Was the Rivian Automotive megasite in Georgia exempt from local county zoning ordinances because it was leased on land owned by the State?

Plain-English summary

Rivian Automotive, the electric vehicle manufacturer, agreed in late 2021 to build a $5 billion factory in Georgia that would create 7,500 jobs. The site, about 1,900 acres straddling Morgan and Walton Counties, was structured as follows: the Joint Development Authority of Jasper, Morgan, Newton, and Walton Counties (JDA) would assemble the parcels, transfer fee simple to the State of Georgia through the State Properties Commission (under the custody of the Department of Economic Development), and lease the property back to the JDA through an intergovernmental ground lease as an estate for years. The JDA would then sublease to Rivian as a usufruct.

The Commissioner of Economic Development asked AG Chris Carr whether this structure protected Rivian from local county zoning ordinances. Local opposition to the project had been significant, and the question of whether Morgan and Walton County zoning would apply to the site was central to project viability.

The AG answered yes, the structure achieved zoning exemption. The reasoning relied on the longstanding rule in Georgia that local governments cannot impose zoning ordinances on state-owned property without state consent. Three sources supported this:

1. Constitutional rule. O.C.G.A. § 1-3-8 says the state is not bound by a law unless named in it or unless the words are unmistakable. Local zoning ordinances enacted under counties' general home-rule power do not name the state or its agencies, so they do not apply to state property.

2. Case law. City of Atlanta v. State of Georgia (1935) held that a city cannot require a construction permit for a state project. City of Marietta v. CSX Transportation and the foundational Central Railroad & Banking Co. case (1874) reinforce this. Local governments exercising undelegated power against the state act ultra vires.

3. GDEcD-specific authority. O.C.G.A. § 50-7-16(b) gives GDEcD express authority to acquire real property and lease it for industrial development purposes, including leases to private parties. The statute's definition of "person" expressly includes private corporations.

The opinion was carefully scoped. It applied to the Rivian project as structured: state ownership, JDA intergovernmental lease, Rivian usufruct, with a purchase option held by Rivian conditioned on satisfaction of EDA commitments. Footnote 6 flagged that if Rivian later exercised the purchase option, "the zoning status after such a purchase would be unclear" and the project would have to either rezone or rely on the IGA Lease term continuing.

What this means for you

If you're an economic development official structuring a megaproject

The state-ownership-plus-lease structure is a powerful tool for projects that need to bypass local zoning resistance. Acquiring the property in the State's name, leasing through a JDA, and subleasing to the private developer through a usufruct (or estate for years) preserves zoning exemption for the entire project term. The AG's analysis treats the state-ownership requirement as substantive, not just nominal.

If you're a county planning commissioner facing a project structured this way

Your zoning ordinances do not apply. You can comment, but you cannot enforce. Your zoning power has been preempted by the state's ownership of the underlying property. Your input goes through the political and economic-development-agreement channels, not through zoning enforcement.

If you're a Rivian employee or future neighbor of the site

The project is exempt from county zoning during the IGA Lease term. Decisions about land use, building dimensions, signage, lighting, traffic flow, and similar zoning topics are between Rivian, the JDA, and the State, not the county. State and federal environmental and labor laws still apply.

If you're a real estate or development attorney

Note the distinction between the IGA Lease (estate for years) and the Rivian Rental Agreement (usufruct). Footnote 4 cites Camp v. Delta Air Lines for the presumption that a lease over five years is an estate for years. The opinion treats the State as retaining a vested interest in the property even after leasing to JDA, citing Oliver v. Irvin (105 Ga. App. 844). This continued state interest is the foundation for the zoning exemption.

Common questions

Q: Doesn't the state's exemption usually apply only to the state itself, not to private parties?
A: That's the general rule, but the AG read the Rivian structure as preserving state ownership throughout. Because Rivian's interest is a usufruct (a use right) and not a fee, the State remains the legal owner. The zoning exemption follows the legal title.

Q: What happens if Rivian exercises its purchase option?
A: Footnote 6 leaves this unclear. Either Rivian would have to seek rezoning to comply with local ordinances, or the General Assembly would have to clarify the zoning status by statute, or the IGA Lease could continue indefinitely with state ownership preserved.

Q: What's a usufruct vs. an estate for years?
A: A usufruct is a right to use property without ownership; the user does not have an estate in the land. An estate for years is a leasehold interest that's typically considered an estate (a property interest) under Georgia law. The Rivian Rental Agreement was structured as a usufruct deliberately, to preserve maximum state-interest framing.

Q: Can a county at least require building permits or inspections?
A: No, on the AG's reading. City of Atlanta v. State of Georgia held that a city cannot require a construction permit for a state project. By extension, county building permits and inspections similarly cannot apply to state-owned property.

Q: What about state environmental review and federal NEPA?
A: Those are separate from local zoning. State environmental laws (the Erosion and Sedimentation Act, Coastal Marshlands Protection Act, etc.) and federal laws (NEPA, Clean Water Act, Clean Air Act) can apply to state projects. The opinion only addresses local zoning ordinances.

Q: Does this apply only to manufacturing, or to other state-leased land?
A: The same general rule applies to other state-owned property, but the GDEcD-specific authority under § 50-7-16(b) is tailored to industrial development. Other state agencies leasing property to private parties would need to point to their own enabling statute for similar authority.

Background and statutory framework

Georgia, like most states, follows a general rule that the state is not subject to local regulation absent express legislative consent. The rule traces to constitutional supremacy of state government over its political subdivisions and is codified in O.C.G.A. § 1-3-8.

The Rivian project's structure was carefully engineered to preserve this state-ownership protection. The JDA assembled the property and conveyed fee simple to the State. The State Properties Commission then leased the property back to the JDA through an intergovernmental ground lease. The JDA subleased to Rivian as a usufruct. Each step preserved the State's underlying ownership while progressively moving operational control to Rivian.

The Department of Economic Development's enabling statute in O.C.G.A. § 50-7-16(b) authorizes GDEcD to acquire real property and to lease it to "any person" (a defined term that includes private corporations) for industrial development purposes. The 1998 AG opinion (1998 Op. Att'y Gen. 1998-10) had previously addressed similar economic-development structures.

The opinion's careful scope (acknowledging that a future Rivian purchase would change the analysis) preserves the legal protection for the project while flagging the legal question that would arise if Rivian exercised its option. That question would presumably be addressed when and if it ripened.

Citations and references

Statutes:
- Ga. Const. Art. IX, Section II, Para. I (county legislative power)
- O.C.G.A. § 1-3-8 (state not bound unless named)
- O.C.G.A. § 50-7-16 (Department of Economic Development real property authority)

Cases:
- City of Atlanta v. State of Georgia, 181 Ga. 346 (1935) (city cannot require construction permit for state project)
- Mayor & Council of Atlanta v. Central R.R. & Banking Co., 53 Ga. 120 (1874) (foundational state-immunity case)
- Macon Assoc. for Retarded Citizens v. Macon-Bibb County Planning and Zoning Commission, 252 Ga. 484 (1984) (state property not subject to local zoning)
- Camp v. Delta Air Lines, 232 Ga. 37 (1974) (lease over 5 years presumed estate for years)

Source

• Landing page: https://law.georgia.gov/opinions/2022-1

Original opinion text

This responds to your request for an official opinion as to whether real property owned by the State of Georgia is exempt from local zoning ordinances and related approval processes. More specifically, you have asked whether real property owned by the State of Georgia, but subleased to Rivian Automotive, LLC ("Rivian"), a private entity formed for private business purposes, is exempt from local zoning ordinances. The State of Georgia is in the process of finalizing an economic development agreement ("EDA") with Rivian and the Joint Development Authority of Jasper County, Morgan County, Newton County, and Walton County (the "JDA"). Under the EDA, Rivian will commit to constructing and establishing an automotive manufacturing facility thereby creating 7,500 jobs and making capital investment of $5 billion (the "Project"). As consideration for Rivian making these commitments, the State of Georgia and the JDA will provide certain statutory and discretionary economic development incentives, including providing Rivian with a rental agreement for an approximately 1,900 acre site to be owned by the State where Rivian will construct and operate the Project (the "Project Site"). [1] The Georgia Constitution grants each county the "…legislative power to adopt clearly reasonable ordinances, resolutions, or regulations relating to its property, affairs, and local government for which no provision has been made by general law and which is not inconsistent with this Constitution or any local law applicable thereto". Ga. Const. Art. IX, Section II, Para. I. As a result, the county has power to legislate or regulate over the private citizens and entities within its political boundaries and thus, establish zoning ordinances, subject to general law. However, this power to legislate does not include the power to legislate as to the state or its departments, agencies, and authorities. See O.C.G.A. § 1-3-8; 1958-59 Op. Att'y Gen. p. 5. Under the Georgia Constitution, local governments cannot impose local zoning ordinances or regulations upon the state without its consent. See 2009 Op. Att'y Gen. 2009-06. It is well-settled that local governments exercise only the powers delegated to them by the state and that an attempt by a local governing authority, county, or municipality to exercise an undelegated power against the state is ultra vires . See City of Atlanta v. State of Georgia , 181 Ga. 346 (1935) (finding that a city cannot require a construction permit for a state project); City of Marietta v. CSX Transp. , 272 Ga. 612, 613 (2000)(citing Mayor & Council of Atlanta v. Central R.R. & Banking Co. , 53 Ga. 120, 124 (1874)). In reaffirming the state's sovereignty amidst local action, the Georgia Supreme Court has held: "[i]n delegating the power and authority [to the city] to lay out streets, etc., for the benefit of the city, the State could not be presumed to have granted [to the city] the power and authority to do so against her own sovereign rights over her own property without first having obtained her consent." Central Railroad & Banking Co. , supra, p. 120. [2] Similarly, the same outcome is also achieved if the property is acquired by the Department of Economic Development ("GDEcD"), an agency of the State. O.C.G.A. § 50-7-1. Pursuant to O.C.G.A. § 50-7-16(b), GDEcD "is authorized to acquire real property and to construct, operate, and maintain such projects as are beneficial to the development of industry, trade, and tourism and to create economic and employment opportunities in the state." The statutory provision further provides that GDEcD may, with the approval of the State Properties Commission, enter into a lease of acquired real property with any person to accomplish its statutory goals of creating economic and employment opportunities in the State. [3] Id. GDEcD, as outlined in the EDA, seeks to accomplish its statutory goals through the Project and proposed lease with the JDA and its proposed rental agreement with Rivian. Therefore, as long as the Project Site is obtained by the State or one of its agencies, local governments have no inherent power to enforce zoning ordinances and such an action would be ultra vires . Based on the information you provided regarding the proposed transaction, it is our understanding that the JDA will acquire fee simple title to the Project Site by exercising individual options held by the JDA. Upon acquiring fee simple title to the Project Site, the JDA will transfer complete fee simple title to the State of Georgia through the State Properties Commission in the custody of the GDEcD. The State Properties Commission will subsequently lease the Project Site to JDA through an intergovernmental ground lease agreement with the JDA as an estate for years (the "IGA Lease"). [4] The JDA will then enter into a rental agreement with Rivian and structure Rivian's interest in the Project Site as a usufruct (the "Rivian Rental Agreement"). [5] The IGA Lease and the Rivian Rental Agreement will also include a purchase option enabling Rivian to purchase the Project Site at a future date. The purchase option and economic development incentives provided to Rivian are subject to Rivian fulfilling its commitments under the EDA. The question presented is whether the Project Site and Rivian's development and operation thereof is subject to the local governments' various zoning ordinances. As stated above, real property acquired by the State is not subject to zoning ordinances established by a county or municipality. See also Macon Assoc. for Retarded Citizens v. Macon-Bibb County Planning and Zoning Commission , 252 Ga. 484, 488 (1984). This principle is grounded in the constitutional provisions that govern supremacy of powers and the exercise of sovereignty. Moreover, a general power granted to a county or municipality does not apply to the State or its agencies in the absence of express language in the grant. See O.C.G.A. § 1-3-8; 1958 -59 Op. Att'y Gen. p. 5. Here, there is no express grant of legislative power given to counties or municipalities over the State. Based on the foregoing, it is my official opinion that, the State, as owner of the Project Site, and Rivian, as the developer and operator of the Project site owned by the State, would be exempt from local zoning ordinances. [6] [1] See 1998 Op. Att'y Gen. 1998-10. [2] The Georgia Supreme Court addressed the relationship between counties and the State expressing that "[c]ounties are subdivisions of the State government to which the State parcels its duty of governing the people. They are local, legal, political subdivisions of the State, created out of its territory, and are arms of the State, created, organized, and existing for civil and political purposes, particularly for the purpose of administering locally the general powers and policies of the State." Hines v. Etheridge , 173 Ga. 870, 875 (1931); See also 2004 Op. Att'y Gen. 2004-10. [3] "Person" is defined as "any individual; general or limited partnership; joint venture; firm; private , public, or public service corporation…". O.C.G.A. § 50-7-16(a)(3). (Emphasis added). [4] The State has the right to retain a portion of the Project Site for purposes of constructing and operating a training center and constructing certain road improvements including a new interchange at Interstate 20. [5] Generally, a lease greater than 5 years is presumed to create an estate for years between the parties. See Camp v. Delta Air Lines , 232 Ga. 37, 39 (1974). However, the underlying agreement, or lease, between the parties will ultimately determine the parties' intentions. Henderson v. Tax Assessors , 156 Ga. App. 590 (1980). Ultimately, after leasing the Project Site to JDA, the State will not be without an interest in the Project Site. The Project site will continue to be property of the State in that the State will have a vested interest in the property. See Oliver v. Irvin , 105 Ga. App. 844, 845 (1962). [6] If Rivian were to exercise its option in the future to purchase all or a portion of the Project Site, the zoning status after such a purchase would be unclear. To address this uncertainty, Rivian could seek to rezone the Project Site to satisfy local zoning ordinances or it could be clarified in general statutory language. Alternatively, the Project Site could continue to be exempt from local zoning ordinances through the term of the IGA Lease or any renewals, as long as, the State maintains ownership of the Project Site and there are no changes to current law. Prepared by: Alkesh B. Patel Senior Assistant Attorney General