Last year, Pennsylvania provided $10 million in funds from the Redevelopment Assistance Capital Program to convert the building into a multi-tenant facility.

There are now three tenants at the industrial park.

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