Oklahoma has agreed to give electric vehicle manufacturer Canoo $15 million over the next four years from the state’s Quick Action Closing Fund if the company meets hiring targets and other goals.
While Canoo has said it plans to create 700 new jobs including engineering and tech positions in Tulsa as part of its long-term plans, the company will only have to create 85 high-paying jobs in the city by 2024 and maintain 179 jobs there through July 2027 to collect one $5 million chunk of the Quick Action money.
While Canoo is a startup that has yet to turn a profit, the $15-million deal is the largest the state has ever awarded since the Quick Action program was created under Gov. Mary Fallin in 2011. The fund is intended to allow the governor to lure new employers to the state with cash payments.
The Frontier obtained copies of two contracts the company has signed with the Oklahoma Department of Commerce for the Quick Action money through an open records request.
Canoo can collect up to $10 million in cash from the Quick Action Closing Fund to help build a new manufacturing plant in Pryor that could create 1,500 new jobs over the next decade, according to the first contract. The company will be able to collect the first $3 million after it spends at least $48 million and completes 10 percent of construction on the factory. In order to collect the full $10 million, Canoo must complete construction on the plant and invest $450 million in the facility by July 2026.
The company is also required to repay incentive money to the state if it does not begin building the factory by January 2023, complete construction by July 2026 or meet other performance goals.
Canoo can reap another $5 million in cash from the Quick Action fund to help create high-paying tech and engineering jobs in Tulsa, according to the second contract. The company has said it plans to create 700 new jobs for software development, research, customer support and financing in the city. Canoo plans to create those jobs over the next 10 years, but will only have to hire 85 people by July 2024 and meet certain wage requirements to collect the full $5 million, according to the contract.
The jobs Canoo has pledged to bring to Tulsa must have average annual salaries between $85,000 and $125,000 for the company to qualify for the incentive money.
Canoo is required to repay the money if it doesn’t hit its hiring goals and wage requirements by July 2027, according to the contract.
The company will also have to repay the state with interest and share any profits if it sells its Tulsa operations before meeting the job and wage requirements laid out in the contract.
In an earnings call on Monday, Canoo CEO Tony Aquila said the company has secured a combined $400 million in incentives from Oklahoma and Arkansas to bring its vehicles to market.
The company said in December it planned to make between 3,000 and 6,000 electric vehicles this year, but a prototype model is still in testing phases, the company said in an earnings release on Monday.
The details of other incentives the state of Oklahoma has offered from a package the company has valued at $300 million remain unclear.
The Oklahoma Department of Commerce is not currently offering Canoo any other incentives outside of the $15 million Quick Action funds, Amy Blackburn, a spokeswoman for the agency said Tuesday. But the company could be eligible for additional incentives after filing taxes in Oklahoma, she said.
The state-run MidAmerica Industrial Park in Pryor has also offered Canoo millions in incentives including free land and infrastructure.
The contracts
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