What has NC already spent on delayed VinFast site? And how has state used eminent domain?

Two businesses, one church, and four houses acquired. Roughly $96 million spent.

That is the tally North Carolina has thus far committed to the VinFast factory in southeast Chatham County, a project which fell into greater doubt last weekend when the Vietnamese carmaker again postponed its opening, this time until 2028.

VinFast has endured multi-billion-dollar yearly losses as its sought to gain a foothold in the North American auto market. In a sign of shifting geographic priorities, the seven-year-old company has announced plans to open new factories in India and Indonesia within the next two years. In a statement Friday, VinFast said delaying its Chatham factory “will allow the Company to optimize its capital allocation and manage its short-term spending more effectively, focusing more resources on supporting near-term growth targets and strengthening existing operations.”

In March 2022, VinFast announced it would invest $4 billion and create at least 7,500 jobs at an electric vehicle factory near the unincorporated community of Moncure. This promised to be the first major auto assembly plant in North Carolina history, and the state and county combined to offer VinFast an economic incentive package totaling around $1.25 billion.

Much of this money is tied to performance. VinFast will only benefit from North Carolina’s $316 million job development investment grant after it meets annual hiring and investment goals, with the first hiring deadline set for the end of 2024. The company also won’t receive any of the $400 million in grants Chatham County awarded until it begins hiring.

But the state’s incentive package to VinFast did include some upfront funding.

The North Carolina General Assembly appropriated $450 million in July 2022 to enhance the 1,765-acre site. The package featured $125 million to reimburse VinFast for site preparation costs, $250 million for the North Carolina Department of Transportation to upgrade public roads and address wetlands around the Moncure site, and $75 million to expand water and sewer infrastructure in Sanford to serve the VinFast campus, which is around 18 miles away.

North Carolina does have a clawback provision for the $125 million in site expense reimbursements should VinFast default on its grant: If the EV maker ultimately creates fewer than 3,875 jobs, the state can recoup 100% of its reimbursement.

In an email Tuesday to The News & Observer, North Carolina Department of Commerce spokesperson David Rhoades detailed how the General Assembly’s upfront pool has already been distributed.

• $51.7 million has been paid to help VinFast cover site preparation costs. “This money is paid as reimbursements for work completed or invoiced to the company,” Rhoades said, adding the company has until the end of 2026 to request additional reimbursements.
• The state has paid out $15.6 million to the city of Sanford to serve the VinFast site’s water and sewer needs.
• NCDOT has spent $28.4 million around the site, which is about 30 miles southwest of downtown Raleigh. “So far the $28.4 million has been used on the design, right-of-way, and preordering of materials for construction,” NCDOT spokesperson Jonathan Rand said in a separate email. One of the state’s main objectives has been to create direct access to the VinFast land from U.S. 1, a four-lane divided highway. The department has also repaved some local roads.
  
  

NCDOT has also negotiated with Moncure-area businesses and homeowners to buy properties that are in the “right-of-way” of its road construction plans. The state identified 12 houses, four businesses, and one church that had all or parts of their properties in the right-of-way path.

Of the 12 homes, four have been purchased and negotiations with the other residential owners is continuing, the state said, despite the latest VinFast delay.

North Carolina has acquired two businesses and Merry Oaks Baptist Church through eminent domain, meaning negotiations fell short and the state took over the land after paying the previous owners fair market values assessed by a state-approved appraiser. Negotiations with two more businesses are ongoing, the state said.

Some state leaders have previously noted the benefits of improving the Moncure megasite regardless of whether VinFast or other companies are the land’s long-term occupants.

What Stein and Robinson would do

In November 2022, the commerce department signed a purchase option agreement with VinFast, which gave North Carolina the right to buy all or parts of the company’s 1,765-acre site should the automaker miss concrete hiring and construction deadlines. One of those deadlines is for VinFast to commence operations by July 1, 2026.

The N&O asked Democratic Attorney General Josh Stein and Republican Lt. Gov. Mark Robinson, the two leading 2024 gubernatorial candidates, whether they would push for the state to buy back the site.

Neither candidate said what they would do. Robinson’s team responded with a statement highlighting VinFast’s financial struggles and critiquing business incentives more generally. Stein’s campaign did not send a statement, but linked to an article by Axios quoting Stein saying he supports incentives based on performance .

“While incentives for companies can be an effective tool when used properly, the foundations of keeping our economy strong — cutting taxes, reducing spending, and eliminating burdensome regulations — are more important,” Robinson spokesperson Michael Lonergan said in an email. “Because when incentives are used and things go bad, the taxpayers are left holding the bag. So while we should hold companies accountable who don’t meet their obligations, it’s better not to let that happen to begin with.”