$1 billion data center plan hits roadblock in Howell Township

Gotion Operates By The Rules, Or Just With No Oversight From The State

Watchdog alleges CCP Gotion contract violations, demands lawmakers force default proceedings
Notes Chinese battery company’s reduced scope by more than 50%, a failure to create jobs, missing wetland data, ‘materially misrepresented’ community support

https://www.themidwesterner.news/2025/06/watchdog-alleges-ccp-gotion-contract-violations-demands-lawmakers-force-default-proceedings/

The grant is part of a broader economic development package secretly negotiated by Gov. Gretchen Whitmer’s administration and select lawmakers that includes $715 million in taxpayer-funded subsidies for Gotion to build a battery component plant in Mecosta County.

Gotion is a “wholly owned and controlled” subsidiary of Gotion High-Tech, a Chinese-based battery company whose by-laws require employees to “carry out Party activities in accordance with the Constitution of the [Chinese Communist Party].” A 2024 investigation by the House Select Committee on the CCP found the company is reliant on the CCP’s use of forced labor in its supply chain, while an amended Foreign Agents Registration Act filing admits the company is subsidized by the Chinese government.

Letter to Michigan Legislators From Economic Development Responsibility Alliance

https://edraofmi.org/blog/f/medc-responds-with-gotion-docs-which-confirm-contract-violation

Dear Michigan state legislators and Mecosta County Commissioners,

As we informed you, last month we sent a letter of demand to the Michigan Economic Development Corporation (MEDC) regarding the taxpayer-subsidized development of Gotion, Inc. near Big Rapids. On June 11th, the MEDC responded to some of these demands. We’ve compiled a summary of our findings here, for your review, consideration, and action.

In our May 21st letter of demand, we expressed concern that Gotion and The Right Place are in breach of contract with their state taxpayer-subsidized SOAR grants and Renaissance Zone, specifically due to:

• • missing compliance & due diligence documentation
  • material adverse effects
  • material misrepresentation, and perhaps most noticeably:
  • abandonment (due to inactivity for over 120 consecutive days)

The MEDC has responded to our letter by providing the following, according to the Freedom of Information Act (FOIA):

1. 1. Gotion’s 2024 Compliance Certificate
   2. Gotion’s Baseline Environmental Assessment 
   3. Documentation on Gotion’s Milestone 1 and 2, and
   4. Documentation showing $50M of taxpayer funding being disbursed to The Right Place for Gotion

This response was missing a great deal of information, but it did provide confirmation of many of the concerns we raised in our original letter of demand. Specifically: it confirmed that The Right Place and Gotion are in default of the terms of their SSRP grant, on a number of fronts.

Key highlights from FOIA documents

• • There are no Compliance Certificates for 2023. These are required by state law (MCL 125.2009). The Right Place and MEDC completed Progress Reporting for 2023 two and three months after its October 10th due date had passed.
  • In 2024, although Compliance Certificates were provided, the Right Place was over two weeks late in submitting one of its Annual Progress Reports to the MEDC.
  • Jobs have not been created; a total of three jobs are reported for 2023 and 2024 combined.
  • In his 2024 progress report on capital investments, the Right Place’s Ken Rizzio admits that “for the last 6 months of FY24, project planning and implementation activities have slowed due to the lawsuit filed by the company”. The terms of the SSRP grant define terms for abandonment as “infrastructure improvements for the Project have ceased for a period of 120 consecutive days”.
  • For Milestones 1 and 2, no proof of Certification is provided, and the fields for the date of certification and the name of the certifier are blank. 
  • The Baseline Environmental Assessment (BEA) is dated July 27th, 2023–yet the Right Place stated in their SSRP and CIP grant considerations which were approved by the MEDC’s MSF board on October 22nd, 2022, that “an environmental assessment of the site has been completed”. This is clear material misrepresentation by the Right Place to the MEDC, and subsequently to legislators.
  • Perhaps most concerningly of all: the Right Place appears to have received its second $25M disbursement two days BEFORE it submitted its required Milestone 2 report to the MEDC. This disbursement was supposed to be contingent upon meeting the requirements outlined in Milestone 2, yet the Right Place received its second sum of $25M on March 26th 2024, while Milestone 2 reporting was submitted to the MEDC on March 28th.

Feel free to review the documents for yourself here.

The lack of 2023 Compliance Certificates, and the admission of six months of inactivity are alone grounds for the initiation of default proceedings on Gotion’s SSRP grant.

But these are not the only grounds for default. Many of the concerns we raised in our letter of demand, which were not addressed in any way by the MEDC, remain. This includes:

• • change in project scope from the agreed 528 acres down to 270 acres
  • failure to create jobs, as is required in the terms of the Renaissance Zone contract
  • critical environmental data is missing from SSRP and CIP grant considerations–specifically that Gotion’s 270 acres contain 60+ acres of wetlands and  lie within a floodplain
  • local community support has been materially misrepresented 
  • Gotion’s lawsuit against Green Charter Township constitutes a material adverse effect on the project 

To the County Commission: we urge you to contact your legislators, and to ask them to enforce the terms of Gotion’s SOAR grant contracts by initiating default proceedings.

To legislators: it’s clear that these grants are not being executed in good faith. The Right Place and Gotion’s flagrant violation of the terms of their contract undermine the integrity of our state’s democracy. The MEDC works for Michigan taxpayers, and they answer to you. We ask that you insist the MEDC uphold the contract terms by initiating default proceedings.

Sincerely,

Marjorie Steele

Founder, EDRA of MI
Grant Township Resident