Commerce secretary asks for $150M for Project Connect, says Scout Motors site delays drove large cost overruns

Secretary of Commerce Harry Lacey asked the Senate committee for $150 million in nonrecurring funds for "Project Connect," which Commerce said covers state costs incurred preparing a pad‑ready site for Scout Motors after permitting and mitigation issues delayed work.

Lacey told senators that Commerce began site work in April 2023 on upland areas but that the Department of Natural Resources (DNR) filed critical comments in July 2023. "The Army Corps of Engineers required us to stop work on the site until we got the wetlands permit," Lacey said; the wetland permit was not issued until January 2024. He said the stoppage left construction equipment idle on site for roughly five months and that additional mitigation procurement and the idle equipment together resulted in substantial cost overruns.

Commerce estimated the direct cost of idle equipment at "a little over $70 million" and said, when combined with additional mitigation costs, the overrun approaches roughly $100 million. Lacey characterized the Project Connect request as money to cover state obligations tied to delivering a pad‑ready site—not additional incentives to Scout Motors. "This is not additional money for Scout Motors," he said. "Scout Motors will receive none of these funds. They will receive none of these funds. Their incentive package remains unchanged."

Senators pressed Commerce on who authorized pre‑permit construction activity, the role of county contractors and engineers, and whether contractual contingencies existed. Commerce said some non‑wetlands work was begun to meet aggressive timelines, the county had contracts with engineering firms, and the state had to procure additional mitigation once DNR and others expressed concerns. Lacey said production at the Scout Motors facility is expected to ramp in 2026 into 2027 but that highway intersection work by DOT will not conclude until 2027.

Committee members asked for more detailed cost breakdowns and documentation; Commerce committed to providing additional information and to return for follow‑up testimony. The committee did not vote on funding at the hearing.

What happens next: Commerce will provide written clarifications and cost breakdowns; the committee said it will recall the secretary for follow‑up on Project Connect, mitigation procurement, and contractual obligations.