Panasonic agrees to build a plant in Oklahoma. But there's a catch

Panasonic has committed to building a factory in Oklahoma, but the company also wants state leaders to spend another $245 million on community and infrastructure upgrades, Gov. Kevin Stitt said Friday.

At a news conference, Stitt said Panasonic — code-named "Project Josie" — would be in line to receive nearly $700 million in capital investment rebates set aside in the Large-scale Economic Activity and Development Act (LEAD) passed by the Legislature last year.

On top of that, however, Panasonic wants more site preparation and road infrastructure at the Mid-America Industrial Park near Pryor before it begins work on a $5 billion, 5 million-square-foot structure.

"A few, maybe, daycare centers, more fire stations, there's some community investments that the Legislature would probably make to put that over the finish line," the governor said.

More: Panasonic said to be interested again in Oklahoma factory

But it's not certain whether the Legislature has the stomach to dig into their own pockets to meet Panasonic's demands.

Despite Stitt's optimism, House Speaker Charles McCall said Friday that the LEAD Act requires a binding contract "which is easily identifiable, and one in which a company promises to do something free of contingencies."

"The House reviewed the contract two days ago and notified the Department of Commerce, the governor and Project Josie to inform them that it does not meet the criteria and (to) give them an opportunity to correct it before the deadline," McCall told The Oklahoman.

McCall's thinking puts the future of the project in doubt and suggests that unless Panasonic drops its request for additional spending, the LEAD funds will no longer be available for the current deal after Saturday. Under the recently revised LEAD Act law, the Oklahoma Department of Commerce had to receive a binding commitment by April 15 or else the $698 million would be sent back to the General Revenue Fund, the catch-all pot of money used by lawmakers for discretionary appropriations.

The money was set aside last year as an incentive when the state was trying to convince Panasonic to build an electric vehicle battery manufacturing plant at the industrial park. Panasonic ultimately picked Kansas but told officials they might be interested in building a second factory in Oklahoma.

A Department of Commerce spokeswoman confirmed Friday that Panasonic has entered into an agreement with the state and that the department is continuing discussions with the company.

More: Panasonic to build battery factory in Kansas despite heavy recruitment by Oklahoma

What happens if the LEAD Act funds expire?

The expiration of the LEAD Act isn't necessarily a death knell for the project, but it essentially puts negotiations at or near square one. Lawmakers could theoretically return to session next week and appropriate the funds needed to secure Panasonic's commitment, but the House, Senate and governor have spent weeks verbally sparring over education funding and tax cuts.

Senate Pro Tem Greg Treat said Thursday the ongoing fight over school choice tax credits has "taken all the air out of the room on all other negotiations without a doubt."

Panasonic could also decide to build their factory in Oklahoma without the guarantee of taxpayer funded incentives.

House Democratic Leader Cyndi Munson railed at the notion of spending more money on luring Panasonic to Oklahoma, saying that long-term investments in Oklahoma's workforce start with providing a "first-class public education for every student and ensuring we have the best teachers in the country."

"Instead of prioritizing our public schools, Gov. Stitt continues to insist on huge giveaways to out-of-state corporations who consistently turn us down for other states and countries who invest in their people first," said Munson, D-Oklahoma City. "We have already set aside (more than) $600 million for the rumored Panasonic deal and now they are asking for another $250 million to move a plant here."

This article originally appeared on Oklahoman: Panasonic agrees to LEAD Act funds, but wants another $245 million